Benchmarks trade in red in early deals

Indian equity benchmarks made slightly negative start and were trading in red in early deals on Wednesday. Sensex and Nifty lose over 0.25% and 0.40%, respectively, led by losses in Bharti Airtel, ITC and TCS amid tepid global cues. There was some cautiousness with a private report that the government may discontinue spending on 200-odd schemes in order to stick to its fiscal deficit target of 3.3 percent. However, the downside remained limited after Finance Minister Nirmala Sitharaman said that the government is eager to modify rules and boost investment in the infrastructure space. She also said the government is focusing on real estate as part of a broader plan to kick-start economic growth. On the sectoral front, sugar stocks were in focus as the government announced that a environmental clearance would not be required to produce additional ethanol from sugarcane juice as it does not cause pollution, a move that may benefit farmers and the cash-strapped sugar mills.

Global cues also remained lackluster with Asian markets were trading mixed as investors awaited new developments on the US-China trade front. A report said that China is continuing to press the US to remove tariffs on about $125 billion worth of Chinese goods imposed in September. Meanwhile, concerns about the outlook for interest rates also weighed on investor sentiment following the release of upbeat US economic data. The Bank of Japan will release the minutes from its September 19 monetary policy meeting later in the day.

Back home, Commerce and Industry Minister Piyush Goyal indicated that India is open for negotiations if the member countries of RCEP would come up with a better offer which can address concerns and provide greater market access for the domestic industries. In scrip specific development, Titan Company came under pressure after reporting lower than expected numbers for Q2FY20. The company reported a 1.83 per cent year-on-year rise in standalone profit at Rs 320.16 crore for the September quarter. The company had posted Rs 314.38 crore profit in the year-ago period.

The BSE Sensex is currently trading at 40145.58, down by 102.65 points or 0.26% after trading in a range of 40113.89 and 40311.85. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.09%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Realty up by 2.89%, Healthcare up by 1.46%, Metal up by 0.70%, Basic Materials up by 0.42% and Oil & Gas was up by 0.22%, while Consumer Durables down by 4.02%, Telecom down by 1.70%, FMCG down by 0.32%, Consumer Discretionary down by 0.31% and Bankex was down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.65%, Yes Bank up by 1.54%, Vedanta up by 1.02%, Tech Mahindra up by 0.98% and Mahindra & Mahindra up by 0.63%. On the flip side, Bharti Airtel down by 1.65%, HCL Technologies down by 1.01%, ITC down by 0.99%, Axis Bank down by 0.76% and Bajaj Auto down by 0.69% were the top losers.

Meanwhile, expressing optimism over more reforms for India’s growth, Finance minister Nirmala Sitharaman has said the government will soon use its strong electoral mandate to usher in the next wave of reforms, and not to miss the bus this time. Without naming the reform measures unsuccessfully attempted by the Modi government in its first term, and in an apparent hint at land acquisition reform attempts by NDA1, she said government's efforts last time were thwarted by the poor numbers in the Upper House.

She said ‘i am sure we will now show the commitment for reforms happens fast. That is where the mandate given to Modi 2.0 will help’. She emphasized that ‘we will push forward with those reforms which have missed the bus last time, but won't miss the bus now.’ On whether economics has trumped politics in the recent elections, she it is not possible for any political party, particularly those in power, to delink any subject.

Finance minister said ‘It is not possible for any government, be it at the Centre or in the states, to say give me your vote on nationalism and I do not want to talk about economic issues. Is the voter going to be indulgent enough to say ‘alright, the prime minister doesn't want to talk about economy so we won't talk about the economy’. Hitting out at those who blocked government from carrying out reforms in its first term, she admitted that the numbers were limited (in the Upper House) and the country paid the price for that.

She said the manufacturing sector competitiveness is still pulled down by ‘extraneous’ factors such as high cost for land, electricity and also changes in land use, which are beyond the ambit of individual companies, but which the government now wants to ease them all. She added that everything has a long way to go in terms of becoming actually easy to do business. About companies to committing new investments and using the space created by the corporate tax cut for deleveraging, she said it is fine for a corporate to use the space for the purposes it wishes and exuded confidence that over the long-term, they will invest.

The CNX Nifty is currently trading at 11868.95, down by 48.25 points or 0.40% after trading in a range of 11868.00 and 11912.20. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 4.84%, Sun Pharma up by 4.69%, Cipla up by 2.87%, Dr. Reddy’s Lab up by 1.98% and Tech Mahindra up by 1.11%. On the flip side, Titan Company down by 8.00%, Bharti Infratel down by 1.69%, Bharti Airtel down by 1.55%, HCL Technologies down by 1.17% and Axis Bank down by 1.13% were the top losers.

Asian markets were trading mixed; Jakarta Composite lost 27.68 points or 0.44% to 6,236.47, Hang Seng decreased 22.38 points or 0.08% to 27,661.02, Taiwan Weighted dropped 14.91 points or 0.13% to 11,629.12 and Shanghai Composite declined 5.65 points or 0.19% to 2,985.91. On the flip side, KOSPI rose 0.67 points or 0.03% to 2,143.31, Straits Times advanced 11.37 points or 0.35% to 3,260.00 and Nikkei 225 was up by 22.21 points or 0.1% to 23,274.20.