Benchmarks trade in fine-fettle; Sensex hits fresh all-time high

Indian equity benchmarks made optimistic start and trading in fine-fettle on Thursday. Sensex rallied to fresh all-time high of 40,676 in early deals, while Nifty gained around half a percent after the Narendra Modi-led government announced a major reform to bolster the stressed real-estate sector. Except Metal and Auto, all the sectoral indices on BSE were trading in green. Finance Minister Nirmala Sitharaman has approved the establishment of a ‘Special Window’ to provide priority debt financing for completion of stalled housing projects in the Affordable and Middle-Income Housing sector. The government has approved setting up of an Rs 25,000 crore bailout fund to finance 1,600 stalled housing projects as it looks to boost the economy by kick starting incomplete projects. The minister said the government will put in Rs 10,000 crore in this AIF, while SBI and LIC would provide Rs 15,000 crore, taking the total size to Rs 25,000 crore. Some support also came with Petroleum Minister Dharmendra Pradhan’s statement that the government is on track to meet the target of cutting India's oil import dependence by 10 percent by 2020.

On the global front, most of the Asian markets were trading in red following the lackluster cues overnight from Wall Street amid report that the signing of an interim trade deal between the US and China could be delayed until December. As per a report, China's latest push for more tariff rollbacks was not expected to derail progress toward an interim deal. Back home, NITI Aayog Vice-Chairman Rajiv Kumar called for a review of regulations under the Essential Commodities Act to protect the interests of farmers and boost agriculture exports. In scrip specific development, Yes Bank came under pressure after Moody's Investors Service placed its foreign currency issuer rating under review for downgrade.

The BSE Sensex is currently trading at 40658.01, up by 188.23 points or 0.47% after trading in a range of 40580.29 and 40676.44. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.76%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Realty up by 1.76%, Telecom up by 0.85%, Bankex up by 0.67%, Energy up by 0.62% and FMCG was up by 0.55%, while Metal down by 0.68% and Auto was down by 0.35% were the only losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.00%, SBI up by 1.57%, ITC up by 1.44%, HDFC up by 1.39% and Axis Bank up by 0.98%. On the flip side, Tata Steel down by 1.79%, Vedanta down by 1.23%, Yes Bank down by 1.09%, Tata Motors - DVR down by 1.06% and Tata Motors down by 0.98% were the top losers.

Meanwhile, amid concerns over fiscal deficit slippages, the International Monetary Fund (IMF) has said that the Indian government needs to become more ‘transparent’ on the fiscal numbers as it is a ‘laggard’ among the G20 peers on this front. The government has been missing its budgeted fiscal targets for the past few years and there is a need for a ‘credible fiscal consolidation’ which is more ambitious as well, and added that this is more so as government has not addressed how it will make up for the massive Rs 1.45 trillion tax giveaways in the form of corporate tax cuts.

IMF’s deputy director Anne-Mary Gulde said fiscal transparency should be increased. It is fairly difficult for the private sector to get the full picture on fiscal standing. She also said India is somewhat lacking in a programme on G20 data initiative on fiscal transparency where comparative countries have all made greater progress. She said there is also a need for more credible fiscal consolidation as such a move will help reduce the relatively high level of debt and free up financial resources for the private sector. She highlighted that fiscal stimulus is not possible to revive the sagging growth due to the relatively high level of public debt compared to the emerging economy peers.

Welcoming the steep corporate tax cuts to get the levies at par with competition, she rued that so far little has been done to offset the revenue impact of the same. She said ‘we feel that the revenue impact needs to be considered going forward and compensated for...we would urge that fiscal policy be formulated against more realistic background to give a more clear direction to private sector expectations’. She said ‘we see structural challenges and a weak cyclical position; we need to look at policies that address the cyclical weakness which will also address the structural challenges going forward’ and called for urgent reform measures in the labour, land and factor markets to revive and sustain growth.

The CNX Nifty is currently trading at 12015.30, up by 49.25 points or 0.41% after trading in a range of 11994.25 and 12021.40. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 2.98%, Bharti Infratel up by 2.55%, Ultratech Cement up by 2.22%, SBI up by 1.57% and ITC up by 1.45%. On the flip side, Tata Steel down by 2.02%, Vedanta down by 1.23%, Dr. Reddy’s Lab down by 1.09%, Hindalco down by 0.99% and Tata Motors down by 0.97% were the top losers.

Asian markets were mostly trading in red; Hang Seng decreased 92.95 points or 0.34% to 27,595.69, Taiwan Weighted dropped 89.58 points or 0.77% to 11,563.49, Jakarta Composite lost 82.15 points or 1.32% to 6,135.40, Nikkei 225 slipped 14.59 points or 0.06% to 23,289.23, Shanghai Composite declined 8.79 points or 0.3% to 2,969.81 and KOSPI fell 4.71 points or 0.22% to 2,139.44. On the flip side, Straits Times was up by 0.26 points or 0.01% to 3,262.95.