Local equities pare some initial gains; Sensex holds 40,500 mark

Local equity benchmarks pared some of their initial gains in morning session but managed to remain in green territory. Among heavy-weights IndusInd Bank, ITC and HDFC exhibited a smart performance. Some optimism came after Cabinet cleared the structure of the proposed exclusive alternate investment fund (AIF) for the real estate sector with an initial corpus of Rs 25,000 crore, more inclusive terms and a commitment to continue to provide more budget funds, in addition to the initial Rs 10,000 crore, as and when demand arises. Some support also came with a report that Commerce and Industry Minister Piyush Goyal is likely to visit the US next week amid ongoing talks for a trade package between the two countries. The visit assumes significance as both the countries are negotiating a trade package to promote two-way commerce. Traders took note of International Monetary Fund’s report that India 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.

On the global front, Asian markets were trading mostly lower, as investors reined in earlier optimism of a pending trade deal between the US and China. Back home, rating agency CRISIL stated that revenue growth for highway developers in the engineering, procurement and construction (EPC) segment could get halved in both 2019-20 and 2020-21 fiscals to around 15% against 30% logged in FY19.

The BSE Sensex is currently trading at 40564.01, up by 94.23 points or 0.23% after trading in a range of 40476.12 and 40676.44. 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 0.38%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.79%, Telecom up by 0.64%, Realty up by 0.58%, Energy up by 0.48% and FMCG was up by 0.32%, while Metal down by 1.29%, Auto down by 0.70%, Utilities down by 0.36%, Oil & Gas down by 0.34% and PSU was down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were IndusInd Bank up by 2.58%, ITC up by 1.40%, HDFC up by 1.33%, Reliance Industries up by 0.83% and SBI was up by 0.69%. On the flip side, Tata Steel down by 3.50%, Tata Motors - DVR down by 2.24%, Tata Motors down by 2.15%, Yes Bank down by 1.67% and ONGC was down by 1.42% were the top losers.

Meanwhile, with an aim to complete stalled housing projects in the country, the government has approved forming a special window which is to be structured as an alternative investment fund (AIF). Union Finance Minister Nirmala Sitharaman said the government has approved setting up of a 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.

Sitharaman said the government will establish a special window to provide priority debt financing for completion of stalled housing projects in the affordable and middle-income housing sector. She mentioned 1,600 stalled housing projects with 4.58 lakh homes will benefit from the alternate funding mechanism. This investment will be used to complete housing units worth less than Rs 2 crore in Mumbai, Rs 1.5 crore in Delhi-NCR, Chennai, other metros, and Rs 1 crore in other cities.

The move is aimed at generating employment as well as reviving demand of cement, iron and steel industries. It is also aimed at relieving stress in the major sectors of the economy. Besides, she mentioned the fund size will increase as sovereign and pension fund are expected to participate in this AIF. The AIF can be utilised even by the projects which have been declared non-performing assets or are facing insolvency proceedings.

The CNX Nifty is currently trading at 11,984.60, up by 18.55 points or 0.16% after trading in a range of 11960.75 and 12021.40. There were 21 stocks advancing against 28 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were IndusInd Bank up by 2.59%, Bharti Infratel up by 2.10%, Ultratech Cement up by 1.56%, Titan Company up by 1.45% and HDFC was up by 1.32%. On the flip side, Tata Steel down by 3.36%, Tata Motors down by 2.03%, GAIL India down by 1.76%, JSW Steel down by 1.53% and ONGC was down by 1.24% were the top losers.

Asian markets were trading mostly lower, Hang Seng decreased 82.92 points or 0.3% to 27,605.72, Taiwan Weighted dropped 82.47 points or 0.71% to 11,570.60, Jakarta Composite lost 82.23 points or 1.32% to 6,135.32, Nikkei 225 slipped 15.31 points or 0.07% to 23,288.51, Shanghai Composite declined 8.79 points or 0.3% to 2,969.81 and KOSPI fell 3.86 points or 0.18% to 2,140.29. On the global front, Straits Times was up by 0.90 points or 0.03% to 3,263.59.