Local equities maintain upward momentum; Sensex touches 40,500 mark

Local equity markets maintained their upward momentum in the morning session, following gains in Telecom, BANKEX and Energy stocks amid positive global sentiment. Among heavy-weights Bharti Airtel, SBI and Tata Motors - DVR exhibited a smart performance. Sentiment got boost with a report that even after the flurry of sops given to various industries after the budget, Union MSME Minister Nitin Gadkari has said the government will create a special financial scheme for 10 industry segments which are import-driven. He said the government has created a scheme to support industries where imports are high by providing special financial assistance. Traders took note of Central Board of Direct Taxes Chairman PC Mody’s statement that the government has so far mopped up Rs 6 lakh crore or less than 50% of the total tax collection target of Rs 13.35 lakh crore for the current fiscal. Efforts are being made to achieve the target set in the Budget. However, traders ignored Moody’s Investors Service’s report as it has cut its forecast for India’s 2019 (calendar) GDP growth by 60 bps to 5.6%, in what reflected a continuing trend of such downward revisions by prominent domestic and foreign agencies. Meanwhile, a report stated that headline inflation is bound to rise further to 5% for November, but despite the pinch in price rise, the Reserve Bank will go for two consecutive rate cuts on growth concerns.

On the global front, Asian markets were trading higher, after White House economic adviser Larry Kudlow teased markets saying that the US and China are ‘getting close’ to a trade deal and that it’s ‘coming down to the short strokes’. Back home, SBI research report’s showed that surplus rainfall in August and September is likely to keep food and vegetable prices elevated going forward, and retail inflation may average at around 4% in FY20.

The BSE Sensex is currently trading at 40594.62, up by 308.14 points or 0.76% after trading in a range of 40396.91 and 40650.06. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 48%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Telecom up by 6.44%, BANKEX up by 1.14%, Energy up by 0.94%, Auto up by 0.92% and PSU was up by 0.90%, while Power down by 0.22%, Consumer Durables down by 0.19% and Capital Goods was down by 0.18% were the few losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 6.91%, SBI up by 3.56%, Tata Motors - DVR up by 3.00%, Tata Motors up by 2.37% and ICICI Bank was up by 1.92%. On the flip side, Power Grid down by 0.43%, Tech Mahindra down by 0.40%, HDFC down by 0.29%, NTPC down by 0.21% and Bajaj Auto was down by 0.20% were the top losers.

Meanwhile, amid ongoing US-China trade war, Council for Leather Exports (CLE) Chairman -- P R Aqeel Ahmed has said that the trade war provides huge opportunities to leather exporters to increase their shipments to America. The sector's exports grew about seven per cent to the US in the past four months. He noted that the commerce minister has already announced a Rs 2,600-crore package for the leather sector to boost exports.

He further said leather exports have recorded dip in growth in value terms but in volume terms, it is increasing. He said ‘this is the sector which provides the highest employment to women and we are taking several steps to promote exports.’ This labour-intensive sector has huge potential to earn foreign exchange for the country and create jobs for the youth.

He mentioned that despite the global economic slowdown, production and employment in the leather sector have increased. Also, this is the only industry where in the exports of value-added products ($5.69 billion) are almost five times more than the import of inputs/components/accessories and capital goods which is to the tune of $1 billion. He added that the industry is undertaking a multi-pronged approach including product and market diversification, attracting investments, increasing capacities and also developing skills of workers so as to increase its global market share in the coming years.

The CNX Nifty is currently trading at 11930.75, up by 58.65 points or 0.49% after trading in a range of 11899.15 and 11973.65. There were 32 stocks advancing against 17 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Bharti Airtel up by 6.84%, Bharti Infratel up by 5.49%, Grasim Industries up by 3.07%, SBI up by 2.94% and Tata Motors was up by 2.24%. On the flip side, Indian Oil Corp. down by 2.74%, Cipla down by 2.36%, BPCL down by 1.28%, HDFC down by 0.60% and Titan Company was down by 0.56% were the top losers.

Asian markets were trading higher; Shanghai Composite gained 0.29 points or 0.01% to 2,910.16, Straits Times advanced 4.36 points or 0.13% to 3,236.21, KOSPI rose 20.99 points or 0.98% to 2,160.22, Jakarta Composite soared 31.51 points or 0.52% to 6,130.46, Taiwan Weighted strengthened 78.19 points or 0.68% to 11,528.61, Hang Seng increased 83.63 points or 0.32% to 26,407.32 and Nikkei 225 was up by 176.30 points or 0.76% to 23,317.85.