Markets continue to trade firm in early noon deals

Indian markets continued their firm trade in early noon deals, as investors opted to buy beaten down but fundamentally strong stocks owing to strong global cues. Benchmarks after making positive start were strengthening gradually with no sign of any profit taking till yet. Nifty and Sensex recaptured their crucial 11,900 and 40,450 levels respectively. Sentiments remained up-beat with 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. Market participants paid no heed, to 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, the United States has initiated new anti-dumping duty and countervailing duty investigations to determine whether forged steel fittings from India and Korea are being dumped there and to find out whether producers in India are receiving unfair subsidies.

On the global front, Asian markets were trading higher, on restoring trade deal optimism after the report that the US is getting close to a trade agreement with China. Back on street, shares of public sector banks (PSBs) were in lime light after the Supreme Court states the NCLAT cannot interfere with the commercial decisions taken by banks in Essar Steel case. Besides, Grasim Industries gained on turning black in Q2.

The BSE Sensex is currently trading at 40491.89, up by 205.41 points or 0.51% after trading in a range of 40396.91 and 40650.06. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index rose 0.27%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were Telecom up by 5.86%, Bankex up by 0.97%, TECK up by 0.71%, PSU up by 0.65% and Auto was up by 0.57%, while Power down by 0.52%, Metal down by 0.31%, Consumer Durables down by 0.28%, Oil & Gas down by 0.23% and FMCG was down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 6.38%, SBI up by 4.38%, Tata Motors - DVR up by 1.96%, Tata Motors up by 1.74% and Sun Pharma was up by 1.38%. On the flip side, Tech Mahindra down by 0.93%, NTPC down by 0.84%, Vedanta down by 0.59%, Axis Bank down by 0.54% and ITC was down by 0.53% were the top losers.

Meanwhile, Moody's Investors Service in its latest report has slashed India’s gross domestic product (GDP) growth forecast to 5.6 percent for the year 2019 from 5.8 percent projected earlier, pointing out that the measures taken by the government do not address the widespread weakness in consumption demand. It also expects that economic activity will pick up in 2020 and 2021 to 6.6 percent and 6.7 percent, respectively, but the pace to remain lower than in the recent past.

According to the report, the country’s economic growth has decelerated since mid-2018, with real GDP growth falling from nearly 8 percent to 5 percent in the second quarter of 2019 and joblessness rising. It also said investment activity was muted well before that, but the economy was buoyed by strong consumption demand. It added that what is troubling about the current slowdown is that consumption demand has cooled notably.

The report further stated that the government has undertaken a number of measures to arrest the growth slowdown. In September, the government announced a cut in the corporate tax rate to 22 per cent from 30 per cent. The government also lowered the tax rate for new manufacturing companies to 15 per cent to attract new foreign direct investments. Besides, it noted that the government's other initiatives include bank recapitalization, the mergers of 10 public sector banks into four, support for the auto sector, plans for infrastructure spending, as well as tax benefits for startups. However, it said that none of these measures directly address the widespread weakness in consumption demand, which has been the chief driver of the economy.

The CNX Nifty is currently trading at 11930.60, up by 58.50 points or 0.49% after trading in a range of 11899.15 and 11973.65. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 6.61%, Bharti Infratel up by 6.01%, SBI up by 4.31%, Grasim Industries up by 1.81% and Tata Motors was up by 1.80%. On the flip side, Indian Oil Corporation  down by 2.85%, Cipla down by 1.26%, BPCL down by 1.15%, JSW Steel down by 0.98% and Tech Mahindra was down by 0.82% were the top losers.

Asian markets were trading mostly  higher; Hang Seng increased 46.47 points or 0.18% to 26,370.16, Taiwan Weighted strengthened 71.52 points or 0.62% to 11,521.94, Jakarta Composite soared 31.51 points or 0.52% to 6,130.46, Straits Times advanced 3.96 points or 0.12% to 3,235.81, Nikkei 225 surged 178.16 points or 0.77% to 23,319.71 and KOSPI was up by 19.25 points or 0.9% to 2,158.48.

On the flip side, Shanghai Composite was down by 1.07 points or 0.04% to 2,908.80.