Local equities continue lackluster trade

Local equity benchmarks continued their lackluster trade in morning session, with losses of around one third a percent, by profit-booking by investors and selling in IT stocks. Sentiment on the street weakened as rating agency ICRA expects further deterioration in the growth of India's GDP to 4.7% in Q2 of FY20, due to weakening momentum in industry. ICRA also forecast the country's gross value added (GVA) at basic prices in year-on-year (YoY) basis to 4.5% in the quarter ending September of FY20. Some pessimism also spread among the investors with a report that the Centre delaying transfer of states’ share of GST collection that has been consistently falling this fiscal and poor non-tax mop-up, a majority of the states are going slow on their budgeted spending, which in the first half rose only 8.7%. Traders took note of government’s report that that public sector banks (PSBs) disbursed loans worth Rs 2.53 lakh crore in October, the month in which they carried out two phases of customer outreach programme under the government prodding in 374 districts of the country. About 60% of these were fresh loans.

On the global turf, Asian markets were trading mixed. Some sense of optimism returned to trading floors after a report said China’s point man on the US tariffs talks had offered to host a meeting to help push through their crucial mini pact. Back home, Former Reserve Bank of India (RBI) governor C Rangarajan stated that reaching the $5-trillion Gross Domestic Product (GDP) target by 2025 is simply out of question at the current growth rate.

The BSE Sensex is currently trading at 40461.71, down by 113.46 points or 0.28% after trading in a range of 40405.94 and 40653.17. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.29%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were Power up by 1.02%, Utilities up by 0.79%, Energy up by 0.73%, Metal up by 0.53% and PSU was up by 0.49%, while IT down by 2.23%, TECK down by 1.96%, Telecom down by 0.99%, Capital Goods down by 0.88% and Consumer Durables was down by 0.84% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.52%, NTPC up by 2.52%, Yes Bank up by 2.02%, Power Grid up by 1.92% and ONGC was up by 1.56%. On the flip side, Infosys down by 3.12%, Tech Mahindra down by 2.53%, HCL Tech down by 2.07%, TCS down by 1.71% and Bajaj Auto was down by 1.25% were the top losers.

Meanwhile, Former Reserve Bank of India (RBI) governor C Rangarajan has said reaching the $5-trillion Gross Domestic Product (GDP) target by 2025 is simply out of question at the current growth rate. He mentioned ‘today our economy is about $2.7 trillion and we are talking about doubling this over the next five years at $5 trillion. The required rate of growth to achieve that level is in excess of 9% per annum.’

He added ‘you have lost two years. This year it is going to be six percent growth and next year also it will be probably about seven percent. Thereafter the economy may pick up.’ The interesting thing is, even if you reach $5 trillion, the per capita income in India will grow from the current level of $1800 to $3600. Even then, India will be called low-middle income country.

The definition of a developed country is one whose per capita income is $12000. It will take 22 years for India to grow at 9 percent per annum to reach there. Besides, the economy has been on a steady decline, with growth rate slowing from 8.2% in FY16 to 6.8% in FY19. While the first quarter of current financial year growth slipped to a six-year low of 5%, the best forecast for the second quarter is 4.3%.

The CNX Nifty is currently trading at 11933.15, down by 35.25 points or 0.29% after trading in a range of 11916.30 and 11968.10. There were 22 stocks advancing against 27 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were ITC up by 2.54%, Zee Entertainment up by 2.51%, NTPC up by 2.39%, Yes Bank up by 2.10% and Power Grid was up by 1.66%. On the flip side, Bharti Infratel down by 4.30%, Infosys down by 3.08%, Tech Mahindra down by 2.62%, HCL Tech down by 2.05% and UPL was down by 1.79% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 106.72 points or 0.46% to 23,145.30, Hang Seng increased 49.29 points or 0.19% to 26,516.17, Straits Times advanced 16.50 points or 0.52% to 3,208.71 and KOSPI was up by 2.61 points or 0.12% to 2,099.21.

On the other side; Shanghai Composite declined 17.17 points or 0.59% to 2,886.47, Taiwan Weighted dropped 17.82 points or 0.15% to 11,540.45 and Jakarta Composite was down by 20.64 points or 0.34% to 6,096.72.