Local equities maintain positive momentum; Sensex surpasses 41K mark

Local equity benchmarks maintained their positive momentum in the morning session, following gains in Auto, Basic Materials and Metal stocks amid positive global sentiment. The BSE Sensex and broader Nifty eked out around half a percent gain after intense buying in the markets. Among heavy-weights Yes Bank, Mahindra & Mahindra and Tata Motors - DVR exhibited a smart performance. Sentiment on the street also improved on Union minister Piyush Goyal’s statement that India’s service sector can help achieve the Central government’s target of $5 trillion GDP. The service sector has the potential to be the largest job creators in the country and over the next five years it has the potential to contribute $3 trillion out of the $5 trillion GDP target set by the government. The traders overlooked India Ratings and Research’s report which showed that Indian economy may have slowed for the sixth consecutive quarter in July-September to 4.7%, as it lowered GDP growth forecast for current fiscal for the fourth time. Beside, a private report showed that Indian stocks are set to rise further over the coming year, but those gains will be limited as fiscal stimulus and easy monetary policy fail to reverse an economic slowdown.

On the global front, Asian markets were trading in green, on rising expectations that China and the United States will soon reach an interim trade deal, with Donald Trump saying the talks were ‘in the final throes’. Back home, internet industry body IAMAI and think-tank ICRIER has highlighted that a 10% growth in cross-border data flows measured in terms of global Internet bandwidth helps India clock a $6.971 billion rise in total volume of goods trade for India.

The BSE Sensex is currently trading at 41009.69, up by 188.39 points or 0.46% after trading in a range of 40924.49 and 41075.76. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.46%, while Small cap index was up by 0.30%.

The top gaining sectoral indices on the BSE were Auto up by 1.64%, Basic Materials up by 0.88%, Consumer Discretionary up by 0.74%, Metal up by 0.70% and IT was up by 0.62%, while Capital Goods down by 1.08%, Realty down by 0.72%, Telecom down by 0.43% and Industrials was down by 0.21% were the few losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 4.81%, Mahindra & Mahindra up by 2.72%, Tata Motors - DVR up by 2.64%, Tata Motors up by 2.53% and Maruti Suzuki was up by 2.04%. On the flip side, Larsen & Toubro down by 1.66%, ICICI Bank down by 1.02%, Bharti Airtel down by 0.47%, Tata Steel down by 0.15% and NTPC was down by 0.09% were the top losers.

Meanwhile, Fitch group firm India Ratings and Research (Ind-Ra) has said Indian economy may have slowed to 4.7% in second quarter of current financial year (Q2FY20). The 4.7% projection for the second quarter of the current fiscal would mark six consecutive quarters of slowing growth. The Indian economy expanded 5% in April-June, its slowest annual pace since 2013.

This comes despite a recent series of fiscal stimulus, including reduction in corporate tax rates. The measures were taken by the government to arrest the growth slowdown. In September, it announced a cut in the corporate tax rate to 22% from 30%. It also lowered the tax rate for new manufacturing companies to 15% to attract fresh foreign direct investments.

It has revised its GDP growth forecast for FY20 to 5.6%. This is the fourth revision and has come in after the agency had revised its FY20 GDP growth forecast only a month ago to 6.1%. The revision became inevitable as the high-frequency data now suggests that the agency's estimate of 2QFY20 GDP growth coming in a little higher than 5% is unlikely to hold.

The CNX Nifty is currently trading at 12093.65, up by 55.95 points or 0.46% after trading in a range of 12065.10 and 12108.50. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 5.23%, Tata Motors up by 2.78%, Mahindra & Mahindra up by 2.59%, Zee Entertainment up by 2.46% and Maruti Suzuki was up by 2.08%. On the flip side, Cipla down by 2.43%, Larsen & Toubro down by 1.78%, ICICI Bank down by 0.96%, Bharti Infratel down by 0.67% and Bharti Airtel was down by 0.57% were the top losers.

Asian markets were trading in green, Nikkei 225 surged 103.75 points or 0.44% to 23,477.07, Taiwan Weighted strengthened 44.73 points or 0.39% to 11,621.55, KOSPI rose 9.55 points or 0.45% to 2,130.90, Shanghai Composite gained 4.70 points or 0.16% to 2,911.76, Hang Seng increased 3.66 points or 0.01% to 26,917.58, Jakarta Composite soared 1.33 points or 0.02% to 6,027.52 and Straits Times advanced 0.09 points to 3,207.94.