Volatility keeps Indian markets flat on Monday

Indian equity benchmarks ended the volatile day with marginal gains on Monday. After a cautious start, key indices traded volatile, as IHS Markit in its latest report stated that India's real GDP growth in 2019-20 fiscal is expected to be slightly below 5% as the impact of stimulus measures will take time to filter through to the economy. Adding more worries among market participants, Former Reserve Bank of India’s (RBI)  governor Raghuram Rajan said that India is in the midst of a ‘growth recession’ with signs of deep malaise in the Indian economy that is being run through extreme centralisation of power in Prime Minister’s Office and powerless ministers.

Despite volatility, markets managed to keep their heads above their neutral lines for the most part of the session, aided by Finance Minister Nirmala Sitharaman’s statement that the government is working on more measures to revive the sagging economy. Traders got some relief, after Chief Economic Adviser KV Subramanian said that private investment is key to economic growth and the recent cut in corporate tax rate was done to boost investments. Further, the street took a note of the RBI’s data report stating that India Inc's foreign borrowings grew over two-fold to $3.41 billion in October over the corresponding month a year ago.

On the global front, European markets were trading in red, as France's economic growth is expected to slow slightly in the fourth quarter. The Bank of France retained its GDP growth estimate for the final three months of 2019 at 0.2 percent, which is slower than the 0.3 percent expansion in the third quarter. Asian markets ended mostly higher, after Japan had a current account surplus of 1,816.8 billion yen in October, exceeding expectations for 1,806.8 billion yen and up from 1,612.9 billion in September. The trade balance reflected a surplus of 254.0 billion yen - also beating forecasts for 138.8 billion yen following the 1.1 billion yen surplus in the previous month.

Back home, the infrastructure sector stocks remained in watch, amid reports that as many as 373 infrastructure projects, each worth Rs 150 crore or more, are hit by cost overruns of more than Rs 3.89 lakh crore owing to delays and other reasons. Further, the logistic industry stocks also remained in focus, after the Indian Ports Association (IPA) showed that cargo volume handled by the country's top 12 ports was marginally up by 0.34 percent at 463.07 million tonnes during the April-November period this year. The ports had handled 461.48 MT of cargo during the corresponding period of the last fiscal.

Finally, the BSE Sensex gained 42.28 points or 0.10% to 40,487.43, while the CNX Nifty was up by 16 points or 0.13% to 11,937.50.

The BSE Sensex touched high and low of 40,645.63 and 40,336.56, respectively and there were 16 stocks advancing against 15 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index rose 0.11%, while Small cap index was down by 0.44%.

The top gaining sectoral indices on the BSE were Energy up by 1.06%, Oil & Gas up by 1.01%, Auto up by 0.75%, Metal up by 0.65% and Utilities up by 0.50%, while IT down by 1.02%, Realty down by 1.02%, TECK down by 0.92%, Capital Goods down by 0.78% and FMCG down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.06%, Axis Bank up by 2.01%, Maruti Suzuki up by 1.68%, Reliance Industries up by 1.13% and Power Grid up by 0.94%. On the flip side, TCS down by 2.93%, Tata Motors - DVR down by 2.06%, HCL Tech. down by 1.54%, Larsen & Toubro down by 1.04% and Indusind Bank down by 1.01% were the top losers.

Meanwhile, former Union minister Suresh Prabhu has said that startups are going to play a vital role in making India a $5 trillion economy. He also said ‘so, when we talk about $5 trillion economy, it will be largely from the startups. It is inevitably bound to happen all over the world, thankfully our prime minister realised it and had that vision to understand the changing economic scenario of the Indian economy.’

Prabhu has stated that the economic growth will come from both the existing industries as well as from those companies that are going to come up in the future. He noted that India has become a $2.7 trillion economy in 2019, having added 1 trillion US dollars in the last five years.

Former Union minister further said that there has been a global economic slowdown, which has also impacted the country's growth. The global economy is slowing down at the same time India's economy has slowed down. He pointed out that the country needs to have three components - industries, services and agriculture to achieve an ambitious GDP goal of $5 trillion. 

The CNX Nifty traded in a range of 11,981.95 and 11,888.05. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.20%, Axis Bank up by 2.06%, Adani Ports up by 1.98%, HDFC up by 1.91% and Maruti Suzuki up by 1.82%. On the flip side, TCS down by 2.99%, HCL Tech down by 1.62%, Cipla down by 1.31%, LT down by 1.30% and ZEEL down by 1.22% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 13.13 points or 0.18% to 7,226.53, France’s CAC fell 19.00 points or 0.32% to 5,852.91 and Germany’s DAX was down by 17.03 points or 0.13% to 13,149.55.

Asian markets ended mostly higher on Monday on the strong US jobs data announced last week. Non-farm payroll employment surged up by 266,000 jobs in November after climbing by an upwardly revised 156,000 jobs in October. The jobless rate edged down to 3.5 percent from 3.6 percent in October. Japanese shares ended up as investors awaited key central bank meetings and the UK election. Further, Seoul stocks closed higher, despite North Korea conducting a ‘very important test’ at a long-range missile launch site. US President Donald Trump warned Sunday that North Korean leader Kim Jong Un risks losing ‘everything’ if he acts in a hostile way. Moreover, Chinese shares ended little changed with a positive bias after the release of November trade data. Though, the upside remained limited on concerns about an escalation in the Sino-US trade war after top White House economic adviser Larry Kudlow said that December 15 deadline is still in place to impose a new round of US tariffs on Chinese consumer goods.