Markets trade higher in early deals

Indian equity benchmarks made optimistic start and are trading higher in early deals on Wednesday, supported by buying in TECK, IT and Telecom stocks. Some support came in with Union Surface Transport Minister Nitin Gadkari’s statement that the government would spend a whopping Rs 5 trillion over the next two years in infrastructure projects to spur the economy and create thousands of jobs. Traders took note of report that the Federal Reserve is expected to conclude its December meeting on Wednesday afternoon by signaling it’s in no hurry to do anything to change its neutral stand on interest rates. Though, gains remained capped as some cautiousness crept in as the Asian Development Bank (ADB) lowered its forecast for India to 5.1% for 2019 from its September estimates of 6.5% as the foundering of a major nonbanking financial company in 2018 led to a rise in risk aversion in the financial sector and a credit crunch. Adding some more pessimism, former chief statistician of India, Pronab Sen said that India's GDP growth is likely to hit a decade low of 4.5% in the current financial year ending March, and the government should stick to its Budgeted expenditure plan even if it means fiscal slippage.

Global cues also remained supportive with most of the Asian markets were trading in green with modest gains amid uncertainty about a US-China trade deal before additional American tariffs on Chinese goods are set to kick in on December 15. Investors are also looking ahead to the U.S. Federal Reserve's monetary policy decision due later in the day. The Fed is widely expected to leave interest rates unchanged, although investors will pay close attention to the accompanying statement for clues about the outlook for rates.

Back home, metal stocks were in focus with ICRA's report that growth in domestic steel demand slipped into negative territory in the first two months of the third quarter of FY20 (October and November), recording a marginal de-growth of 1.8 per cent year on year (Y-o-Y). In scrip specific development, Tata Motors rose despite reporting a 15% decline in group's global wholesales in November. Yes Bank fell even as its board is favourably considering Citax Holdings and Citax Investment Group's $500 million offer. The bank added that $1.2 billion binding offer of Erwin Singh Braich/SPGP Holdings continues to be under the board's consideration.

The BSE Sensex is currently trading at 40310.78, up by 70.90 points or 0.18% after trading in a range of 40135.37 and 40347.34. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.13%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were TECK up by 0.76%, IT up by 0.74%, Telecom up by 0.66%, Utilities up by 0.60% and Metal was up by 0.51%, while Capital Goods down by 0.29%, Energy down by 0.23%, Auto down by 0.15%, Industrials down by 0.03% and Consumer Discretionary was down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.30%, Tech Mahindra up by 1.04%, ITC up by 1.02%, Tata Steel up by 0.78% and NTPC up by 0.73%. On the flip side, Yes Bank down by 7.22%, Hero MotoCorp down by 1.01%, Hindustan Unilever down by 0.73%, SBI down by 0.61% and Power Grid Corporation down by 0.47% were the top losers.

Meanwhile, the Asian Development Bank (ADB), in its latest Asian Development Outlook Supplement report has lowered its forecast for India to 5.1% for fiscal year 2019-20 (FY20) from its September estimates of 6.5% as the foundering of a major nonbanking financial company in 2018 led to a rise in risk aversion in the financial sector and a credit crunch. Also, consumption was affected by slow job growth and rural distress aggravated by a poor harvest. It added that growth should pick up to 6.5% in next fiscal year with supportive policies. In September, it had forecast India’s GDP to grow 7.2% in next fiscal year.

As per the report, it has lowered its growth forecasts for developing Asia this year and the next, as a weaker outlook for China and India indicated softer economic activity elsewhere in the region. The bank trimmed its growth forecast for developing Asia to 5.2% in 2019 and 2020, it said in an updated annual outlook report, from 5.4% and 5.5% previously. It cut its growth estimates for China for this year and the next to 6.1% and 5.8%, respectively, from the 6.2% and 6.0% forecasts announced in September, on the US-Sino trade tensions and as higher prices of pork cut into consumer spending.

It said while growth rates are still solid in developing Asia, persistent trade tensions have taken a toll on the region and are still the biggest risk to the longer-term economic outlook. It also said inflation, on the other hand, is ticking up on the back of higher food prices, as African swine fever has raised pork prices significantly. It noted that developing Asia faces rising food costs, with 2019 and 2020 inflation seen at 2.8% in 2019 and 3.1% in 2020, up from the lender's previous estimate of 2.7% for both the years.

The CNX Nifty is currently trading at 11884.55, up by 27.75 points or 0.23% after trading in a range of 11864.65 and 11888.15. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.58%, GAIL India up by 2.12%, Tech Mahindra up by 1.42%, TCS up by 1.35% and Infosys up by 0.94%. On the flip side, Yes Bank down by 6.63%, Hero MotoCorp down by 0.94%, Hindustan Unilever down by 0.89%, Power Grid Corporation down by 0.79% and Eicher Motors down by 0.75% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 86.27 points or 0.33% to 26,522.89, Taiwan Weighted strengthened 47.86 points or 0.41% to 11,675.70, Straits Times advanced 9.22 points or 0.29% to 3,172.11, KOSPI rose 8.73 points or 0.42% to 2,106.73, Jakarta Composite soared 5.00 points or 0.08% to 6,188.51 and Shanghai Composite gained 3.53 points or 0.12% to 2,920.85. On the flip side, Nikkei 225 was down by 30.53 points or 0.13% to 23,379.66.