Markets trade flat in early deals; Sensex above 41K mark

Indian equity benchmarks made optimistic start and hit a record highs on the back of easing US-China trade conflict truce. But, soon lose momentum and trimmed gains to trade flat in early deals on Monday as cautiousness came in with weak exports data. As per the government data, India’s exports contracted for the fourth month in a row in November, dipping 0.34% to $25.98 billion, mainly on account of poor shipments of petroleum, gems & jewellery and leather products. Imports too declined by 12.71% to $38.11 billion in November, narrowing the trade deficit to $12.12 billion. Also, market participants were eyeing the data on Wholesale Price Index (WPI) inflation for November to be released later in the day. However, downside remained capped with the Reserve Bank of India’s (RBI) data showing that India's services exports rose 5.25% to $17.70 billion in October, while imports remained nearly flat at $10.86 billion. Traders took note of a report that the country's foreign exchange reserves surged by $2.342 billion to touch a life-time high of $453.422 billion in the week to December 6.

On the global front, Asian markets were trading mixed amid investors were cautious as they awaited further details of the partial trade pact and shrugged off data that showed China's industrial production as well as retail sales rose more than expected in November. The US and China announced on Friday that they have reached a phase one trade deal. US Trade Representative Robert Lighthizer said that the phase one US-China trade deal is totally done and will nearly double US exports to China over the next two years.

Back home, banking stocks were in focus with rating agency Moody’s report that banks may see a spike in bad loans because of stress in the non-banking financial company (NBFC) sector and it warned that the trend of improvement in key bank metrics is likely to reverse or slow. In scrip specific development, BEML rose after the government said it would sell 28 percent of its stake in the company through strategic disinvestment. Punjab National Bank fell on the BSE. As per RBI's risk-assessment report, the bank has under-reported its non-performing assets by Rs 2,617 crore for the fiscal year 2018-19.

The BSE Sensex is currently trading at 41060.82, up by 51.11 points or 0.12% after trading in a range of 41015.64 and 41185.03. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.08%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were IT up by 0.77%, TECK up by 0.68%, Realty up by 0.45%, Energy up by 0.31% and Healthcare was up by 0.27%, while FMCG down by 0.33%, PSU down by 0.16%, Industrials down by 0.13%, Metal down by 0.10% and Oil & Gas was down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 2.01%, Tech Mahindra up by 1.63%, HCL Technologies up by 1.61%, TCS up by 1.08% and Bajaj Auto up by 0.88%. On the flip side, Sun Pharma Industries down by 1.41%, Hindustan Unilever down by 0.84%, Yes Bank down by 0.75%, ITC down by 0.58% and Axis Bank down by 0.45% were the top losers.

Meanwhile, with an aim to boost economic growth, Chief Economic Advisor Krishnamurthy Subramanian has said the government is focusing on increasing consumption. Highlighting steps taken by government to improve Indian economy, he said the measures include corporate tax cuts to improve risk-return of companies. Also, capitalisation of public sector banks and giving last-mile funding to realty projects was announced.

He further said as much as Rs 4.47 trillion has been sanctioned to non-banking financial institutions and housing finance companies to support retail lending, and added that 17 proposals amounting to Rs 7,657 crore had been approved under partial credit guarantee scheme. Also, 66 per cent of budgeted capex of Rs 3.38 trillion has already undertaken.

Subramanian said railway and road ministries will have undertaken capex of Rs 2.46 trillion by December 31. More than 8 lakh repo-linked loans amounting to Rs 70,000 crore have been sanctioned till November 27. He also said Rs 60,314 crore of capital has been infused into PSU banks. Lenders have disbursed Rs 2.2 trillion to corporates and Rs 72,985 crore to MSMEs.

The CNX Nifty is currently trading at 12077.85, down by 8.85 points or 0.07% after trading in a range of 12076.20 and 12134.65. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 1.67%, HCL Technologies up by 1.45%, Tech Mahindra up by 1.30%, Bharti Infratel up by 1.07% and TCS up by 1.00%. On the flip side, Adani Ports & SEZ down by 2.28%, Sun Pharma Industries down by 1.62%, Indian Oil Corporation down by 1.40%, Yes Bank down by 1.18% and JSW Steel down by 0.93% were the top losers.

Asian markets were trading mixed; Jakarta Composite soared 35.80 points or 0.58% to 6,233.12, Taiwan Weighted strengthened 23.50 points or 0.2% to 11,951.23, Shanghai Composite gained 1.84 points or 0.06% to 2,969.52 and Straits Times advanced 0.98 points or 0.03% to 3,215.03. On the flip side, KOSPI fell 1.43 points or 0.07% to 2,168.82, Nikkei 225 slipped 4.51 points or 0.02% to 24,018.59 and Hang Seng was down by 102.58 points or 0.37% to 27,585.18.