Key indices keep head above water in morning deals

Local equity benchmarks managed to keep their head above water in morning deals with both Sensex and Nifty were trading above 41,000 and 12,050 marks, respectively. Buying was seen in IT, TECK and Utilities stocks, while selling was witnessed in FMCG, Metal and Telecom stocks. Some comfort came with Chief Economic Advisor Krishnamurthy Subramanian’s statement that the government is focusing on increasing consumption to boost economic growth. Highlighting steps taken by government to improve Indian economy, he said that the measures include corporate tax cuts to improve risk-return of companies. However, upside remain capped as 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.

On the global front, Asian markets were trading mostly in green as United States and China reached a historic agreement on a phase one trade deal reaching a big breakthrough in the over 18-month-long bruising trade war between the world's two largest economies that threatened to roil the global economy. Back on street, market participants were eyeing announcement of wholesale inflation data later in the day. In scrip specific development, Ashiana Housing gained on converting 244 EoIs into booking of 'Ashiana Aditya' project. However, Sun Pharma slipped as its Halol facility gets 8 observations from USFDA.

The BSE Sensex is currently trading at 41043.28, up by 33.57 points or 0.08% after trading in a range of 40984.65 and 41185.03. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.06%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were IT up by 1.06%, TECK up by 0.83%, Utilities up by 0.80%, Power up by 0.62%, Healthcare up by 0.60%, while FMCG down by 0.77%, Metal down by 0.47%, Telecom down by 0.47%, Energy down by 0.36% and Auto was down by 0.35% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.91%, TCS up by 1.69%, HCL Tech up by 1.48%, Kotak Mahindra Bank up by 1.10% and Power Grid Corporation was up by 0.83%. On the flip side, Sun Pharma down by 1.40%, ITC down by 1.30%, Hindustan Unilever down by 1.12%, Yes Bank down by 0.96% and Hero MotoCorp was down by 0.89% were the top losers.

Meanwhile, Moody's Investors Service in its latest report has lowered 2019 gross domestic product (GDP) growth forecast for India to 5.6 per cent, which is lower than 7.4 per cent growth in 2018, as slow employment growth weighs on consumption. Moody's future said that it expects economic growth to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent, respectively, but sees the pace of growth remaining lower than past.

It noted that India's economic growth has decelerated since mid-2018, with real GDP growth slipping from nearly 8 per cent to 5 per cent in the second quarter (April-June) of 2019. It further slipped to 4.5 per cent in July-September quarter.

Besides, it highlighted that fiscal measures undertaken by the government - such as corporate tax rate cuts, bank recapitalisation, infrastructure spending plans, support for the auto sector and others - do not directly address widespread weakness in consumption demand, which has been the chief driver of the economy. Moreover, it said that interest rate cuts by the Reserve Bank of India (BRI) are not being adequately transmitted to lending rates because of the credit squeeze caused by disruption in the non-bank financial sector.

The CNX Nifty is currently trading at 12088.25, up by 1.55 points or 0.01% after trading in a range of 12075.95 and 12134.65. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 1.92%, Tech Mahindra up by 1.82%, TCS up by 1.70%, HCL Tech up by 1.50% and Bharti Infratel was up by 1.03%. On the flip side, Adani Ports & SEZ down by 2.07%, Sun Pharma down by 1.51%, JSW Steel down by 1.46%, Indian Oil Corporation down by 1.40% and ITC was down by 1.32% were the top losers.

Asian markets were trading mostly in green, Taiwan Weighted strengthened 35.81 points or 0.3% to 11,963.54, Straits Times advanced 2.93 points or 0.09% to 3,216.98, Shanghai Composite gained 1.94 points or 0.07% to 2,969.62 and Jakarta Composite was up by 28.17 points or 0.45% to 6,225.49.
On the flip side, Hang Seng decreased 91.99 points or 0.33% to 27,595.77, KOSPI fell 0.29 points or 0.01% to 2,169.96 and Nikkei 225 was down by 25.97 points or 0.11% to 23,997.13.