Local equities continue upward rally

Local equity benchmarks continued their upward rally in morning session, with the Sensex and Nifty gaining more than 250 and 70 points, respectively. Traders took encouragement from Commerce and Industry Minister Piyush Goyal’s statement that the country is well poised to attract investments that wish to move out of China. He said the tax reforms introduced by the government recently will ensure investments come back to India. Market participants took note of IMF chief economist Gita Gopinaths’ report that in the near term, the main challenge is to deal with potential downside risks. The trade deal between the US and China that will de-escalate trade tensions, along with other developments like reduced likelihood of a no-deal BREXIT, is likely to support a pick-up in the global economic activity in 2020. Beside, Union Finance Minister Nirmala Sitharaman stated that the government is focusing on improving data credibility amid concerns over computing methodologies for various macro-economic data. The aspects which are being looked at include Gross Domestic Product (GDP), inflation and employment. However, traders ignored Moody’s report as it has cut its FY20 GDP growth forecast for India steeply to 4.5% from 5.8% predicted in October. The agency had predicted India’s growth this fiscal to be 6.2% in August.

On the global front, Asian were trading mostly in green, but a lack of detail about the Sino-US trade deal tempered some of the exuberance that sent Wall Street to record highs overnight, while familiar fears of a hard BREXIT knocked the pound. Back home, Economic Advisory Council of the Fifteenth Finance Commission has discussed issues related to GST stabilisation and possible ways to improve tax collection for additional resource mobilisation. Advisory Council was informed about submission of the 2020-21 report and now the Commission is on its next task of preparing the report for 2021-26 period.

The BSE Sensex is currently trading at 41230.13, up by 291.41 points or 0.71% after trading in a range of 41005.18 and 41262.88. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.39%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Metal up by 2.06%, IT up by 1.41%, TECK up by 1.25%, Basic Materials up by 1.18% and FMCG was up by 0.89%, while Consumer Durables down by 0.14% was the lone losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.23%, Vedanta up by 2.96%, Yes Bank up by 1.92%, TCS up by 1.63% and Infosys was up by 1.62%. On the flip side, ONGC down by 0.80%, Sun Pharma down by 0.48%, NTPC down by 0.39%, Bajaj Auto down by 0.34% and Power Grid was down by 0.13% were the top losers.

Meanwhile, indicating India is well poised to attract investments that wish to move out of China, the Commerce and Industry Minister Piyush Goyal has said that the tax reforms introduced by the government recently will ensure investments come back to India. He further said the government is also looking at pooling together land which state and central governments have got to offer to investors for setting up their businesses in India.

He said ‘I have got PSUs including railways to create land pools for making land available easier to investors. We are monitoring and tracking that investment comes to India.’ Besides, talking about the progress of the bilateral trade talks between India and US, Goyal said that ‘as regards trade deals and the decisions, they are long drawn affairs. They are not something which close immediately. You have to go into trade detail.’

He said ‘you have to see its impact, its forward and backward linkages, its impact in the long run and short run, corresponding benefits we get from the trade deal and I assure you that we have made significant progress in the past few months.’  He further said the government has almost been able to sort out various differences that prevail between the US and India.

The CNX Nifty is currently trading at 12125.95, up by 72.00 points or 0.60% after trading in a range of 12070.35 and 12142.15. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.28%, Vedanta up by 3.02%, JSW Steel up by 2.51%, Zee Entertainment up by 1.99% and Yes Bank was up by 1.92%. On the flip side, GAIL India down by 1.40%, UPL down by 0.84%, Sun Pharma down by 0.79%, ONGC down by 0.76% and NTPC was down by 0.61% were the top losers.

Asian markets were trading mostly in green, Hang Seng increased 335.45 points or 1.22% to 27,843.54, Taiwan Weighted strengthened 124.73 points or 1.04% to 12,064.50, Nikkei 225 surged 101.33 points or 0.42% to 24,053.68, Shanghai Composite gained 28.86 points or 0.97% to 3,013.25, KOSPI rose 24.34 points or 1.12% to 2,192.49 and Jakarta Composite was up by 1.38 points or 0.02% to 6,212.97. On the other hand, Straits Times was down by 1.32 points or 0.04% to 3,204.77.