Indian equities trade near fresh record highs

Indian equity benchmarks were trading near fresh record highs in late afternoon session, despite mixed cues from European markets. Traders remained optimistic, as Union Minister Nitin Gadkari approved changes in the Interest Subvention Scheme guidelines for micro, small and medium enterprises, and said the modifications are expected to boost their productivity through access to credit at reduced cost. Besides, the central government has released Rs 35,298 crore to states to make up for the loss of revenue due to rollout of the Goods and Services Tax (GST). Separately, Economic Advisory Council of the Fifteenth Finance Commission discussed issues related to GST stabilisation and possible ways to improve tax collection for additional resource mobilisation.

On the global front, European markets were trading mixed, as the UK private sector contracted the most since mid-2016 as domestic political and Brexit uncertainties weighed on activity. The flash survey results from IHS Markit and the Chartered Institute of Procurement & Supply showed that the composite output index fell to 48.5 in December from 49.3 in November. However, Asian markets were trading in green, despite Singapore's non-oil domestic exports declined at a slower rate in November. The data from Enterprise Singapore showed that non-oil domestic exports decreased 5.9 percent year-on-year in November, following a 12.5 percent decline in October.

The BSE Sensex is currently trading at 41257.40, up by 318.68 points or 0.78% after trading in a range of 41005.18 and 41308.61. There were 21 stocks advancing against 9 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Metal up by 2.83%, Basic Materials up by 1.51%, IT up by 1.49%, TECK up by 1.34% and Industrials up by 0.94%, while Consumer Durables down by 0.87%, Realty down by 0.49%, Healthcare down by 0.35% and Energy down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.06%, Tata Motors - DVR up by 3.85%, Vedanta up by 3.63%, Tata Motors up by 2.80% and HDFC up by 2.14%. On the flip side, Sun Pharma down by 1.56%, Hindustan Unilever down by 1.06%, Mahindra & Mahindra down by 0.60%, Axis Bank down by 0.52% and Bajaj Auto down by 0.51% were the top losers.

Meanwhile, with an effort towards giving fillip to the MSME sector, the Minister for Road Transport & Highways and MSME, Nitin Gadkari has given an approval for changes in the Interest Subvention Scheme guidelines for MSMEs. The Minister reviewed the functioning of the scheme and said that the changes are expected to boost productivity of MSMEs through access to credit at reduced cost.

Nitin Gadkari also highlighted the government’s commitment for enhancing credit to the MSME sector and added that the implementation of the scheme is being closely monitored to help MSMEs get incremental credit of up to Rs 1 crore with an interest subvention of 2 per cent.

The modifications to the scheme include settlement of claims based on internal or concurrent auditor certificate and submission of statutory auditor's certificate once by June 30, 2020; and acceptance of claims in multiple lots for a given half year by eligible institutions.

Meanwhile, the modifications in operational guidelines carried out are based on suggestions made by various stakeholders, including banks and lending institutions who had brought to light operational difficulties that were hindering a smooth roll-out of the scheme.

The CNX Nifty is currently trading at 12139.90, up by 85.95 points or 0.71% after trading in a range of 12070.35 and 12157.50. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.99%, Vedanta up by 3.70%, Hindalco up by 3.31%, Tata Motors up by 2.89% and JSW Steel up by 2.13%. On the flip side, GAIL India down by 1.82%, Sun Pharma down by 1.62%, Bharti Infratel down by 1.21%, Titan down by 1.09% and Hindustan Unilever down by 1.06% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 293.93 points or 1.07% to 27,802.02, Taiwan Weighted strengthened 157.24 points or 1.32% to 12,097.01, Nikkei 225 surged 113.77 points or 0.47% to 24,066.12, Shanghai Composite gained 43.43 points or 1.46% to 3,027.82, KOSPI rose 27.53 points or 1.27% to 2,195.68 and Jakarta Composite was up by 4.90 points or 0.08% to 6,216.49. On the flip side, Straits Times was down by 0.56 points or 0.02% to 3,205.53.

European markets were trading mixed; UK’s FTSE 100 rose 1.54 points or 0.02% to 7,520.59, France’s CAC fell 17.90 points or 0.30% to 5,973.76 and Germany’s DAX was down by 41.16 points or 0.31% to 13,366.50.