Local equities trade marginally in green; Sensex holds 41,400 mark

Local equity benchmarks continue to trade marginally in green in morning session ahead of the crucial goods and services tax (GST) Council meet. The Council is expected to review the taxation structure for shoring up the revenue as lower-than-expected collections has led to a delay in compensation payment to states. IT, TECK and Auto have elevated with gains on their respective front line stocks. Some positivism came with a report that the National Housing Bank has revised its Rs 30,000 crore liquidity infusion facility (LIFt) scheme to encourage housing finance companies to avail refinance funds. Under the revised LIFt scheme, exposure cap of Rs 750 crore per HFC and exposure ceiling of 50 per cent of individual housing loan (IHL) have been removed. Some comfort also came with Defence Minister Rajnath Singh’s statement that India is impacted to some extent by the global economic slowdown but expressed confidence that the country will come out of the difficult situation within a short time. Meanwhile, as per a private report, the government is likely to trim personal income tax rates and cut the tax on long-term capital gains from equity investments in its next budget, in a bid to spur economic growth.

On the global front, Asian markets were trading mixed, after record highs on Wall Street amid investor optimism about an interim US-China trade deal announced last week were tempered by fresh worries of a hard Brexit. Back home, Former Reserve Bank of India (RBI) Governor D Subbarao has asked the government to ensure fiscal deficit is within the targeted number and warned that fiscal profligacy can lead to crisis situations.

The BSE Sensex is currently trading at 41,400.70, up by 48.53 points or 0.12% after trading in a range of 41358.47 and 41480.91. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.34%, while Small cap index was down by 0.02%.

The top gaining sectoral indices on the BSE were IT up by 0.88%, TECK up by 0.63%, Auto up by 0.33%, Metal up by 0.21% and Healthcare was up by 0.12%, while Utilities down by 0.80%, PSU down by 0.80%, FMCG down by 0.60%, Power down by 0.56% and Telecom was down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.61%, Tech Mahindra up by 1.29%, Tata Motors up by 1.17%, TCS up by 0.98% and Infosys was up by 0.75%. On the flip side, Hindustan Unilever down by 2.42%, SBI down by 1.25%, Yes Bank down by 1.05%, Power Grid down by 0.96% and Axis Bank was down by 0.62% were the top losers.

Meanwhile, International Monetary Fund’s (IMF) Chief Economist Gita Gopinath has said that IMF may cut India's growth estimate significantly in January 2020. She mentioned that the IMF would be reviewing the October estimates in January.  The IMF in its October forecast had projected 6.1 per cent growth for India in 2019 and the same to go up to 7 per cent in 2020. She said ‘if you look at recent incoming data, we would be revising our numbers and come up with numbers in January, and it is likely to be a significant downward revision for India.’ she noted that India has thrown a surprise by being the only emerging market to have had such a show.

Besides, she sounded doubtful about the country achieving $5 trillion GDP target by FY2025, and chose to present her case arithematically.  She said India will have to grow at 10.5 per cent in nominal terms as against 6 per cent in the last six years, and 8-9 per cent in real terms in order to achieve the target. She pitched for the government utilising its massive mandate to bring in land and labour market reforms as essential aspects if India were to achieve its $5 trillion aspiration.

Moreover, she warned that the fiscal situation in India is 'challenging' and the country will certainly breach the 3.4 per cent deficit target. On the fiscal management front, she acknowledged the cut in corporate taxes announced earlier this year, but rued that there was no revenue increasing measure announced in parallel.

The CNX Nifty is currently trading at 12178.50, up by 13.50 points or 0.11% after trading in a range of 12163.45 and 12199.05. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Wipro up by 2.02%, Mahindra & Mahindra up by 1.68%, Tech Mahindra up by 1.38%, JSW Steel up by 1.29% and TCS was up by 1.20%. On the flip side, Hindustan Unilever down by 2.34%, GAIL India down by 2.30%, Zee Entertainment down by 1.23%, SBI down by 1.20% and Yes Bank was down by 1.05% were the top losers.

Asian markets were trading mixed; Nikkei 225 slipped 126.64 points or 0.53% to 23,939.48, Hang Seng decreased 20.55 points or 0.07% to 27,823.16, KOSPI fell 4.96 points or 0.23% to 2,190.72 and Shanghai Composite was down by 2.36 points or 0.08% to 3,020.06.

On the other hand, Straits Times advanced 8.58 points or 0.27% to 3,209.38, Jakarta Composite soared 11.67 points or 0.19% to 6,256.02 and Taiwan Weighted was up by 16.17 points or 0.13% to 12,113.18.