Local equities trim some early gains

Local equity benchmarks trimmed some of their gains in morning session, but continue to trade above the neutral lines amid mixed global clues. Traders were seen piling positions in Telecom, PSU and Consumer Durables sector, while selling was witnessed in FMCG, Healthcare and Realty sector stocks. Traders turned concerned with World Bank’s report as it warned a wave of debt in emerging and developing nations has grown faster and larger than in any period of the last five decades and could end with another crisis. Sentiments also turned pessimistic with Union Rural Development Minister Narendra Singh Tomar’s statement that the dream of India becoming a 5 trillion dollar economy cannot be achieved if the villages in the country are ignored. Meanwhile, a survey showed that brands are slow in passing on benefits of GST rate reduction to consumers who want profiteering probes to look beyond the individual line item complained upon. Though, some positivism remain on the streets as a private report indicated that it expects the Reserve Bank of India to cut the repo rate to 4.9% by March 2020 and 4.35% by September 2020 if global growth slows, and also said fiscal deficit is anticipated to slip to 3.8% of the GDP this year.

On the global turf, Asian markets are trading mixed, after Wall Street posted more record highs, extending the market’s gains for the week. Back home, on the sectoral front, aviation industry stocks remain in focus as ICRA reported that it is expecting that domestic passenger traffic growth likely to decline to a six-year low of 4.5 percent in the current financial year (FY20), after five years of double digit growth.

The BSE Sensex is currently trading at 41698.71, up by 24.79 points or 0.06% after trading in a range of 41656.14 and 41809.96. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.19%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Telecom up by 1.24%, PSU up by 0.69%, Consumer Durables up by 0.66%, Industrials up by 0.41% and Utilities was up by 0.37%, while FMCG down by 0.43%, Healthcare down by 0.23%, Realty down by 0.16% and Basic Materials was down by 0.10% were the few losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.11%, Hero MotoCorp up by 2.28%, SBI up by 2.12%, Bharti Airtel up by 0.89% and ICICI Bank was up by 0.87%. On the flip side, ITC down by 0.88%, Vedanta down by 0.84%, Kotak Mahindra Bank down by 0.71%, Hindustan Unilever down by 0.60% and HDFC was down by 0.59% were the top losers.

Meanwhile, rating agency ICRA has said it is expecting that domestic passenger traffic growth likely to decline to a six-year low of 4.5 percent in the current financial year (FY20), after five years of double digit growth, and the financial health of the aviation industry will continue to deteriorate. The agency expects Indian carriers to trim combined losses by 22 percent to Rs 7,800 crore this fiscal as against Rs 10,000 crore in the year-ago period, helped by parking of almost of the Rs 58,000 crore debt of Air India in the special purpose vehicle from its balance sheet.

It mentioned that excluding Air India, the rest of the industry is expected to report net loss of around Rs 1,500 crore in the fiscal with a total debt of around Rs 7,000 crore as on March 31, 2020.The industry prospects are expected to gradually improve, contingent on the movement in the jet fuel prices.

It highlighted that a series of events during the current fiscal such as grounding of Jet Airways earlier this year, grounding of the Boeing 737 Max aircraft due to technical issues and the recurrent problems with the Pratt & Whitney engines in A320neos have impacted the industry's capacity and thereby the passenger growth.

The CNX Nifty is currently trading at 12276.45, up by 16.75 points or 0.14% after trading in a range of 12252.75 and 12293.90. There were 29 stocks advancing against 20 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Bharti Infratel up by 3.47%, Yes Bank up by 2.81%, Zee Entertainment up by 2.34%, SBI up by 2.29% and Hero MotoCorp was up by 2.20%. On the flip side, Vedanta down by 0.84%, GAIL India down by 0.76%, ITC down by 0.63%, Hindustan Unilever down by 0.60% and HDFC was down by 0.50% were the top losers.

Asian markets are trading mixed, Hang Seng increased 101.85 points or 0.37% to 27,902.34, Shanghai Composite gained 5.83 points or 0.19% to 3,022.90, KOSPI rose 4.14 points or 0.19% to 2,200.70 and Straits Times was up by 0.62 points or 0.02% to 3,208.04.

On the other side, Jakarta Composite lost 12.45 points or 0.2% to 6,237.48, Nikkei 225 slipped 27.47 points or 0.12% to 23,837.38 and Taiwan Weighted was down by 34.68 points or 0.29% to 11,984.22.