Local equities turn flat in morning deals

Subsequent to negative opening, local equity markets pared some of their early losses to trade flat in the morning deals, on the back of buying interest across some blue chip counters. Traders found some comfort with a report that Prime Minister Narendra Modi exuded confidence that the economy has the resilience to bounce back swiftly from the current slowdown and called upon risk-averse companies to take bold investment decisions and help reverse faltering growth. But, sentiments remained lackluster with International Monetary Fund (IMF) chief economist Gita Gopinath’s statement that while it was anticipated that India’s growth will slow down, the current numbers come as a shocker with a sharp decline in both investment and consumption. Some cautiousness also came with a report that after taking a big hit from the falling rate of economic growth in 2019, the job market may remain muted in the New Year as well in terms of workforce expansion and salary hikes as more and more companies are expected to prefer up-skilling of existing staff rather than hiring new ones.

On the global front, Asian markets are trading mixed, as volumes weakened ahead of the Christmas holiday break and investors squared off their positions, taking home hefty gains made earlier this month. Back on domestic turf, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) hit a 13-month low of Rs 69,670 crore in November-end after registering an increase in such fund infusion in the preceding month.

The BSE Sensex is currently trading at 41653.67, down by 27.87 points or 0.07% after trading in a range of 41525.85 and 41701.62. There were 20 stocks advancing against 10 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.21%, while Small cap index was up by 0.12%.

The top gaining sectoral indices on the BSE were Metal up by 0.58%, Auto up by 0.47%, Consumer Disc up by 0.43%, Basic Materials up by 0.39% and IT up by 0.39%, while Energy down by 1.46%, Telecom down by 0.30%, FMCG down by 0.12%, Utilities down by 0.04% and Power was down by 0.00% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 0.98%, Hero MotoCorp up by 0.92%, Bajaj Finance up by 0.88%, Axis Bank up by 0.72% and ONGC was up by 0.64%. On the flip side, Reliance Industries down by 2.37%, Nestle down by 0.83%, Ultratech Cement down by 0.47%, Sun Pharma down by 0.42% and Bharti Airtel was down by 0.33% were the top losers.

Meanwhile, amid factoring in significant deceleration in past few quarters on account of credit squeeze and deterioration in business and consumer confidence, Fitch Ratings has cut its growth forecast for India to 4.6 per cent for the current financial year (FY20) from the previous estimation of 5.6 per cent. However, it expects growth to gradually recover to 5.6 per cent in FY21 and 6.5 per cent in FY22 with support from easing monetary and fiscal policy and structural measures that may also support growth over the medium term.

It reaffirmed India's rating at 'BBB-' with a Stable Outlook saying the rating balances a still strong medium-term growth outlook compared with similar category peers and relative external resilience stemming from solid foreign-reserve buffers against high public debt, a weak financial sector and some lagging structural factors, including governance indicators and GDP per capita. Meanwhile, it said its rating for India incorporates the expectation of moderate slippage in the fiscal deficit target of 3.3 per cent of GDP in FY20.

Besides, the Fitch's FY2020 growth forecast is lower than 4.9 per cent projection by Moody's and 5.1 per cent by Asian Development Bank. The Reserve Bank of India (RBI) has also revised GDP growth forecast to 5 per cent for 2019-20 from 6.1 per cent projected in October.

The CNX Nifty is currently trading at 12273.35, up by 1.55 points or 0.01% after trading in a range of 12229.30 and 12287.15. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.17%, UPL up by 2.00%, Vedanta up by 1.91%, BPCL up by 1.79% and Dr. Reddy’s Lab was up by 1.21%. On the flip side, Reliance Industries down by 2.17%, Nestle down by 1.12%, Grasim Industries down by 0.86%, Britannia down by 0.71% and Ultratech Cement was down by 0.53% were the top losers.

Asian markets are trading mixed, Taiwan Weighted strengthened 19.92 points or 0.17% to 11,979.00, Nikkei 225 surged 5.15 points or 0.02% to 23,821.78, Hang Seng increased 3.32 points or 0.01% to 27,874.67 and Jakarta Composite was up by 2.77 points or 0.04% to 6,287.14.

On the other side, KOSPI fell 2.02 points or 0.09% to 2,202.16, Straits Times trembled 4.27 points or 0.13% to 3,208.12 and Shanghai Composite was down by 14.23 points or 0.47% to 2,990.71.