Benchmarks made optimistic start; Nifty inches towards 12,300 mark

Indian equity benchmarks have made an optimistic start and are approaching record levels, shrugging off weakness in Asian peers. Sentiments remained positive with industry body CII’s statement that India’s economy is expected to rebound in 2020 on the back of measures taken by the government and the RBI coupled with easing of global trade tensions. Some support also came with report that the Reserve Bank of India (RBI) in latest data has stated that the country’s foreign exchange reserves increased by $456 million to a fresh lifetime high of $454.948 billion in the week to December 20. In the previous week, the reserves had swelled by $1.070 billion to $454.492 billion.

On the global front, Asian markets were trading mixed at this point of time with few financial-market catalysts going into the year-end. The US markets ended mixed on Friday as many traders remained away from their desks following Christmas. Back home, NBFC stocks remained in focus as RBI in its Financial Stability Report has said that Non-bank lenders witnessed stress in their asset quality in the first half of the current fiscal, with gross NPA ratio increasing to 6.3 per cent in September 2019 from 6.1 per cent in March.

The BSE Sensex is currently trading at 41694.26, up by 119.12 points or 0.29% after trading in a range of 41638.32 and 41714.73. There were 23 stocks advancing against 7 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.40%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Telecom up by 0.87%, FMCG up by 0.68%, Auto up by 0.67%, Industrials up by 0.61% and Utilities was up by 0.61%, while Energy down by 0.52% and Oil & Gas was down by 0.06% were the only losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.46%, Mahindra & Mahindra up by 0.98%, HDFC Bank up by 0.98%, Kotak Mahindra Bank up by 0.98% and TCS was up by 0.83%. On the flip side, Reliance Industries down by 0.69%, SBI down by 0.42%, Hindustan Unilever down by 0.20%, HDFC down by 0.14% and Infosys was down by 0.14% were the top losers.

Meanwhile, industry body Confederation of Indian Industry (CII) -- President Vikram Kirloskar has said that India's economy is expected to rebound in 2020 on the back of measures taken by the government and the Reserve Bank of India (RBI) coupled with easing of global trade tensions. He mentioned that nascent signs of recovery are noted in the form of improved PMIs (Purchasing Managers' Index) of manufacturing and services, jump in passenger air traffic, sharp moderation in the decline in sales of passenger cars, among others.

He also suggested a flexible fiscal policy that will set a central government's target for the deficit in the range of around 0.5 to 0.75 per cent, and said it is likely to have a significant multiplier effect on the economy. However, he said that the economy may continue to see a subdued Gross Domestic Product (GDP) print in the third quarter of current financial year as well, the quarters thereafter are likely to see a rebound.

According to the CII, with the initial difficulties associated with the goods and services tax (GST) and the Insolvency and Bankruptcy Code (IBC) getting gradually ironed out, the industry is hopeful of substantial benefits for the economy. It said that while 2019 will be remembered as one where the systemic clean-up of the financial sector picked up pace, which might have resulted in short-term pain, this tidying up will have extensive positive ramifications for the economy in the short-to-medium term.

The CNX Nifty is currently trading at 12282.05, up by 36.25 points or 0.30% after trading in a range of 12261.50 and 12285.90. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.46%, Tata Motors up by 1.16%, GAIL India up by 1.14%, Cipla up by 1.13% and Mahindra & Mahindra was up by 1.12%. On the flip side, Yes Bank down by 1.35%, Reliance Industries down by 0.64%, BPCL down by 0.51%, SBI down by 0.46% and Tata Steel was down by 0.30% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 164.11 points or 0.69% to 23,673.61, Jakarta Composite lost 15.88 points or 0.25% to 6,313.43, Straits Times trembled 1.79 points or 0.06% to 3,224.74 and KOSPI was down by 0.12 points or 0.01% to 2,204.09.

On the flip side, Taiwan Weighted strengthened 4.66 points or 0.04% to 12,096.25, Shanghai Composite gained 28.29 points or 0.94% to 3,033.33 and Hang Seng was up by 178.33 points or 0.63% to 28,403.75.