Local equities continue to trade in green

Local equity benchmarks continued to trade higher in late morning deals on Wednesday. Capital Goods, Industrials and Power counters were on the priority list of the buyers. Market participants took some support from a report that foreign portfolio investments in India significantly improved in calendar year 2019, after receiving the second-highest investments in the last five years. The country received Rs 1,36,835 crore as FPI in 2019. Traders took note of a report that faced with a shortfall in revenue collection, the government has initiated austerity measures by revising downwards the expenditure limit for January-March period of the ongoing financial year. The government has asked all departments to restrict the expenses to 25 per cent of the Budget Estimate (BE) in January-March. Beside, India’s current account deficit (CAD) shrank sharply in the September quarter to $6.3 billion or 0.9% of the gross domestic product (GDP) from 2% in the preceding quarter and 2.9% in the year-ago quarter, as a steep decline in imports reined in the merchandise trade deficit at a below-trend $38.1 billion.

On the global front, Asian market remained closed on account of New Year. Back home, Infrastructure stocks were in focus after Finance Minister Nirmala Sitharaman unveiled Rs 102 lakh crore of infrastructure projects, including Mumbai-Ahmedabad High Speed rail, in the next five years to help achieve the target of USD 5 trillion (around Rs 356 lakh crore) economy by 2025.

The BSE Sensex is currently trading at 41345.49, up by 91.75 points or 0.22% after trading in a range of 41311.50 and 41443.52. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.24%, while Small cap index was up by 0.40%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.89%, Industrials up by 0.70%, Power up by 0.59%, Telecom up by 0.57% and IT was up by 0.56%, while Realty down by 0.22%, BANKEX down by 0.08%, Oil & Gas down by 0.03% and Auto was down by 0.02% were the few losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.34%, TCS up by 0.75%, Power Grid up by 0.71%, Reliance Industries up by 0.55% and Infosys was up by 0.48%. On the flip side, IndusInd Bank down by 1.00%, ONGC down by 0.66%, Nestle down by 0.41%, Bajaj Auto down by 0.17% and ICICI Bank was down by 0.12% were the top losers.

Meanwhile, the PHD Chamber of Commerce and Industry (PHDCCI) president D K Aggarwal has said that PHDCCI expects India's economy is likely to rebound in 2020 and inflation to remain benign on account of reforms such as reduction in corporate tax. He said ‘we believe that speedy implementation and synchronisation of various reforms will refuel our economic growth trajectory soon.’

He further added that 2020 will be a year of economic rebound, wherein the expectation is that the economy will regain its dynamic growth trajectory once again and take its position to become a $5-trillion economy by 2024. He pointed out the economic reforms in 2019 were amazing as the government reduced corporate tax significantly from more than 30 percent to an effective rate of 25.17 percent and 17.01 percent for the new manufacturing units.

Besides, he observed that inflation in 2020 will remain benign except few fluctuations because of weather disruptions. Moreover, he mentioned ‘at this juncture, the focus of the government must be to refuel the consumption demand with a significant reduction in the direct taxes. Thus, reforms in direct taxation are the need of the hour with remarkable rationalisation of tax rates in the forthcoming Budget.’

The CNX Nifty is currently trading at 12193.30, up by 24.85 points or 0.20% after trading in a range of 12184.55 and 12222.20. There were 33 stocks advancing against 16 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Adani Ports up by 2.25%, Larsen & Toubro up by 1.42%, Bharti Infratel up by 1.35%, Wipro up by 0.85% and JSW Steel was up by 0.85%. On the flip side, Eicher Motors down by 1.21%, IndusInd Bank down by 0.99%, Coal India down by 0.95%, ONGC down by 0.70% and GAIL India was down by 0.45% were the top losers.