Key indices remain in green terrain

In a volatile session, Indian equity indices managed to remain in green terrain in late afternoon session. In line with the larger peers, the broader markets were also trading higher, while power stocks gained the most among all major sectoral indices on the BSE. The street were getting relief with a survey report that with bullish hiring sentiments, private sector players are likely to create seven lakh jobs and the overall increase in salaries is projected to be around 8 percent in the New Year. However, gains remained capped, as the country's fiscal deficit hit 114.8 per cent of 2019-20 budget estimate at Rs 8.07 lakh crore at the end of November. The fiscal deficit or the gap between expenditure and revenue was at Rs 8,07,834 crore as on November 30, 2019. On the global front, the major European markets and Asian markets remain closed on account of New Year holiday.

On the sectoral front, the realty sector stocks were in watch, amid private report stating that investment in India's real estate sector is likely to rise by 5 percent to $6.5 billion (around Rs 46,000 crore) this year, driven mainly by huge demand for commercial office assets from IT firms. Besides, the banking sector stocks also remained in focus, after the latest data from the Reserve Bank of India showed that non-food credit growth of banks slowed to 7.2 per cent to Rs 86.73 lakh crore in November. The credit had grown 13.8 per cent to Rs 80.93 lakh crore in the corresponding month of the previous year.

The BSE Sensex is currently trading at 41294.19, up by 40.45 points or 0.10% after trading in a range of 41251.18 and 41443.52. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.23%, while Small cap index was up by 0.60%.

The top gaining sectoral indices on the BSE were Power up by 1.68%, Utilities up by 1.32%, IT up by 0.63%, Capital Goods up by 0.62% and Industrials was up by 0.56%, while Consumer Durables down by 1.36%, Auto down by 0.38%, Bankex down by 0.30%, Telecom down by 0.30% and Metal was down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.52%, NTPC up by 1.76%, Larsen & Toubro up by 0.97%, Mahindra & Mahindra up by 0.86% and HDFC was up by 0.67%. On the flip side, Titan down by 2.80%, Indusind Bank down by 1.52%, Bajaj Auto down by 0.91%, Maruti Suzuki down by 0.80% and Axis Bank was down by 0.72% were the top losers.

Meanwhile, owing to factors like decline in tax revenue, a lower nominal GDP and higher expenditure, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report estimated that the aggregate fiscal deficit of states will touch 3.0% of gross domestic product (GDP) in FY20 as against the budgeted figure of 2.6%.

The rating agency said that in aggregate, states have budgeted Rs 30.97 lakh crore in the total revenue for FY20, while tax revenue growth has been assumed to grow 11.5%. Further, it said that states' tax collections fall under three different revenue heads -- states' own tax revenue (SOTR, state goods and service tax (SGST)), share in central taxes (central goods and service tax (CGST)) and grants (GST compensation).

Ind-Ra also underlined that share of states in central taxes has been budgeted to grow 13.98% year-on-year in FY20. However, it contracted 2.7% year-on-year in FY20 (April to October), exerting pressure on states' fiscal deficit.

Besides, the report said that while states in aggregate have budgeted Rs 8.5 lakh crore as their share in central taxes, the Central government has budgeted states' share at Rs 8.1 lakh crore in the FY20 Union Budget. Even to meet the Rs 8.1 lakh crore target, central taxes will have to grow at 15.1% during the rest of FY20 (November 2019 to March 2020) which looks unlikely.

The CNX Nifty is currently trading at 12183.35, up by 14.90 points or 0.12% after trading in a range of 12165.30 and 12222.20. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 3.25%, Power Grid up by 2.52%, NTPC up by 1.93%, Vedanta up by 1.44% and Larsen & Toubro was up by 1.04%. On the flip side, Titan down by 2.71%, Eicher Motors down by 1.58%, Indusind Bank down by 1.37%, ONGC down by 0.82% and Bajaj Auto was down by 0.79% were the top losers.