Markets trade higher in early deals; Sensex above 41400 mark

Indian equity benchmarks made slightly positive start and are trading higher with gains of around one third of a percent each in early deals on Thursday, helped by buying in metal counters. Investors are eyeing Markit Manufacturing PMI data for December which will be released later in the day. Traders took encouragement with the commerce and industry ministry data showing that foreign direct investment (FDI) into India grew 15% to $26 billion during the first half of the current financial year. Inflow of FDI during April-September of 2018-19 stood at $22.66 billion. Some support also came with the government data showing that Goods and Services Tax (GST) revenue collection remained above Rs 1 lakh crore mark for the second month in a row with December mop-up rising to Rs 1.03 lakh crore as compared to the year-ago period. Market participants overlooked a private report that India will struggle to achieve 5% GDP growth in 2020 as the significant deceleration in past few quarters was largely owing to credit squeeze which is a cyclical problem.

Global cues remained supportive with most of the Asian markets were trading in green, led by China, as investors’ sentiment was bolstered by reports that the much-awaited phase one trade deal between the US and China will be signed on January 15. In addition, the People's Bank of China said it will lower the reserve requirement ratio for banks by 50 basis points with effect from January 6. The move will enable banks to boost lending to small business.

Back home, NBFCs stocks were in focus as the Reserve Bank of India (RBI) extended, for another six months, existing relaxations for securitization of assets by non-banking financial companies (NBFCs). The move is expected to provide NBFCs with some more breathing space to repair their broken balance-sheets by selling assets and improving liquidity. In stock specific development, Tata Motors gained, despite reporting a 12% decline in total vehicle sales in the domestic market. Steel Authority of India jumped after it reported a 47% rise in sales during December.

The BSE Sensex is currently trading at 41454.63, up by 148.61 points or 0.36% after trading in a range of 41328.45 and 41478.59. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.25%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Metal up by 1.25%, Basic Materials up by 0.95%, Realty up by 0.65%, Telecom up by 0.64% and Energy was up by 0.53%, while Consumer Durables down by 0.37%, Power down by 0.28% and Utilities was down by 0.16% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.91%, Ultratech Cement up by 1.11%, Bharti Airtel up by 0.84%, Indusind Bank up by 0.83% and Reliance Industries up by 0.75%. On the flip side, Titan Company down by 0.97%, Mahindra & Mahindra down by 0.58%, NTPC down by 0.41%, Power Grid Corporation down by 0.33% and Bajaj Auto down by 0.32% were the top losers.

Meanwhile, the commerce and industry ministry’s latest data has showed that foreign direct investment (FDI) into India grew 15% to $26 billion during the first half of the current financial year (H1FY20) as compared to $22.66 billion during April-September of 2018-19, despite a slowdown in the global economy. FDI is important as the country requires major investments to overhaul its infrastructure sector to boost growth.

As per the data, sectors, which attracted maximum foreign inflows during April-September 2019-20, include services ($4.45 billion), computer software and hardware ($4 billion), telecommunications ($4.28 billion), automobile ($2.13 billion) and trading ($2.14 billion). Singapore continued to be the largest source of FDI in India during the H1FY20 with $8 billion investments. It was followed by Mauritius ($6.36 billion), the US ($2.15 billion), the Netherlands ($2.32 billion), and Japan ($1.78 billion).

Recently, the government had relaxed foreign investment norms in sectors such as brand retail trading, coal mining and contract manufacturing. Enthused by a record foreign investment inflow, India is optimistic of continuing to be one of the world's favourite FDI destinations in 2020 on the back of government's liberalised norms and a significant jump in the ease of doing business ranking.

The CNX Nifty is currently trading at 12213.70, up by 31.20 points or 0.26% after trading in a range of 12195.25 and 12230.95. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 2.01%, Tata Steel up by 1.79%, Ultratech Cement up by 1.28%, Grasim Industries up by 1.23% and Hindalco up by 1.21%. On the flip side, Zee Entertainment down by 2.03%, Bajaj Auto down by 0.92%, Coal India down by 0.83%, Titan Company down by 0.77% and NTPC down by 0.66% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 292.54 points or 1.04% to 28,482.29, Taiwan Weighted strengthened 107.49 points or 0.9% to 12,104.63, Shanghai Composite gained 37.04 points or 1.21% to 3,087.16 and Straits Times advanced 11.44 points or 0.35% to 3,234.27. On the flip side, KOSPI fell 16.58 points or 0.75% to 2,181.09 and Jakarta Composite was down by 20.16 points or 0.32% to 6,279.38.