Markets trade in fine-fettle in early deals

Indian equity benchmarks made an optimistic start with gap-up opening on Thursday. Markets were trading in fine-fettle with gains of over a percent each in early deals amid no further escalation in US-Iran tensions. Adding more optimism the Industry body Ficci said that the government should infuse capital in the economy without worrying about the fiscal deficit target as the GDP growth is estimated to slip to 11-year low of 5% during 2019-20. Ficci President Sangita Reddy said the 5% GDP growth estimate for the current financial year is on expected lines as the economic expansion in the first half of the year has been moderate. Traders took note of report that the World Bank has projected a 5% growth rate for India in the 2019-2020 financial year, but said it was likely to recover to 5.8% in the following financial year. Meanwhile, the cabinet committee on parliamentary affairs has recommended holding the Budget session in two phases from January 31 to April 3, with the Union Budget to be presented on February 1.

Global cues remained supportive with all the Asian markets were trading in green following overnight gains on Wall Street, after comments by US President Donald Trump indicated the US would hit Iran with new sanctions, but not respond militarily. Trump also said Iran appeared to be standing down, adding that it was a good thing for all parties concerned and for the world. Trump's comments eased investors' concerns about a wider conflict in the Middle East.

Back home, Oil Minister Dharmendra Pradhan said that in only the second instance of the government directly funding a gas pipeline, the Cabinet Committee on Economic Affairs (CCEA) approved a Rs 5,559 crore viability gap funding for the proposed North-East gas grid. In stock specific development, State Bank of India rallied as it launched a scheme for its home loan customers, wherein it guarantees the refund of the principal amount if a builder fails to complete the project within the stipulated time. However, JSW Energy fell as CARE Ratings assigned the rating of ‘AA-/Credit Watch’ with Negative implications for its Rs 300 crore non-convertible debenture (NCD) issue.

The BSE Sensex is currently trading at 41231.43, up by 413.69 points or 1.01% after trading in a range of 41179.74 and 41318.18. There were 29 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 1.05%, while Small cap index was up by 1.16%.

The top gaining sectoral indices on the BSE were Energy up by 1.51%, Telecom up by 1.43%, Metal up by 1.38%, Oil & Gas up by 1.30% and Bankex was up by 1.26%, while there is no looser in sectoral indices on the BSE.

The top gainers on the Sensex were Indusind Bank up by 1.96%, ICICI Bank up by 1.74%, SBI up by 1.74%, Reliance Industries up by 1.65% and Tata Steel up by 1.62%. On the flip side, TCS down by 0.74% were the sole loser.

Meanwhile, the World Bank in its latest edition of the Global Economic Prospects has stated that growth in India is projected to decelerate to 5% in financial year (FY) 2019/20, which ends March 31, amid enduring financial sector issues. But, it also said that growth is likely to recover to 5.8% in the following financial year. It added that key risks to the outlook include a sharper-than-expected slowdown in major economies, a re-escalation of regional geopolitical tensions, and a setback in reforms to address impaired balance sheets in the financial and corporate sectors.

In India, the World Bank said tighter credit conditions in the non-banking sector are contributing to a substantial weakening of the domestic demand in the country. It also said activity was constrained by insufficient credit availability, as well as by subdued private consumption. It added that India’s economic activity slowed substantially in 2019, with the deceleration most pronounced in the manufacturing and agriculture sectors, whereas government-related services sub-sectors received significant support from public spending. GDP growth decelerated to five percent and 4.5% in the April-June and July-September quarters of 2019, respectively, the lowest readings since 2013.

On the global front, the report said the global economic growth is forecast to edge up to 2.5% in 2020 as investment and trade gradually recover from last year's significant weakness, but downward risks persist. The US' growth is forecast to slow to 1.8% this year, reflecting the negative impact of earlier tariff increases and elevated uncertainty. The Euro area's growth is projected to slip to a downwardly revised 1% in 2020 amid weak industrial activity. It added that with the growth in emerging and developing economies likely to remain slow, policymakers should seize the opportunity to undertake structural reforms that boost broad-based growth, which is essential to poverty reduction.

The CNX Nifty is currently trading at 12156.45, up by 131.10 points or 1.09% after trading in a range of 12132.55 and 12177.00. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 4.36%, JSW Steel up by 3.81%, Zee Entertainment up by 3.61%, Indusind Bank up by 2.43% and SBI up by 2.05%. On the flip side, TCS down by 0.83% and Coal India down by 0.67% were the top losers.

All Asian markets are trading higher; Nikkei 225 surged 466.87 points or 2.01% to 23,671.63, Hang Seng increased 297.33 points or 1.06% to 28,385.25, Taiwan Weighted strengthened 141.58 points or 1.2% to 11,958.68, Jakarta Composite soared 23.75 points or 0.38% to 6,249.44, KOSPI rose 23.52 points or 1.09% to 2,174.83, Shanghai Composite gained 14.47 points or 0.47% to 3,081.36 and Straits Times advanced 2.10 points or 0.06% to 3,247.99.