Local equities recover from early losses; Sensex reclaims 42K mark

Local markets have started firming up from early losses in the morning trade with benchmarks trading higher by around quarter of a percent. Traders turned positive with a report that GDP growth in India and few other large emerging countries may gain some momentum this year after the global economy recorded its lowest growth of 2.3 per cent in 2019 due to prolonged trade disputes. Some positivism also came with Commerce and Industry Minister Piyush Goyal’s statement that India and the US are in an ‘advance stage’ of dialogue to resolve some of the pressing trade issues. He said that both the countries can expand their trade relations which in future may result in a preferential or a free trade agreement. Traders took note of a report that lower lending rates notwithstanding, the growth in non-food credit continues to languish around two-year lows, though it recovered marginally to 7.51% year-on-year (y-o-y) during the fortnight ended January 3, 2020, from 7.08% y-o-y in the previous fortnight.

On the global front, Asian markets were trading mixed. Investor sentiment was boosted by data showing that China's economy grew in line with expectations. Back home, on the sectoral front, Agriculture stock were in focus as government think-tank NITI Aayog member Ramesh Chand stated that farm sector growth is likely to be higher at 3.1% in the current fiscal compared with 2.9% in 2018-19.

The BSE Sensex is currently trading at 42047.44, up by 114.88 points or 0.27% after trading in a range of 41850.29 and 42051.53. 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 0.52%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Energy up by 1.46%, Auto up by 0.73%, Consumer Durables up by 0.55%, Healthcare up by 0.53% and Basic Materials was up by 0.53%, while BANKEX down by 0.24%, PSU down by 0.16%, Realty down by 0.12%, Utilities down by 0.12% and Metal was down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.83%, Reliance Industries up by 2.06%, Hero MotoCorp up by 1.33%, Mahindra & Mahindra was up by 1.13% and Nestle up by 0.73%. On the flip side, IndusInd Bank down by 0.94%, HDFC Bank down by 0.68%, SBI down by 0.54%, Tech Mahindra down by 0.39% and NTPC was down by 0.37% were the top losers.

Meanwhile, government think-tank NITI Aayog member Ramesh Chand has said that India’s farm sector growth is likely to remain higher at 3.1 percent in the current fiscal (FY20) as compared to 2.9 percent in previous fiscal year. He noted that farm sector growth was 2 percent and 2.1 percent in the first and second quarter of the 2019-20, respectively. He felt that more competition and private investment is the need of the hour and the role of private sector in Indian agriculture sector has to come in a big way.

Emphasizing on private investment, NITI Aayog member said the face of agriculture from traditional to modern, and movement of agriculture from present stage to higher evolution will not happen without active involvement of private sector. He also said ‘unless we increase corporate sector's investment and involve them from seed and continuing it up to sale, it would be difficult to cause a breakthrough in growth of agriculture and doubling farmers' income.’

Chand further said that the NITI Aayog was trying to convince the central government to make up its mind in drafting a Model Land Lease Act. With regard to the implementation of the model Agriculture Produce and Livestock Marketing (Promotion and Facilitation) Act and contract farming law, he said, ‘I think we need to persuade the states, we are already trying to do it that those two acts are adopted by the states.’

The CNX Nifty is currently trading at 12379.40, up by 23.90 points or 0.19% after trading in a range of 12321.40 and 12382.30. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 3.92%, Reliance Industries up by 2.07%, Hero MotoCorp up by 1.25%, Mahindra & Mahindra up by 1.14% and Dr. Reddys Lab was up by 1.05%. On the flip side, Bharti Infratel down by 9.20%, Yes Bank down by 2.00%, GAIL India down by 1.94%, Indusind Bank down by 1.12% and HDFC Bank was down by 0.71% were the top losers.

Asian markets are trading mixed, Jakarta Composite lost 10.39 points or 0.17% to 6,275.66, Hang Seng decreased 10.24 points or 0.04% to 28,872.80, Straits Times trembled 3.13 points or 0.10% to 3,274.87 and KOSPI fell 0.92 points or 0.04% to 2,247.13.

On the other hand, Shanghai Composite gained 2.82 points or 0.09% to 3,076.90, Taiwan Weighted strengthened 9.96 points or 0.08% to 12,076.89 and Nikkei 225 surged 97.99 points or 0.41% to 24,031.12.