Markets trade higher with marginal gains in early deals

Indian equity benchmarks made a weak start on Friday amid mixed cues from global markets. There was some cautiousness over a private report stating that government's tax revenue shortfall for FY20 is estimated to be at around Rs 2 lakh crore. As per the report, the revenue shortfall from direct tax sources is being pegged at around Rs 1.5 lakh crore to Rs 1.8 lakh crore, while that from indirect sources is estimated to be at around Rs 30,000 crore to Rs 60,000 crore. But, soon markets gained momentum and were trading higher with marginal gains in early deals, as some respite came in with Union Commerce and Industry Minister Piyush Goyal’s statement that the Indian economy is well-poised to take off and the government is committed to ensure economic growth. Traders took note of report that the Reserve Bank of India (RBI) has raised the investment limit for FPIs in government and corporate bonds to bring in more foreign funds into the market. Besides, in the fourth special open market operation (OMO) auctions, the RBI bought Rs 10,000 crore worth of long-term securities and sold Rs 2,950 crore worth of short-term government bonds.

On the global front, Asian markets were trading mixed on Friday after the World Health Organization or WHO said it is still too early to declare the coronavirus outbreak in China a global public health emergency. Nevertheless, investors are cautious amid worries over the rapid spread of the deadly virus. Japan's health ministry confirmed a second case of the coronavirus in the country. The death toll in China has now risen to 25, while the number of confirmed cases jumped to 830.

Back home, on the sectoral front, auto stocks were in focus as Investment Information and Credit Rating Agency (ICRA) said that demand for two-wheelers in the domestic market is likely to remain weak in the near-term on the back of implementation of BS-VI norms and it expects that the new norms will lead to contraction of volume by 8-10 per cent in FY20. In stocks specific development, ONGC edged up slightly after it received a total of 28 bids for 50 out of 64 small and marginal oil and gas fields in the first round of bidding. However, Infosys slid after market regulator SEBI said it would seek a forensic audit of the books of the IT major amid whistleblower allegations of alleged financial irregularities at the company.

The BSE Sensex is currently trading at 41408.18, up by 21.78 points or 0.05% after trading in a range of 41275.60 and 41420.92. 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 0.35%, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were consumer discretionary up by 0.71%, Auto up by 0.69%, Realty up by 0.66%, Consumer Durables up by 0.57% and Oil & Gas was up by 0.56%, while Power down by 0.53%, IT down by 0.46%, Telecom down by 0.43%, TECK down by 0.41% and Utilities was down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.10%, Titan Company up by 0.80%, Mahindra & Mahindra up by 0.67%, SBI up by 0.67% and Hindustan Unilever up by 0.66%. On the flip side, Power Grid Corpoartion down by 2.81%, Kotak Mahindra Bank down by 0.84%, TCS down by 0.70%, Infosys down by 0.54% and Tata Steel down by 0.31% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its fourth special open market operation (OMO) auctions has bought Rs 10,000 crore worth of long-term securities and sold Rs 2,950 crore worth of short-term government bonds. Earlier, the RBI had said it will simultaneously purchase and sell government securities under OMO of Rs 10,000 crore each.

In the OMO purchase auction, the RBI received bids worth Rs 26,887 crore for two types of securities -- 7.32 per cent-2024 and 6.45 per cent-2029 -- but accepted only Rs 10,000 crore of bids. For 7.32 per cent-2024, it got 157 bids and accepted 40 bids. The RBI got 147 bids for 6.45 per cent-2029 bonds but accepted 105 bids. The cut-off yield for 7.32 per cent-2024 was 6.408 per cent, while for 6.45 per cent-2029, it was 6.5780 per cent.

The RBI offered to sell two government securities -- 7.80 per cent-2021 and 7.94 per cent-2021 -- through the OMO. It received Rs 35,375 crore of bids but accepted Rs 2,950 crore of bids. In terms of number of bids, the central bank received 85 bids for 7.80 per cent-2021 and 70 bids for 7.94 per cent-2021 but accepted 3 and 7 bids, respectively. The cut-off yield for 7.80 per cent-2021 was 5.6714 per cent and for 7.94 per cent-2021 was 5.7192 per cent.

The CNX Nifty is currently trading at 12216.65, up by 36.30 points or 0.30% after trading in a range of 12149.65 and 12220.85. There were 37 stocks advancing against 12 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Yes Bank up by 4.03%, UPL up by 3.93%, Indian Oil Corporation up by 2.07%, Zee Entertainment up by 1.70% and Coal India up by 1.36%. On the flip side, Power Grid Corporation down by 2.75%, Bharti Infratel down by 0.60%, Cipla down by 0.47%, Bharti Airtel down by 0.45% and TCS down by 0.45% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 2.31 points or 0.01% to 23,793.13 and Jakarta Composite lost 1.69 points or 0.03% to 6,247.52. On the flip side, Straits Times advanced 6.35 points or 0.2% to 3,240.91 and Hang Seng was up by 40.52 points or 0.15% to 27,949.64.