Markets trade higher in early deals

Indian equity benchmarks made slightly positive start and are trading with gains of over quarter a percent in early deals on Tuesday. A slew of upbeat earnings updates and falling oil prices helped the markets. Some support also came in as the government is planning to raise at least Rs 10,000 crore through the seventh tranche of CPSE ETF which will open for anchor investors on Thursday. Adding optimism a private report indicated that Finance Minister Nirmala Sitharaman's first full year Budget is expected to provide short-term stimulants to boost consumer demand, and such measures will get a positive response from markets. Besides, India pressed its largest LNG supplier Qatar to lower the price of gas under the existing long-term supply contracts, a request that Doha turned down saying sanctity of contracts is important for the credibility of both sides.

Though, upside remained capped amid sluggishness in global markets as all the Asian markets were trading in red, extending losses from the previous session amid concerns about the global economic impact of the fast-spreading Wuhan coronavirus. Health authorities in China said that the coronavirus outbreak has killed 106 people and infected more than 4,500 people. The virus has now spread to more than ten countries, including the US, France, Australia and Canada. On the economic front, the Bank of Japan said that producer prices in Japan were up 2.1 percent on year in December, in line with expectations and unchanged from the previous month. Producer prices were flat on month after adding 0.2 percent in November.

Back home, banking stocks were in focus as the Reserve Bank of India (RBI) stated that urban cooperative banks (UCBs) have reported nearly 1,000 cases of fraud worth more than Rs 220 crore in the last five fiscals. The central bank said a total of 181 fraud cases involving Rs 127.7 crore were noticed during 2018-19. In stock specific developments, HDFC rallied after its standalone quarterly profit jumped nearly four times. InterGlobe Aviation edged up after reporting over twofold jump in profit for the December quarter on higher revenue.

The BSE Sensex is currently trading at 41288.46, up by 133.34 points or 0.32% after trading in a range of 41101.51 and 41313.63. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.19%, while Small cap index was up by 0.53%.

The top gaining sectoral indices on the BSE were Auto up by 0.95%, Consumer Durables up by 0.61%, Consumer Discretionary up by 0.58%, Realty up by 0.47% and Bankex was up by 0.46% while, Telecom down by 0.77%, Metal down by 0.55%, TECK down by 0.36%, Power down by 0.35% and IT was down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.49%, Hero MotoCorp up by 2.00%, Mahindra & Mahindra up by 1.67%, Maruti Suzuki up by 0.91% and Sun Pharma Industries up by 0.83%. On the flip side, Power Grid Corporation down by 1.27%, Nestle down by 1.11%, Bharti Airtel down by 0.95%, Tech Mahindra down by 0.61% and HCL Tech down by 0.55% were the top losers.

Meanwhile, after receiving robust response for earlier stake sale, the government has decided to launch seventh tranche of Central Public Sector Enterprises (CPSE) Exchange Traded Fund (ETF) with base issue size of Rs 10,000 crore with a greenshoe option to retain a portion of the oversubscription. The issue will open for anchor investors on January 30 and for other institutional and retail investors, the next day-- Nippon Life India Asset Management -- which has been mandated to manage the CPSE ETF on behalf of the government. It added that the investors would get a 3% discount over the issue price.

The proceeds from the ETF will help the government meet its disinvestment target of Rs 1.05 lakh crore for the current financial year. It had aimed to garner Rs 85,000 crore through disinvestment in the preceding financial year. Besides, CPSE ETF runs a concentrated portfolio with a handful of stocks having weights of as high as 20% on the underlying index. The portfolio is concentrated towards the energy and oil sector.

Retail investors can invest a minimum of Rs 5,000, while non-institutional investors and qualified institutional buyers (other than anchor investors) can invest a minimum of Rs 2 lakh. The minimum investment for anchor investor is fixed at Rs 10 crore. Through the earlier six tranches of the CPSE ETF, the government has already raised about Rs 50,000 crore; Rs 3,000 crore from the first tranche in March 2014, Rs 6,000 crore in January 2017, Rs 2,500 crore from the third in March 2017, Rs 17,000 crore in November 2018 and Rs 10,000 crore in March 2019 and Rs 11,500 crore in July 2019.

The CNX Nifty is currently trading at 12150.60, up by 31.60 points or 0.26% after trading in a range of 12095.35 and 12159.30. There were 26 stocks advancing against 23 stocks declining on the index, while 1 stock remains unchanged on the index on the index.

The top gainers on Nifty were HDFC up by 2.48%, UPL up by 1.85%, Hero MotoCorp up by 1.77%, BPCL up by 1.61% and Mahindra & Mahindra up by 1.50%. On the flip side, Nestle down by 1.54%, Vedanta down by 1.48%, Power Grid Corporation down by 1.32%, JSW Steel down by 1.08% and Wipro down by 0.92% were the top losers.

Asian markets were trading in red; Nikkei 225 slipped 209.29 points or 0.9% to 23,134.22, Straits Times trembled 83.81 points or 2.59% to 3,156.21, KOSPI fell 74.13 points or 3.3% to 2,172.00 and Jakarta Composite was down by 61.82 points or 1.01% to 6,071.39.