Markets trade higher ahead of Economic Survey

Indian equity benchmarks made slightly positive start and are trading higher in early deals on Friday ahead of the start of the budget session in the Parliament. Finance Minister Nirmala Sitharaman will table the Economic Survey 2019-20 in parliament later in the day and the Union Budget tomorrow. More than 2 percent fall in oil prices on Thursday aided domestic sentiments. Investors were also keeping an eye on the economic data like core sector data which will be out later in the day. Some support came in with report that the government is aiming at $80 billion of jewellery exports in the next five years from the present level of $40 billion. The Centre also expects the jewellery industry to generate additional employment of 2 million. Traders took note of Niti Aayog vice-chairman Rajiv Kumar’s statement that the government should focus on alternate measures to stimulate economy as it is not possible to give fiscal stimulus. Kumar also said growth-enhancing measures are the need of the hour to achieve India’s potential growth rate of 7-8 per cent per annum.

On the global front, Asian markets were trading mixed following the positive cues overnight from Wall Street after the World Health Organization declared the coronavirus outbreak a global health emergency, but did not recommend measures restricting international trade or travel. The international agency noted that China was doing everything it could to contain the outbreak. Investors also digested China's official manufacturing data that met expectations. Chinese manufacturing activity was unchanged from the previous month in January. The official manufacturing Purchasing Managers’ Index (PMI) came in at 50, said China’s National Bureau of Statistics.

Back home, aviation stocks were in focus with credit rating agency ICRA’s statement that the domestic airline industry is expected to post a net loss of about Rs 7,800 crore in fiscal 2020 as against an estimated net loss of approximately Rs 10,000 crore in fiscal 2019. In stock specific developments, Kotak Mahindra Bank was the top gainer in the Sensex pack, rallying over 4%, after private sector lender said it will withdraw a case concerning dilution of promoters’ shareholding in the bank which it had filed against the RBI in the Bombay High Court. However, Tata Motors tumbled over 3% despite reporting consolidated net profit of Rs 1,755.88 crore in Q3 December 2019 against a net loss of Rs 26,960.80 crore in Q3 December 2018.

The BSE Sensex is currently trading at 41106.66, up by 192.84 points or 0.47% after trading in a range of 40995.32 and 41154.49. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.11%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Bankex up by 1.17%, Telecom up by 1.11%, Realty up by 0.77%, Consumer Durables up by 0.74% and Consumer discretionary was up by 0.66%, while Power down by 1.34%, Utilities down by 1.15%, PSU down by 0.94%, Oil & Gas down by 0.90% and Metal was down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 4.66%, Indusind Bank up by 2.59%, Bajaj Auto up by 2.28%, Mahindra & Mahindra up by 1.53% and Hero MotoCorp up by 1.16%. On the flip side, Power Grid Corpoartion down by 3.29%, ONGC down by 3.11%, NTPC down by 1.45%, HCL Technologies down by 0.86% and Sun Pharma Industries down by 0.32% were the top losers.

Meanwhile, in order to boost slowing economy without bothering too much about fiscal deficit, Niti Aayog Vice-Chairman Rajiv Kumar has said that the government should focus on alternate measures to stimulate economy as it is not possible to give fiscal stimulus. He also said growth-enhancing measures are the need of the hour to achieve India's potential growth rate of 7-8 per cent per annum. He attributed the current slowdown to low investment, muted consumption expenditure and lagging exports.

However, he said the government's ability to finance a large stimulus is admittedly constrained. Therefore, attention will have to be on alternate measures to stimulate a recovery. He noted that some green shoots of recovery are now visible with the Purchasing Managers' Index (PMI) for both manufacturing and services showing a smart rise to above 52, which signifies expansion. He also said there have already been plenty of measures taken by the government in the recent past, including the decision to lower corporate tax rates in September 2019.

Noting that growth, equity and sustainability can no longer be viewed as mutually exclusive, Kumar said ‘we cannot achieve one goal while neglecting the other two’. He added that ‘our policy design should always have these three principle goals that are also enshrined in the Sustainable Development Goals (SDGs) or the Global Agenda 2030, for the achievement of which, all UN members have given their unequivocal commitment.’ Meanwhile, the Indian economy had seen growth rate decline in each of the past five quarters, falling to over six-year low of 4.5 per cent in July-September 2019.

The CNX Nifty is currently trading at 12050.70, up by 14.90 points or 0.12% after trading in a range of 12038.85 and 12103.55. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 4.06%, Bajaj Auto up by 2.24%, Indusind Bank up by 2.02%, Zee Entertainment up by 1.21% and Mahindra & Mahindra up by 1.17%. On the flip side, ONGC down by 3.11%, Tata Motors down by 3.06%, Power Grid Corporation down by 2.93%, Indian Oil Corporation down by 2.65% and Coal India down by 2.34% were the top losers. 

Asian markets were trading mixed; Taiwan Weighted strengthened 114.05 points or 1% to 11,535.79, Hang Seng increased 57.95 points or 0.22% to 26,507.08 and Nikkei 225 surged 234.01 points or 1.02% to 23,211.76. On the flip side, KOSPI fell 3.56 points or 0.17% to 2,144.44, Jakarta Composite lost 82.49 points or 1.36% to 5,975.11 and Straits Times was down by 6.91 points or 0.22% to 3,163.77.