Benchmarks manage to hold head above water

Indian benchmarks shredded their early morning gains, but managed to hold their crucial 41500 (Sensex) and 12200 (Nifty) levels. After opening in green territory, now markets are trading near neutral lines. Broader indices, BSE Mid cap and Small cap are also trading with marginal gains. Buying in frontline stocks such as Yes Bank, Tata Motors, Grasim Industries and BPCL kept the gains in the market. Traders’ mood remained up-beat as Reserve Bank of India reported that the banks credit and deposits grew at 7.13 percent and 9.91 percent to Rs 101.02 lakh crore and Rs 133.24 lakh crore, respectively, in the fortnight ended January 31, 2020. However, gains remain capped on report that the investments by alternative investment funds (AIFs) rose to over Rs 1.4 lakh crore in December quarter 2019, registering an increase of 53 per cent over the year-ago period. The investment made by AIFs was pegged at Rs 1,42,115.104 crore in the latest quarter, while in the year-ago period, the figure stood at Rs 92,825 crore. Sector wise, construction sector companies mostly trading in red with India Ratings has revised its outlook for the construction industry to negative for FY21 on the back of muted order inflows and subdued bank credit flow. Meanwhile, the gems and jewellery industry urged the government to reduce the import duty on gold, polished diamonds.

On the global front, Asian markets are trading mostly in green after an early sell-off, though Japan's benchmark declined as investors reacted to news of a growing number of cases of a new virus among the local population. Back home, in scrip specific development, Garware Technical Fibres shined on incorporating wholly owned subsidiary in Chile and BPCL gained on getting nod to divest shareholding in Numaligarh Refinery.

The BSE Sensex is currently trading at 41573.39, up by 113.60 points or 0.27% after trading in a range of 41510.19 and 41702.36. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.16%, while Small cap index was up by 0.38%.

The top gaining sectoral indices on the BSE were Telecom up by 0.90%, Basic Materials up by 0.89%, Auto up by 0.66%, Industrials up by 0.54% and TECK was up by 0.51%, while Utilities down by 0.39%, Power down by 0.31%, Energy down by 0.16% and Realty was down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.11%, Ultratech Cement up by 1.75%, Asian Paints up by 1.14%, Hero MotoCorp up by 1.12% and SBI up by 1.10%. On the flip side, ONGC down by 0.90%, Mahindra & Mahindra down by 0.61%, ITC down by 0.59%, Indusind Bank down by 0.49% and Reliance Industries down by 0.45% were the top losers.

Meanwhile, Union Textile Secretary Ravi Capoor has said that the Central government would address all issues in its new National Textile Policy which may be announced in a couple of months. Capoor said the policy will ensure basic raw materials availability at international price and encourage scale-up of operation by developing 10 mega textile parks with over 1,000 acres of land closer to the ports, among others.

He quoted, a statement from the Confederation of Indian Textile Industry (CITI), the new policy would address power cost, credit cost and its availability and expedite conclusion of the free trade agreements with EU, the UK and other countries to boost exports. He exhorted the textile industry, especially in Tamil Nadu, to diversify into polyester segment to boost exports.

The global textiles market of cotton and man-made fibre is in the ratio of 30:70 while it was the reverse in India. Of the total textile exports, cotton textiles accounted 80 per cent due to the price advantage of the home- grown cotton, while it is only 20 per cent in the man-made fibre segments due to the expensive raw material.

The CNX Nifty is currently trading at 12208.05, up by 33.40 points or 0.27% after trading in a range of 12190.15 and 12246.70. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 5.91%, Tata Motors up by 3.30%, BPCL up by 3.07%, Grasim Industries up by 2.27% and Bajaj Auto up by 1.99%. On the flip side, Eicher Motors down by 1.35%, ONGC down by 1.04%, Coal India down by 1.01%, Dr. Reddys Lab down by 0.96% and Mahindra & Mahindra down by 0.67% were the top losers.

Asian markets are trading mostly in green, Hang Seng increased 160.38 points or 0.58% to 27,890.38, Taiwan Weighted strengthened 21.97 points or 0.19% to 11,813.75, Shanghai Composite gained 15.18 points or 0.52% to 2,921.25, KOSPI rose 10.06 points or 0.45% to 2,243.02 and Straits Times advanced 4.00 points or 0.12% to 3,224.09. On the flip side, Jakarta Composite lost 3.40 points or 0.06% to 5,868.55 and Nikkei 225 slipped 150.09 points or 0.63% to 23,677.64.