Markets trade higher buoyed by buying in heavy weights

Indian equity markets continued to trade higher in late afternoon session buoyed by gains in HDFC bank, ICICI bank and Eternal. Besides, bargain hunters opted to buy fundamentally good stocks at lower levels following the recent pull back. Further, investors remained optimistic after Union Commerce and Industry Minister Piyush Goyal indicated that India remains a key destination for overseas investments and is likely to attract $100 billion in foreign direct investments (FDIs) from the four-nation European bloc EFTA, membered by Iceland, Liechtenstein, Norway, and Switzerland. The free trade agreement between India and the EFTA will be implemented from October 1. Meanwhile, gains remained capped as traders seek more clues on bilateral trade deal between India and US after both countries concluded the fifth round of talks for the proposed bilateral trade agreement. 

On the global front, Asian equity markets were trading mostly in green despite of People's Bank of China maintaining its interest rates unchanged as the economy faces subdued domestic demand amid challenging global economic conditions. European equity markets were trading mostly in green as EU leaders prepare for a high-stakes showdown over U.S. tariff threats.

Back home, oil and gas stocks came under pressure, reflected in BSE Oil & Gas declining 0.84%, after EU imposed sanctions on Nayara refinery. Further, Global Trade Research Initiative (GTRI) indicated that India's petroleum product exports worth $15 billion to the European Union (EU) may be at risk as Brussels moves to restrict imports of Russian crude oil refined in third countries. 

The BSE Sensex is currently trading at 82001.84, up by 244.11 points or 0.30% after trading in a range of 81518.66 and 82161.55. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index gained 0.42%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.13%, Bankex up by 1.07%, Metal up by 0.91%, Industrials up by 0.77% and Basic Materials up by 0.61%, while Energy down by 1.35%, Oil & Gas down by 0.84%, FMCG down by 0.55%, IT down by 0.49%, TECK down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Eternal up by 3.23%, ICICI Bank up by 2.54%, HDFC Bank up by 1.85%, Mahindra & Mahindra up by 1.18% and Larsen & Toubro up by 0.99%. On the flip side, Reliance Industries down by 3.43%, HCL Technologies down by 1.26%, Hindustan Unilever down by 1.06%, TCS down by 1.03% and ITC down by 0.80% were the top losers.

Meanwhile, former RBI Governor Raghuram Rajan has said that India needs to be ‘very careful and clever’ while negotiating trade agreements with the US, especially with regard to the agriculture sector, which is heavily subsidised by developed countries. He said ‘I think where it is much more sort of difficult (trade negotiations) is in areas such as agriculture, where every country subsidises its producers, and our producers may be relatively smaller, may have somewhat lower subsidies--unconstrained flow of agricultural products into the country may create problems for them.’

Noting that the trade tensions are negative for both in terms of exports as well as investment, Former RBI Governor said ‘but you must remember that there are opportunities also in what is happening to the extent that India is perceived as an alternative route to some of the other regions like the United States.’ According to him, if the tariffs imposed by the US on China and some other parts of Asia are much higher than tariffs on India, there may be an opportunity for some manufacturing to flow to India. While pointing out that Indian exports in manufacturing to the United States are not that big, he said any kind of tariffs (on India) will have some modest dampening effect, but not a lot.

He said India’s economic growth has sort of settled in the range of 6-7 per cent, and a fraction of percentage point may be affected by the global trade uncertainties. He said but in the longer term, this would spell opportunity for India. 

The CNX Nifty is currently trading at 25027.85, up by 59.45 points or 0.24% after trading in a range of 24882.30 and 25079.50. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Eternal up by 3.38%, ICICI Bank up by 2.60%, HDFC Bank up by 1.86%, HDFC Life Insurance up by 1.55% and Mahindra & Mahindra up by 1.34%. On the flip side, Reliance Industries down by 3.43%, Wipro down by 2.58%, Indusind Bank down by 2.16%, Eicher Motors down by 1.39% and HCL Technologies down by 1.29% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 168.48 points or 0.67% to 24,994.14, Jakarta Composite gained 91.85 points or 1.24% to 7,403.77, KOSPI increased 22.74 points or 0.71% to 3,210.81, Straits Times rose 14.96 points or 0.36% to 4,204.46 and Shanghai Composite strengthened 25.31 points or 0.71% to 3,559.79, while Taiwan Weighted lost 42.57 points or 0.18% to 23,340.56.

European markets were trading mostly in green; UK’s FTSE 100 increased 2.89 points or 0.03% to 8,995.01 and Germany’s DAX gained 2.56 points or 0.01% to 24,292.07, while France’s CAC fell 14.85 points or 0.19% to 7,807.82.