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Local equities continue to trade in green
Jan-17-2019

Local equity benchmarks continued their trade in positive territory in morning session with frontline gauges recapturing their crucial 10,900 (Nifty) and 36,350 (Sensex) levels. High beta indices like Oil & Gas and Realty were, as usual, inched higher with the up-move on the benchmarks. Traders took some encouragement with a report that Consumer Sentiment Index has rebounded in January on account of easing inflation, increasing liquidity and stabilising US-China trade war. India Primary Consumer Sentiment Index has risen over the previous month of November, signalling rising optimism going ahead. Some comfort also came with a report that in a bid to improve the ease of doing business, the Reserve Bank of India (RBI) announced a new framework for external commercial borrowings (ECB) and rupee denominated bonds. On the global front, Asian markets were trading mostly in green, following the positive cues overnight from Wall Street on upbeat corporate earnings results and news that British Prime Minister Theresa May's government survived a vote of no confidence in parliament.

Back home, Aviation industry stocks were on the side lines despite a report stated the aviation sector is going to be the growth engine for future progress and development. The civil aviation ministry anticipates that in the next two decades, air passenger traffic in India will grow to 1.12 billion passengers per year from the current 187 million passengers. Banking stocks were in focus as a report stated that the government decided to recapitalize state-owned Exim Bank to the tune of Rs 6,000 crore and double its authorised capital to Rs 20,000 crore. The equity will be infused in two tranches -- Rs 4,500 crore in 2018-19 and Rs 1,500 crore in 2019-20.

The BSE Sensex is currently trading at 36392.24, up by 70.95 points or 0.20% after trading in a range of 36364.64 and 36468.42. There were 18 stocks advancing against 12 stocks declining on the index, while 1 stock remain unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.17%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.87%, Energy up by 0.80%, Realty up by 0.57%, Consumer Durables up by 0.55% and Telecom was up by 0.49%, while Capital Goods down by 0.31%, and Industrials was down by 0.24% were the only losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.26%, Power Grid up by 1.07%, Maruti Suzuki up by 0.91%, Reliance Industries up by 0.87% and TCS was up by 0.85%. On the flip side, Yes Bank down by 3.00%, IndusInd Bank down by 0.91%, Bajaj Finance down by 0.77%, Infosys down by 0.64% and NTPC was down by 0.34% were the top losers.

Meanwhile, in order to increase the size of India's economy to $5 trillion by 2025, a working group of the Commerce and Industry Ministry has come out with a blueprint suggesting a bunch of lengthy and short-term measures. The group underlined that agriculture and manufacturing sectors can contribute $1 trillion each, while the contribution from the services sector has been pegged at $3 trillion. It said that India's potential to achieve a $5 trillion GDP by 2024-25 is within the realm of possibility.

The group identified specific policy recommendations for the three sectors such as agriculture, manufacturing and services sectors. For the agri sector, the report recommended encouraging public and private investments to develop infrastructure like cold chains; special attention for north-eastern, eastern and rain-fed states for augmenting scope of access to institutional credit; and rationalisation and targeting of input subsidies towards small and marginal farmers.

It has also suggested reform in land leasing laws to promote land consolidation and contract farming; and accelerating the pace of public investment in agriculture and ensure greater efficiency in capital use.  For manufacturing, it suggested a three-pillar strategy to achieve required expansion of output -- focus on existing high impact and emerging sectors as well as MSMEs.

It further suggested that a focus on champion services sectors like IT, tourism, medical value travel and legal would be required to achieve the expansion of the services sector output and concerted efforts need to be made to increase exports.  The recommendations for services sector include improving rail connectivity and seamless connectivity to major attractions; facilitating visa regime for medical travel; allowing expatriate professional to perform surgeries in identified hospitals; and e-commerce policy and regulatory framework for logistics segment.

A working group of the Commerce and Industry Ministry was constituted by the Department of Industrial Policy and Promotion (DIPP) in the ministry with participation from the government and industry. It was tasked to develop a roadmap towards achieving a $5 trillion economy by 2025.

The CNX Nifty is currently trading at 10912.05, up by 21.75 points or 0.20% after trading in a range of 10899.55 and 10929.25. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were HPCL up by 1.87%, GAIL India up by 1.54%, Bharti Infratel up by 1.45%, Grasim Industries up by 1.25% and Mahindra & Mahindra was up by 1.25%. On the flip side, Yes Bank down by 3.12%, Eicher Motors down by 0.90%, IndusInd Bank down by 0.83%, Bajaj Finserv down by 0.62% and Bajaj Finance was down by 0.61% were the top losers.

Asian market were trading mostly in green, Hang Seng increased 55.13 points or 0.2% to 26,957.23, Taiwan Weighted strengthened 35.44 points or 0.36% to 9,799.25, Jakarta Composite soared 31.50 points or 0.49% to 6,444.86, Shanghai Composite gained 11.77 points or 0.46% to 2,582.19 and KOSPI was up by 2.23 points or 0.11% to 2,108.33.

On the other hand, Straits Times trembled 6.19 points or 0.19% to 3,222.92 and Nikkei 225 was down by 28.62 points or 0.14% to 20,414.13.
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