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Local equities trade marginally in green
Mar-19-2019

Local equity benchmarks are trading marginally in green in morning session, on account of buying in front line counters. Traders were seen piling positions in Telecom, Healthcare and PSU sector, while selling was witnessed in Industrials, Auto and Capital Goods sector stocks. Some comfort came with a report that the net direct tax collection figure has crossed the Rs 10 lakh crore mark as on March 16, helped by the fourth and final installment of tax payment. The entire advance tax data from across the country has not come yet. Traders took note of Commerce Minister Suresh Prabhu’s statement that India and Africa should examine if they can enter into a free trade agreement or preferential trade agreement. He added India’s exports of services and merchandise together would touch a record $540 billion in the current financial year ending March 31. However, gains remain capped with Niti Aayog CEO Amitabh Kant’s statement that India cannot achieve 9-10 per cent GDP growth without revolution in the farm sector. He said there is a need to boost investment in the agriculture sector as well as to introduce new technology and market reforms.

On the global front, Asian markets were trading mostly in red, ahead of a closely watched meeting by the US Federal Reserve set to kick off later in the day stateside. Back home, on the sectoral front, Realty industry stocks were in focus, as Goods and Services Tax (GST) Council on March 19, 2019 to consider the transition provisions for builders as the reduced GST rate for real-estate is coming into effect from April 1. The new rates would be accompanied with denial of input tax credit (ITC) to the developers and subject to purchase of certain portion of inputs from GST-registered dealers.

The BSE Sensex is currently trading at 38156.64, up by 61.57 points or 0.16% after trading in a range of 38078.23 and 38243.86. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.46%, while Small cap index was up by 0.37%.

The top gaining sectoral indices on the BSE were Telecom up by 1.72%, PSU up by 1.46%, Oil & Gas up by 1.01%, Healthcare up by 0.88% and Utilities was up by 0.65%, while Auto down by 0.86%, Capital Goods down by 0.76%, Industrials down by 0.37%, Consumer Disc down by 0.22% and IT was down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.72%, SBI up by 1.76%, Yes Bank up by 1.48%, Bharti Airtel up by 1.44% and Power Grid was up by 1.22%. On the flip side, Hero MotoCorp down by 2.14%, Bajaj Auto down by 1.80%, Larsen & Toubro down by 1.56%, TCS down by 0.77% and Mahindra & Mahindra was down by 0.63% were the top losers.

Meanwhile, ICRA, domestic rating agency, in its latest report has said that the information technology (IT) services sector is likely to register a growth of 7-9% in next financial year (FY20) mainly on account of demand for digital solutions.  It mentioned that the earlier small-scale proof of concept digital projects has started evolving into enterprise level larger implementations coupled with improvement in discretionary spend supporting future growth.

Besides, firming oil prices will lead to some discretionary spends by energy firms on digital spends and give the IT firms some good news, while retail is also showing improvement in the first nine months of FY19. From a profitability perspective, it stated that margins were flattish in the third quarter of FY19 on pricing pressure, increased regulatory costs, wage inflation and higher onshore hiring and sub-contracting cost necessitated by visa curbs. Moreover, it added there will be higher consolidation in the industry, especially among the small and mid-size players, owing to margin pressures in the next decade.

However, it underlined that the overall margins are estimated to decline to 20.8% in FY20 for its 19 sample companies from 22.5% in FY18.  Indian companies have started to ramp-up on-shore hiring in its largest market of US on visa issuance norms being tightened by restricting the entry-level programmers coupled with increasing compliance and evidence requirements adding to cost pressures.

The CNX Nifty is currently trading at 11470.55, up by 8.35 points or 0.07% after trading in a range of 11451.25 and 11501.50. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.49%, Bharti Infratel up by 3.35%, SBI up by 1.69%, Hindalco up by 1.45% and Bharti Airtel was up by 1.44%. On the flip side, Eicher Motors down by 2.77%, Hero MotoCorp down by 2.10%, Bajaj Auto down by 1.89%, Larsen & Toubro down by 1.74% and Adani Ports was down by 1.00% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 59.78 points or 0.2% to 29,349.23, Jakarta Composite dropped 30.47 points or 0.47% to 6,478.98, Nikkei 225 slipped 19.73 points or 0.09% to 21,564.77, Shanghai Composite declined 6.92 points or 0.22% to 3,089.50, Straits Times trembled 3.46 points or 0.11% to 3,209.50 and KOSPI was down by 2.77 points or 0.13% to 2,176.72. On the other hand, Taiwan Weighted was up by 4.28 points or 0.04% to 10,516.98.

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