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Barometer gauges trade in green in early noon session
Mar-20-2019

Indian stock markets were trading in green terrain in early noon session with Sensex and Nifty gaining of 66 and 6 points respectively. Realty sector witnessed the maximum gains in trade followed by IT and TECK sectors. Investors’ mood was positive as the GST Council has allowed builders to choose between the old and new GST regimes for projects that will remain unfinished as on March 31, removing the fear among these firms that they might lose accumulated input tax credit for under-construction projects. Some support also came as the government has given a major relief to startups by enhancing definition of startups. It has decided to relax angel tax norms for startups, including increasing the investment limit to Rs 25 crore for availing income tax concessions by startups. Currently, startups avail tax concession only if total investment, including funding from angel investors, does not exceed Rs 10 crore. However, gains remained limited as economists raised concerns over a sharp slowdown in the Indian economy and pitched for a monetary policy boost to support growth at a meeting with the RBI chief on March 19. RBI governor Shaktikanta Das met more than a dozen economists to get their views on the economy ahead of the Monetary Policy Committee (MPC) decision due on April 4.

On the global front, Asian markets are trading mixed as global markets shift their attention to a rate decision by the Federal Reserve and to reports that trade negotiations between the US and China are becoming more tense. Back home, in scrip specific development, Intellect Design Arena surged as the company has launched Wealth Qube - 2020, a state of the art end-to-end Relationship Manager centric solution for the wealth management institutions.

The BSE Sensex is currently trading at 38429.53, up by 66.06 points or 0.17% after trading in a range of 38316.21 and 38476.01. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index lost 0.01%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were Realty up by 1.64%, IT up by 1.47%, TECK up by 1.05%, Capital Goods up by 0.97% and Industrials was up by 0.48%, while Oil & Gas down by 1.60%, PSU down by 1.17%, Utilities down by 0.93%, Power down by 0.60%, Auto was down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.56%, Larsen & Toubro up by 1.57%, HCL Technologies up by 1.19%, Vedanta up by 0.75% and HDFC was up by 0.62%. On the flip side, NTPC down by 2.74%, ONGC down by 2.29%, Bajaj Auto down by 1.36%, Coal India down by 1.30% and Kotak Mahindra Bank was down by 0.92% were the top losers.

Meanwhile, Reserve Bank of India (RBI) governor Shakthikanta Das has stated the recent decision to inject rupee liquidity through long-term foreign exchange swap has received quite well response from market. In an unprecedented move, the Central Bank on March 13 announced a US dollar/rupee buy/sell swap auction worth $5 billion on March 26 to inject rupee liquidity for longer duration. This is first time that such a tool has been deployed by the RBI, which has been normally using OMOs to inject liquidity into the system. But the targeted liquidity will reach the system only next fiscal year when the government starts spending.

Under the buy/sell forex swap, a bank will sell dollars to the RBI and simultaneously agree to buy the same amount of dollars at the end of the swap period, which in this case is three years, and the additional liquidity flowing into the system can support credit growth and soften bond yields. The auction will begin on March 26, 2049 and will run up to March 28, 2022, which means the instrument has a three-year tenor with no liability on the RBI unlike in the 2013 when the then governor Raghuram Rajan allowed banks to mop up $ 30 billion through NRI deposits offering them to cover their hedging risks.

However, Das parried a query whether the scheme will be repeated if the maiden attempt is successful. The central bank statement on March 13 also said the dollar amount mobilised through the auction will reflect in the forex reserves for the tenor of the swap, and also reflect in RBI's forward dollar liabilities. This means that the forex kitty, which is $402 billion now, will swell by $5 billion and similar will be the jump in the central bank's forward sell position.

The CNX Nifty is currently trading at 11538.30, up by 5.90 points or 0.05% after trading in a range of 11511.50 and 11556.10. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 3.53%, Infosys up by 2.46%, Hindalco up by 2.10%, Wipro up by 1.92% and Dr. Reddys Lab was up by 1.47%. On the flip side, HPCL down by 4.64%, Zee Entertainment down by 4.05%, BPCL down by 3.65%, Indian Oil Corporation down by 3.29% and NTPC was down by 2.71% were the top losers.

Asian markets were trading mixed; KOSPI fell 7.55 points or 0.35% to 2,170.07, Straits Times trembled 16.92 points or 0.53% to 3,204.00, Shanghai Composite declined 25.36 points or 0.82% to 3,065.62, Hang Seng decreased 116.08 points or 0.39% to 29,350.20 and Nikkei 225 was up by 38.22 points or 0.18% to 21,605.07.

On the other hand, Jakarta Composite soared 4.33 points or 0.07% to 6,484.61 and Taiwan Weighted was up by 42.97 points or 0.41% to 10,555.29.

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