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Local equities continue to show positive trend
May-21-2019

Local equity benchmarks continued to show a positive trend in morning session due to increased buying by funds. Both, Sensex and Nifty were trading above their crucial 39,400 and 11,800 marks, respectively. Traders took note of a report that the next government should reduce corporate tax by 5%, should expand income support scheme, abolish the minimum support price (MSP) mechanism in the next three years and bring reforms in agriculture sector. Sentiments remained optimistic with IHS Markit report stating that India’s economic policy will continue to focus on maintaining strong economic growth and creating jobs for the country’s large and growing population. Investors also took note of former RBI Governor Bimal Jalan’s statement that Prime Minister Narendra Modi-led government has taken a number of reforms but more needs to be done by the next government on the implementation front to ensure job creation. Traders ignored a report that eminent Indian experts in the US believe that the next Indian government to be formed after the declaration of the election results on May 23 faces crucial foreign policy decisions, particularly in the economic realm.

On the global front, Asian markets were trading mostly in green, as a temporary reprieve in US-China trade tensions provided a breather. Back home, a private report stated that state-run electricity distribution companies (discoms) reported financial losses of Rs 21,658 crore at the end of FY19, up 4.4% year-on-year, reversing the declining trend since the UDAY scheme for these entities’ revival was launched in November 2015.

The BSE Sensex is currently trading at 39481.95, up by 129.28 points or 0.33% after trading in a range of 39328.26 and 39571.73. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.01%, while Small cap index was up by 0.04%.

The top gaining sectoral indices on the BSE were Energy up by 1.43%, Healthcare up by 1.10%, FMCG up by 0.36%, Telecom up by 0.27% and Consumer Durables was up by 0.26%, while Metal down by 1.30%, PSU down by 1.10%, Auto down by 1.02%, Industrials down by 0.80% and Oil & Gas was down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.92%, HDFC up by 2.13%, Sun Pharma up by 1.43%, Bajaj Finance up by 1.27% and ITC was up by 0.59%. On the flip side, Tata Motors down by 4.55%, Tata Motors - DVR down by 4.05%, IndusInd Bank down by 2.23%, Yes Bank down by 2.09% and Tata Steel was down by 1.71% were the top losers.

Meanwhile, Reserve Bank of India (RBI) in its latest data has showed that bank credit to infrastructure sector surged by 18.5 per cent to Rs 10.55 lakh crore as of 2018-19 (FY19), the highest since 2012-13 fiscal. Outstanding bank credit to the sector was Rs 8.91 lakh crore as at March 2018. In FY18 and FY17, growth in bank credit to the sector was negative at 1.7 per cent and 6.1 per cent, respectively. In the fiscal year ended March 2013, loans to infrastructure sector had grown by 15.83 per cent to Rs 7.29 lakh crore.

According to RBI data, bank loans to the overall industrial sector grew by 6.9 per cent to Rs 28.58 lakh crore in FY19. In FY18, loans to industries had grown by 0.7 per cent. Within infrastructure, bank loans to power sector had increased by 9.5 per cent to Rs 5.69 lakh crore compared to Rs 5.19 lakh crore in FY18. Roads sector witnessed a credit growth of 12.2 per cent to Rs 1.86 lakh crore as of end-March 2019.

Credit to telecommunications and other infrastructure (excluding roads, power and telecom) rose by 36.7 per cent and 53.5 per cent, respectively over FY18. Besides, in FY19, total bank credit rose 13.24 per cent and deposits grew by 10.03 per cent. This is the second consecutive double-digits credit growth after the same had declined to 4.54 per cent, which was the lowest since 1963.

The CNX Nifty is currently trading at 11846.70, up by 18.45 points or 0.16% after trading in a range of 11811.70 and 11883.55. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 4.21%, Dr. Reddys Lab up by 3.81%, Reliance Industries up by 2.65%, UPL up by 2.03% and Cipla was up by 2.00%. On the flip side, Tata Motors down by 4.97%, BPCL down by 4.40%, Adani Ports down by 3.15%, IndusInd Bank down by 2.92% and Indian Oil Corporation was down by 2.85% were the top losers.

Asian markets were trading mostly in green, Taiwan Weighted strengthened 68.60 points or 0.66% to 10,467.01, Jakarta Composite soared 55.58 points or 0.94% to 5,962.70, Shanghai Composite gained 43.62 points or 1.52% to 2,914.22, Hang Seng increased 28.73 points or 0.1% to 27,816.34 and KOSPI was up by 13.76 points or 0.67% to 2,069.47.

On the other side, Straits Times trembled 11.93 points or 0.37% to 3,193.53 and Nikkei 225 was down by 43.81 points or 0.21% to 21,257.92.
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