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Indices pare some of gains in early noon session
May-22-2019

Markets pared some initial gains but continued to trade in green in early noon session amid buying in blue chip stocks from various sectors. Buying in Realty, Energy and Oil & Gas stocks helped markets to trade higher. Investors took encouragement with Organisation for Economic Co-operation and Development (OECD) latest Economic Outlook report which stated that the country’s economic growth will regain strength and approach 7.5% by 2020. The new income scheme for small farmers will support rural consumption. Investment growth will accelerate as capacity utilisation rises, interest rates decline, and geopolitical tensions and political uncertainty are assumed to wane. Meanwhile, United Nations (UN) in its World Economic Situation and Prospects (WESP) 2019 Mid-year Update report said that the India's economy is projected to grow at 7.1% in current financial year (FY20) on the back of strong domestic consumption and investment. It projected the economy will grow 7% in last financial year (FY19).

On the global front, Asian markets were trading mixed, amid worries about trade frictions between the world's two largest economies, the US and China. Back home, in scrip specific development, shares of ONGC edged up on the buzz of panning to ramp up production from 13 field development projects and three Enhanced Oil Recovery/Improved Oil Recovery (EOR/IOR) projects. In this regard, the company will spend around Rs 65,773 crore.

The BSE Sensex is currently trading at 39065.13, up by 95.33 points or 0.24% after trading in a range of 38903.87 and 39196.77. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.65%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were Realty up by 0.94%, Energy up by 0.93%, Oil & Gas up by 0.83%, Capital Goods up by 0.77% and Bankex was up by 0.43%, while FMCG down by 1.30%, Consumer Durables down by 0.51%, IT down by 0.41%, TECK down by 0.35% and Utilities was down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.24%, ICICI Bank up by 1.56%, Tata Motors - DVR up by 1.38%, ONGC up by 1.06% and HDFC was up by 1.04%. On the flip side, Indusind Bank down by 2.65%, ITC down by 2.51%, Yes Bank down by 2.27%, Hindustan Unilever down by 1.61% and TCS was down by 1.02% were the top losers.

Meanwhile, in order to fast-track India’s Gross Domestic Product (GDP) growth, Eminent Indian- American economist Arvind Panagariya has recommended that the new government must show strong commitment to fiscal consolidation, consolidate central ministries, go for aggressive privatisation of public sector undertakings (PSUs) and create a new international trade negotiation entity.

Eminent Indian- American economist has stated that the next government must show strong commitment to fiscal consolidation to ensure that private sector is not starved of investment funds. He also said that reducing the number of central ministries to 30 is another important thing that the new government would like to do to make it in line with international standards and improve the efficiency of the governance. Recommending privatisation of one PSU every week, he said this is feasible since over two-dozen PSUs already had a cabinet approval.

Panagariya also called for amending the Banking Regulation Act through an ordinance to allow the Reserve Bank of India (RBI) to restore its February 12, 2018 circular or equivalent, aimed at putting a lid on the future creation of non-performing assets (NPAs). He noted that accelerate cleaning up of NPAs and infuse capital into Public Sector Banks (PSBs) do ensure that healthy credit growth returns.  

The CNX Nifty is currently trading at 11727.10, up by 18.00 points or 0.15% after trading in a range of 11682.40 and 11760.65. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.03%, Sun Pharma up by 2.23%, ICICI Bank up by 1.67%, UPL up by 1.44% and Bajaj Auto was up by 1.14%. On the flip side, Indiabulls Housing down by 3.13%, Tech Mahindra down by 2.81%, Indusind Bank down by 2.76%, ITC down by 2.62% and Yes Bank was down by 2.30% were the top losers.

Asian markets were trading mixed; Taiwan Weighted dropped 2.43 points or 0.02% to 10,462.07, Jakarta Composite lost 19.24 points or 0.32% to 5,932.13, Shanghai Composite declined 14.95 points or 0.51% to 2,891.02 and Nikkei 225 was down by 4.34 points or 0.02% to 21,268.11.

On the other hand, KOSPI rose 3.73 points or 0.18% to 2,064.98, Straits Times advanced 4.43 points or 0.14% to 3,187.69 and Hang Seng was up by 10.14 points or 0.04% to 27,667.38.
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