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Benchmarks trade slightly higher in early deals
Sep-20-2019

Indian equity benchmarks made optimistic start and are trading slightly higher in early deals on Friday. Gains in Bankex, Auto and Consumer Durables shares were offset by losses in Utilities, Power and PSU stocks. Investors were looking ahead to the outcome of the GST Council meeting. There are hopes that the government will take some key decisions such as rationalizing GST rates to boost growth. Traders took encouragement with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that there is room for rate cut as the growth has slowed down. The policy objective of the monetary policy is to maintain price stability, keeping in mind the objective of growth. Separately, Das expressed the hope that the ongoing crisis in Saudi Arabia that has spiked crude prices to multi-year highs will have limited impact on inflation and fiscal numbers. Though, upside remained capped with report that the Organisation for Economic Co-operation and Development (OECD) appears to be the most pessimistic on India's economy among think tanks, as it cut the GDP growth forecast by 1.3 percentage points to 5.9 per cent for 2019-20.

On the global front, most of the Asian markets trading in green as investors digested reports that the US and Chinese deputy trade negotiators have resumed face-to-face talks for the first time in almost two months on Thursday. Besides, the Ministry of Internal Affairs and Communications said that overall nationwide consumer prices in Japan were up just 0.3 percent on year in August. That was in line with expectations and slowing from 0.5 percent in July - moving further away from the Bank of Japan's target range of 2.0 percent. Core CPI, which excludes volatile food prices, rose an annual 0.5 percent - easing from 0.6 percent in the previous month.

Back home, IT hardware industry body MAIT said that India's foreign exchange bill is estimated to reach Rs 5.37 lakh crore by 2025 in absence of export-oriented manufacturing base of technology products. On the sectoral front, banking stocks were buzzing as credit rating agency Moody’s said that the increasing liquidity stress among real estate developers would indirectly hit Indian banks and is thus credit negative for the domestic lenders. Auto stocks were in focus amid hopes the GST Council may consider reducing tariffs on automobile to revive sagging growth. In scrip specific development, Zee Entertainment Enterprises (ZEE) fell over 10% on the BSE after promoter Subhash Chandra was asked by a court to not sell his unpledged stake in the company till next month.

The BSE Sensex is currently trading at 36194.09, up by 100.62 points or 0.28% after trading in a range of 36092.86 and 36250.43. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.27%, while Small cap index was down by 0.17%.

The top gaining sectoral indices on the BSE were Bankex up by 0.65%, Auto up by 0.65%, Consumer Durables up by 0.22% and Healthcare was up by 0.12%, while Utilities down by 1.23%, Power down by 1.14%, PSU down by 1.07%, Oil & Gas down by 0.85% and Realty was down by 0.69% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.03%, HDFC Bank up by 1.64%, Maruti Suzuki up by 1.48%, Mahindra & Mahindra up by 1.13% and Hero MotoCorp up by 0.94%. On the flip side, NTPC down by 2.05%, Power Grid Corporation down by 1.64%, ONGC down by 1.57%, Tata Motors down by 1.09% and SBI down by 0.68% were the top losers.

Meanwhile, expressing concern over India’s economic growth, the Organisation for Economic Co-operation and Development (OECD) in its latest economic outlook, analysis, and forecasts has slashed the country’s gross domestic product (GDP) growth forecast by 1.3 percentage points to 5.9 per cent for 2019-20 from 7.2 per cent projected earlier. For the next year, the OECD has projected the Indian economy to grow 6.3 per cent, bringing down its earlier forecast by 1.1 percentage points.

The OECD cut India's growth for FY20 following the latest data, which showed that the country's economy expanded by just 5 per cent in the first quarter of 2019-20, the lowest in over six years. It said GDP growth in India has proved surprisingly weak in the recent quarters with consumer spending having slowed and tight financial conditions restraining investments. It added that lower interest rates and stronger benefits from reform efforts should all help private sector demand to strengthen.

India is among seven countries whose economic growth projections are cut by the OECD by more than 0.6 percentage points. The other countries are Argentina, Brazil, Saudi Arabia, South Africa and Australia. On the global front, the policy forum said the trade war between the US and China has sent global growth momentum tumbling toward lows last seen during the financial crisis. The OECD predicted that the global economy will see its weakest growth since the 2008-2009 financial crisis, slowing from 3.6 per cent last year to 2.9 per cent this year; it predicted 3 per cent growth for the next year.

The CNX Nifty is currently trading at 10716.70, up by 11.90 points or 0.11% after trading in a range of 10691.00 and 10746.80. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 3.42%, Indiabulls Housing Finance up by 2.03%, HDFC Bank up by 1.52%, Adani Ports & SEZ up by 1.49% and Mahindra & Mahindra up by 1.36%. On the flip side, Zee Entertainment down by 9.16%, NTPC down by 1.93%, Power Grid Corporation down by 1.42%, ONGC down by 1.33% and Indian Oil Corporation down by 1.27% were the top losers.

Asian market were trading mostly in green; Nikkei 225 surged 78.84 points or 0.36% to 22,123.29, Taiwan Weighted strengthened 20.23 points or 0.19% to 10,914.93, KOSPI rose 10.10 points or 0.49% to 2,090.45, Hang Seng increased 8.16 points or 0.03% to 26,477.11, Shanghai Composite gained 5.20 points or 0.17% to 3,004.48 and Straits Times advanced 1.52 points or 0.05% to 3,160.32. On the flip side, Jakarta Composite was down by 25.31 points or 0.41% to 6,219.16.

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