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Bourses erase gains as RBI keeps repo rate unchanged
Dec-05-2019

Key benchmark indices erased all gains and turned volatile in afternoon session, after the Reserve Bank of India kept the key policy rate unchanged at 5.15 percent and decided to continue with its accommodative stance to support the economy. Some concern also came as the Reserve Bank sharply lowered the growth forecast for the current financial year to 5 percent from the earlier estimate of 6.1 percent on account weak domestic and external demand. However, traders took some support as the Union Cabinet approved the launch of an exchange-traded fund (ETF) for bonds to create an additional source of funding for Central Public Sector Enterprises (CPSEs) and state-owned financial institutions. Finance Minister Nirmala Sitharaman has said that with the creation and launch of umbrella ETF the government hopes to diversify investor base. She emphasised that this is expected to eventually increase the size of bond ETFs in India, leading to achieving key objectives at a larger scale. On the sectoral front, Fertiliser sector remained in focus after Fertiliser Minister Sadananda Gowda said that the government is seriously considering options for decontrolling urea by either fixing a nutrient-based subsidy (NBS) rate or making direct payment of subsidy to farmers' account.

On the global front, Asian markets were trading mostly in green, on the possibility that China and the United States may soon seal a 'phase one' deal to end their 17-month trade war, but conflicting messages from U.S. President Donald Trump kept a lid on the advance. Back home, the BSE Sensex is currently trading at 40837.98, down by 12.31 points or 0.03% after trading in a range of 40730.58 and 41002.41. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.24%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.75%, IT up by 0.70%, Consumer Durables up by 0.60%, TECK up by 0.42% and Energy was up by 0.31%, while Telecom down by 1.67%, Metal down by 1.66%, Basic Materials down by 0.80%, PSU down by 0.79% and Healthcare was down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.43%, Larsen & Toubro up by 1.41%, ITC up by 0.99%, Tech Mahindra up by 0.86% and Reliance Industries was up by 0.76%. On the flip side, Yes Bank down by 1.90%, Sun Pharma down by 1.87%, Tata Steel down by 1.77%, Bharti Airtel down by 1.70% and Indusind Bank was down by 1.55% were the top losers.

Meanwhile, Fertiliser Minister Sadananda Gowda has said that the government is seriously considering options for decontrolling urea by either fixing a nutrient-based subsidy (NBS) rate or making direct payment of subsidy to farmers' account. In 2010, the government had launched the NBS programme under which a fixed amount of subsidy, decided on an annual basis, is provided on each grade of subsidised phosphatic and potassic (P&K) fertilizers, except for urea, based on the nutrient content present in them.

Gowda further said that the government is actively pursuing the issue of revision of fixed cost under urea policy. He also said that any change in policy should protect the interest of farmers, industry and help conserve resources. He stated that currently, urea is the only controlled fertilizer and is sold at a statutory notified uniform sale price and it is the most commonly used fertiliser because it is highly subsidised. Noting that the government is aware of the challenges faced by the industry, he said, however there are no short cut solutions to the structural problems but the government is working very hard to find possible way out.

The minister further said that as far as fertilizer policies and payments are concerned, the government is in continuous dialogue with all the stakeholders and various wings of the government. However, he said there is a need to keep in mind the government's fiscal limitation in order to balance sometimes the conflicting requirement and meet the expectation of all stakeholders. He also urged the industry to redefine the role of fertilisers industry by introducing newer forms of fertilisers and lauded efforts of cooperative fertiliser firm IFFCO in developing 'Nano fertilisers'.

The CNX Nifty is currently trading at 12046.20, up by 3.00 points or 0.02% after trading in a range of 12001.95 and 12081.20. There were 16 stocks advancing against 33 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Zee Entertainment up by 4.30%, Larsen & Toubro up by 1.56%, TCS up by 1.47%, ITC up by 1.11% and Indian Oil Corporation was up by 0.99%. On the flip side, Coal India down by 2.37%, JSW Steel down by 2.29%, Yes Bank down by 1.90%, Sun Pharma down by 1.85% and GAIL India was down by 1.83% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 164.86 points or 0.71% to 23,300.09, Hang Seng increased 136.18 points or 0.52% to 26,198.74, Taiwan Weighted strengthened 84.18 points or 0.73% to 11,594.65, Jakarta Composite soared 26.38 points or 0.43% to 6,139.26, Shanghai Composite gained 18.91 points or 0.66% to 2,897.03 and Straits Times was up by 15.04 points or 0.48% to 3,174.83.

On the flip side, KOSPI was up by 8.15 points or 0.39% to 2,060.74.

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