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Benchmarks trade in green with marginal gains in early deals
Aug-20-2019

Indian equity benchmarks made cautious start and are trading higher with marginal gains in early deals on Tuesday. Gains in information technology, TECK and Utilities shares supported the markets, however weakness in Metal, Basic Materials and Bankex stocks kept the upside in check. Sentiments got some support with Finance Minister Nirmala Sitharaman’s statement that corporate tax rate for companies with over Rs 400 crore turnover will be gradually cut to 25% and the government will support wealth creators. Traders took note of a report that a top American lawmaker has urged the Trump Administration to resolve the trade tension with India as soon as possible, saying the dispute benefits none. However, upside remained capped with report that former Reserve Bank of India (RBI) Governor Raghuram Rajan has called slowdown in the economy very worrisome and said the government needs to fix the immediate problems in power and non-bank financial sectors and come out with a new set of reforms to energise private sector to invest. Traders were concerned with Care Ratings’ report that India's jobs scene -- with unemployment at a 45-year high -- is looking gloomy with hiring activity slowing across most sectors.

On the global front, all the Asian markets were trading in green, following gains on Wall Street, on improved risk appetite as the US Treasury yield curve is no longer flashing signs of a recession. Concerns surrounding the US-China trade dispute also eased somewhat after the United States allowed American companies to continue doing business with Chinese telecommunications giant Huawei for an additional 90 days.

Back home, in scrip specific development, Wipro gained on entering into strategic partnership with the Indian Institute of Science (IISc), India's premier public establishment for research and higher education in science and engineering, to conduct advanced applied research in autonomous systems, robotics and 5G space. KEC International jumped on securing orders of Rs 845 crore in the emerging Regional Rapid Transit System (RRTS) and Metro sectors in India. Meanwhile, Sterling & Wilson Solar will debut on the bourses today, August 20, 2019. As per the National Stock Exchange of India (NSE) data, the initial public offer (IPO) of Sterling & Wilson Solar received bids for 1.89 crore shares. The issue was subscribed 0.85 times.

The BSE Sensex is currently trading at 37474.52, up by 72.03 points or 0.19% after trading in a range of 37357.83 and 37511.55. There were 18 stocks advancing against 13 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 0.02%.

The top gaining sectoral indices on the BSE were IT up by 1.58%, TECK up by 1.38%, Utilities up by 0.47%, Auto up by 0.35% and Power was up by 0.26%, while Metal down by 0.79%, Basic Materials down by 0.59%, Bankex down by 0.41%, Energy down by 0.38% and PSU was down by 0.35% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.12%, TCS up by 1.49%, Hero MotoCorp up by 1.27%, Power Grid Corporation by 1.14% and HCL Technologies up by 1.03%. On the flip side, Yes Bank down by 4.69%, Bajaj Finance down by 1.16%, Axis Bank down by 1.02%, Indusind Bank down by 0.88% and Tata Steel down by 0.79% were the top losers.

Meanwhile, with an aim to support Indian wealth creators, Finance Minister Nirmala Sitharaman has said corporate tax rate will be gradually cut to 25 per cent for companies with an annual turnover of over Rs 400 crore. Though, she did not give a timeframe for the reduction. She said the corporate tax reduction for the rest of corporates would be gradual. She added that Indian wealth creator entrepreneurs will be given all kind of support.

She said ‘I would like to underline the fact that we are conscious of that the Indian entrepreneurs are the ones who have been the wealth creators, job creators of this country. We are proud of them and we shall keep supporting them. Every attempt of the government will be towards promoting them, to understand them and also to facilitate them.’ She added that ‘only 0.7 per cent is left … Even for them gradually, hopefully, in the long run, we will be able to bring down the tax to the level of 25 per cent.’

In her maiden Budget, she had cut corporate tax for companies with annual turnover of up to Rs 400 crore to 25 per cent from 30 per cent earlier. Earlier, the then Finance Minister Arun Jaitley had cut the corporate income tax rate to 25 per cent for companies with a turnover of up to Rs 250 crore.

The CNX Nifty is currently trading at 11056.45, up by 2.55 points or 0.02% after trading in a range of 11035.90 and 11076.30. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Infosys up by 2.01%, TCS up by 1.33%, Tech Mahindra up by 1.25%, Hero MotoCorp up by 1.24% and Wipro up by 1.23%. On the flip side, Yes Bank down by 4.44%, Indiabulls Housing Finance down by 3.56%, Ultratech Cement down by 1.88%, Britannia Industries down by 1.65% and Indian Oil Corporation down by 1.27% were the top losers.

All the Asian markets were trading in green; Nikkei 225 gained 98.63 points or 0.48% to 20,661.79, Straits Times strengthened 10.50 points or 0.34% to 3,138.95. Hang Seng gained 2.24 points or 0.01% to 26,294.08, Taiwan Weighted increased by 32.41 points or 0.31% to 10,521.16, Kospi advanced 15.84 points or 0.82% to 1,955.74, Jakarta Composite soared 0.89 points or 0.01% to 6,297.61 and Shanghai Composite was up by 2.07 points or 0.07% to 2,885.17.
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