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Benchmarks trim some gains in morning session
Feb-19-2020

Indian benchmarks trimmed some of their initial gains in morning session but continued their trade in green territory with the Sensex and Nifty gaining around half a percent each. Broader indices, BSE Mid cap and Small cap are also trading in green. Healthy buying was observed in blue-chip stocks like Bharti Infratel, Zee Entertainment, Nestle and Hindustan Unilever. Some mild weakness came as Moody's lowered growth forecast for the Asia-Pacific (Apac) region to 5.2% for 2020 citing the lingering impact of the coronavirus outbreak in China, the impact of which will be more pronounced on China and India. However, traders took some support with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that there is no reason to doubt that the government will be able to cut fiscal deficit to 3.5% of the GDP in the fiscal beginning April 1. Das said the Budget for 2020 had announcements that certain bonds will be opened up for non-resident investment without any limit. Sector wise, textile sector companies trading in green despite rating agency Ind-Ra revised the outlook on India’s textile sector to negative from stable for 2020-21 as weak domestic demand growth, threat of cheap imports and dwindling incentives and exports are likely to keep volumes muted.

Global cues also remained positive with most of the Asian markets are trading in green as hopes the deadly new coronavirus will have only a short-term impact on corporate earnings and economic growth prevailed. Back home, in scrip specific development, Alankit shined on getting IRDAI’s nod to acquire Alankit Insurance Brokers and HCL Technologies gained on planning to open Global Delivery Center in Hartford.

The BSE Sensex is currently trading at 41111.85, up by 217.47 points or 0.53% after trading in a range of 41048.93 and 41309.67. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.57%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.55%, Energy up by 1.43%, Telecom up by 1.08%, FMCG up by 0.82% and Metal was up by 0.77%, while Auto down by 0.83% and Capital Goods was down by 0.09% were the only losing indices on BSE.

The top gainers on the Sensex were Nestle up by 2.16%, Hindustan Unilever up by 1.92%, Reliance Industries up by 1.82%, NTPC up by 1.73% and Bajaj Finance up by 1.72%. On the flip side, Indusind Bank down by 1.91%, Maruti Suzuki down by 1.53%, Hero MotoCorp down by 0.97%, Power Grid Corporation down by 0.86% and Larsen & Toubro down by 0.44% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has thrown his weight behind Finance Minister Nirmala Sitharaman's budget numbers and said that he has no reason to doubt the government’s commitment to meet the fiscal deficit target of 3.5 per cent of GDP for 2020-21. Das stated the government has remained within the limits set by the Fiscal Responsibility and Budget Management (FRBM) Committee for the budget deficit. He said so, the excess fiscal deficit has been restricted to 0.5 per cent. The government has adhered to that and a large part of the financing of fiscal deficit next year will come from small savings.

The FRBM committee headed by N K Singh had recommended fiscal deficit to be cut to 2.8 per cent in 2020-21 fiscal and to 2.5 per cent by FY2023. The panel had suggested an 'escape clause' in case of overriding consideration of national security, acts of war, calamities of national proportion and collapse of agriculture severely affecting farm output and incomes. Under this, a deviation from the stipulated fiscal deficit target can be taken but not in excess of 0.5 percentage points in a year.

Sitharaman missed deficit target for the third year in a row, pushing shortfall to 3.8 per cent of the GDP in the current fiscal as compared to 3.3 per cent previously planned. The fiscal deficit target for the coming fiscal year starting April 1, has been fixed at 3.5 per cent. The fiscal deficit is the shortfall in a government's income compared with its spending. It essentially means that the government is spending beyond its means.

The CNX Nifty is currently trading at 12058.10, up by 65.60 points or 0.55% after trading in a range of 12042.10 and 12118.90. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 6.05%, Nestle up by 2.52%, Zee Entertainment up by 2.02%, Grasim Industries up by 1.93% and NTPC up by 1.82%. On the flip side, Tata Motors down by 4.83%, Yes Bank down by 2.00%, Indusind Bank down by 1.73%, Maruti Suzuki down by 1.64% and Hero MotoCorp down by 0.89% were the top losers.

Asian markets are trading mostly in green, Nikkei 225 surged 225.22 points or 0.97% to 23,419.02, Hang Seng increased 129.72 points or 0.47% to 27,659.92, Taiwan Weighted strengthened 110.48 points or 0.95% to 11,759.46, Jakarta Composite soared 30.71 points or 0.52% to 5,917.67, Straits Times advanced 21.84 points or 0.68% to 3,218.47 and Shanghai Composite gained 9.10 points or 0.3% to 2,994.07. On the flip side, KOSPI was down by 2.61 points or 0.12% to 2,206.27.
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