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Bourses turn positive in afternoon deals
Feb-20-2020

Indian equities erased all losses to turn positive in afternoon session, on account of buying in Healthcare, Metal and Auto stocks. The sentiments turned optimistic as the Cabinet Committee on Economic Affairs (CCEA) approved a new central sector scheme ‘Formation and Promotion of Farmer Produce Organizations (FPOs)’ to form and promote 10,000 new FPOs in five years period from 2019-20 to 2023-24 with budgetary support of Rs 4,496 crore as part of its efforts to cut production cost and boost income of farming community. Traders also took support from Food and Consumer Affairs Minister Ram Vilas Paswan’s statement that the government will frame rules and set up an authority to implement the new Consumer Protection Act by April 2020. The law seeks to revamp the process of administration and settlement of consumer disputes, with strict penalties, including jail term for adulteration and misleading ads by firms. However, weak trend in Asian markets coupled with depreciation in rupee value against the dollar, weighed on the sentiments. On the sectoral front, Pharma stocks remained in focus as the Niti Aayog held a meeting with the captains of industry in the pharmaceutical sector to discuss the impact of disruption in supplies of active pharmaceutical ingredients (APIs) following the coronavirus outbreak in China.

On the global front, Asian markets were trading mostly in red, as virus cases rose in South Korea and Japan even as China added more stimulus via a rate cut to support its economy. Back home, the BSE Sensex is currently trading at 41363.54, up by 40.54 points or 0.10% after trading in a range of 41220.81 and 41399.93. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.93%, while Small cap index was up by 0.81%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.01%, Metal up by 0.98%, Basic Materials up by 0.84%, Auto up by 0.81% and Industrials up by 0.73%, while Consumer Durables down by 0.37%, Telecom down by 0.36%, Energy down by 0.34% and FMCG down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.90%, Tata Steel up by 2.59%, ONGC up by 1.87%, SBI up by 1.86% and Sun Pharma up by 1.60%. On the flip side, Hindustan Unilever down by 1.49%, Asian Paints down by 1.43%, Nestle down by 0.99%, Bharti Airtel down by 0.86% and Titan Company down by 0.59% were the top losers.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved a new central sector scheme ‘Formation and Promotion of Farmer Produce Organizations (FPOs)’ to form and promote 10,000 new FPOs in five years period from 2019-20 to 2023-24 with budgetary support of Rs 4,496 crore as part of its efforts to cut production cost and boost income of farming community.  Further, an amount of Rs 2,369 crore has been estimated for hand-holding of these FPOs during 2024-25 to 2027-28 period, taking the total size to Rs 6,865 crore.

The scheme also envisages a further committed liability of Rs 2,369 crore for 2024-25 to 2027-28 period towards hand-holding of each FPO for five years from its aggregation and formation, taking the total size to Rs 6,865 crore. There will be three implementing agencies to form and promote FPOs, namely Small Farmers Agri-business Consortium (SFAC), National Cooperative Development Corporation (NCDC) and National Bank for Agriculture and Rural Development (NABARD). States may also, if they desire, nominate their implementing agency in consultation with Union Agriculture Ministry. The scheme is likely to create 1.5 lakh jobs.

Small and marginal farmers do not have economic strength to apply production technology, services and marketing including value addition. Through formation of FPOs, farmers will have better collective strength for better access to quality input, technology, credit and better marketing access through economies of scale for better realization of income. Initially, the minimum number of members in FPO will be 300 in plain areas and 100 in North East and hilly areas. However, the minimum number of membership can be revised with approval of Union Agriculture Minister.

The CNX Nifty is currently trading at 12139.85, up by 13.95 points or 0.12% after trading in a range of 12092.80 and 12152.00. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 3.77%, Tata Steel up by 2.64%, Yes Bank up by 2.55%, Zee Entertainment up by 2.52% and ONGC up by 1.97%. On the flip side, Asian Paints down by 1.48%, Hindustan Unilever down by 1.42%, Cipla down by 1.15%, Nestle down by 1.10% and Indian Oil Corp. down by 1.01% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 53.29 points or 0.19% to 27,602.52, Taiwan Weighted dropped 33.75 points or 0.29% to 11,725.09, KOSPI fell 14.84 points or 0.67% to 2,195.50 and Straits Times trembled 13.54 points or 0.42% to 3,200.17.

On the flip side, Jakarta Composite soared 7.92 points or 0.13% to 5,936.71, Shanghai Composite gained 43.39 points or 1.46% to 3,018.79 and Nikkei 225 surged 78.45 points or 0.34% to 23,479.15.

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