Published on 24/01/2020 2:01:50 PM | Source: LKP Securities Ltd

Local bourses hold gains in afternoon deals - LKP Securities

Posted in Market Outlook| #Market Outlook #LKP Securities Ltd

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Local bourses hold gains in afternoon deals

The local barometer gauges held their gains in afternoon session, on the back of mostly positive trade in Asian equities coupled with sustained buying by domestic institutional investors. Traders took some solace with Union Commerce and Industry Minister Piyush Goyal’s statement that the Indian economy is well-poised to take off and the government is committed to ensure economic growth. However, further up move got restricted as anxiety remained among the local traders with a private report stating that government's tax revenue shortfall for FY20 is estimated to be at around Rs 2 lakh crore. As per the report, the revenue shortfall from direct tax sources is being pegged at around Rs 1.5 lakh crore to Rs 1.8 lakh crore, while that from indirect sources is estimated to be at around Rs 30,000 crore to Rs 60,000 crore. On the sectoral front, Oil & Gas stocks remained in focus as Oil Minister Dharmendra Pradhan said that India will see an investment of over Rs 4 lakh crore in development of gas supply and distribution infrastructure in the next five years as it chases the target of more than doubling the share of the environment-friendly fuel in its energy basket to 15 percent by 2030.

On the global front, Asian markets were trading mostly in green after the world’s health body called it a little too early to declare a coronavirus outbreak a global emergency. Back home, the BSE Sensex is currently trading at 41519.04, up by 132.64 points or 0.32% after trading in a range of 41275.60 and 41587.18. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.81%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Metal up by 1.21%, Capital Goods up by 1.11%, Consumer Discretionary Goods & Services up by 1.01%, Auto up by 0.91% and Consumer Durables was up by 0.90%, while Telecom down by 1.03%, IT down by 0.55% and TECK was down by 0.54% were the few losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.89%, HCL Tech. up by 1.57%, ONGC up by 1.49%, Axis Bank up by 1.40% and Larsen & Toubro was up by 1.40%. On the flip side, Power Grid down by 2.16%, Bharti Airtel down by 1.38%, Infosys down by 1.18%, TCS down by 0.68% and Reliance Industries was down by 0.10% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that the domestic two wheelers demand is likely to remain weak in the near-term on the back of implementation of BS-VI norms which is expected to further force a 10-12% increase in ownership cost, across segments. It observed that the industry is already facing several headwinds that have adversely impacted sales and the transition to new emission norms will further heighten the already subdued outlook.

According to the report, over the past couple of months, two-wheeler OEMs have started introducing BS-VI compliant variants in the market and ICRA’s analysis of new launches suggest that prices of 2Ws have risen by 10-12 per cent (on the ex-showroom basis). It pointed out that this sharp increase in prices is primarily because of a significant shift in the technology required to adhere to BS-VI requirements.

The rating agency has stated that as far as manufacturing of EFI system is concerned, as far as things stand, presently domestic manufacturing is limited. EFI system is being imported from prominent suppliers. Consequently, it said at the current levels of localization, cost differential of about 10-15 per cent have emerged in the EFI (BS-VI) Vs carburettor variants of the two-wheeler. However, it said given the scale of the Indian 2W market, auto ancillaries are expected to undertake phased localization of critical parts in the EFI system, which would subsequently bring down the cost of EFI systems as BS-VI gets implemented.

The CNX Nifty is currently trading at 12231.00, up by 50.65 points or 0.42% after trading in a range of 12149.65 and 12246.35. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 7.69%, JSW Steel up by 2.19%, NTPC up by 2.03%, Zee Entertainment up by 1.92% and Coal India up by 1.86%. On the flip side, Power Grid down by 2.53%, Bharti Airtel down by 1.29%, Infosys down by 1.12%, Cipla down by 0.57% and TCS down by 0.45% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 40.52 points or 0.15% to 27,949.64, Nikkei 225 surged 31.74 points or 0.13% to 23,827.18 and Straits Times was up by 5.46 points or 0.17% to 3,240.02. On the flip side, Jakarta Composite was down by 3.89 points or 0.06% to 6,245.32.



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