Markets snap two session losing run, SENSEX up 193 points

Snapping a two-session losing run, Indian equity benchmarks ended Tuesday’s trade on an optimistic note with gains of over half a per cent, on the back of a strong trend seen in other Asian markets. The markets had started the session on a strong footing, as traders took encouragement with the Commerce and Industry Minister Piyush Goyal’s statement that the use of artificial intelligence (AI) in different forms can help achieve the target of making India a US$5 trillion economy in the coming years. Traders remained optimistic with report that, with an aim to ensure expeditious resolution of financial stress, the Reserve Bank of India (RBI) has revised the Supervisory Action Framework (SAF) for urban cooperative banks (UCBs). The Apex bank will continue to monitor asset quality, profitability, and capital/net worth of UCBs under the revised SAF.

However, in late afternoon deals, key indices pared much of day’s gains, as market-men got anxious with a private report that India's government is likely to cut spending for the current fiscal by as much as Rs 2 lakh crore due to the issue of the biggest tax shortfalls in recent year. It added that Asia's third largest economy, which is growing at its slowest pace in over six years because of the lack of private investment, could be hurt further if the government cuts spending. Investors were also looking forward to the release of the first advance estimates of the GDP for FY20 by the government later in the day. The estimates will be eagerly watch over for, as the economic turmoil has taken a toll on growth numbers in the first and the second quarter.

On the global front, the Asian markets ended mostly higher on Tuesday while European markets were trading in green as concerns over a U.S.-Iran standoff eased. Back home, the renewable sector was in focus with Fitch Solutions, stating that the government’s proposed carbon tax waiver on coal may pose substantial downside risks to India's renewable sector growth. It noted that, in a bid to alleviate significant debt levels in the power industry, the government had proposed to waive carbon taxes on coal by Rs 400 per tonne. Besides, stocks related to the coffee sector were in focus after the Coffee Board indicated that coffee exports from India rose marginally to 3.50 lakh tonne in 2019 as compared to 3.48 lakh tonne in the previous year. India is the third-biggest manufacturer and exporter of coffee in Asia.

The BSE Sensex ended at 40,869.47, up by 192.84 points or 0.47 per cent, after trading in a range of 40,727.37 and 41,230.14. There were 21 stocks advancing against 9 stocks declining on the index. The broader indices ended in green; the BSE Mid cap index rose 0.69 per cent while Small cap index was up by 1.04 per cent.

The top gaining sectoral indices on the BSE were Realty, up by 1.98 per cent, Basic Materials, up by 1.56 per cent, Energy, up by 1.14 per cent, Metal, up by 0.77 per cent, and Industrials, up by 0.66 per cent. On the other hand, Telecom, down by 1.21 per cent, TECK, down by 0.36 per cent, and IT, down by 0.28 per cent, were the top losing indices on the BSE.

The top gainers on the Sensex were Ultratech Cement, up by 2.10 per cent, HDFC Bank, up by 1.59 per cent, Reliance Industries, up by 1.57 per cent, Sun Pharma, up by 1.47 per cent, and NTPC, up by 1.35 per cent.

On the flip side, Infosys, down by 1.48 per cent, ICICI Bank, down by 0.94 per cent, Bharti Airtel, down by 0.92 per cent, Nestle, down by 0.83 per cent, and Hero MotoCorp, down by 0.81 per cent, were the top losers.