Local stocks opened on a strong note after Finance Minister Nirmala Sitharaman announced rollback of FPI surcharge and a slew of measures to revive economy. The Sensex was currently trading below the psychological 37,000 level after hitting intraday high above that level in opening trade. Global stocks were weak on escalating US-China trade war.
At 9:23 IST, the barometer index, the S&P BSE Sensex, was up 257.72 points or 0.7% at 36,958.88. The Nifty 50 index was down 75.80 points or 0.7% at 10,905.15.
The S&P BSE Mid-Cap index was up 0.92%. The S&P BSE Small-Cap index was up 1.18%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On the BSE, 1015 shares rose and 229 shares fell. A total of 47 shares were unchanged.
Finance Minister Nirmala Sitharaman after market hours on Friday, 23 August 2019 said the government decided to withdraw the surcharge on foreign portfolio investors (FPIs), which she had unveiled in her budget for the fiscal year ending March 2020.
For the banking sector, FM announced upfront release of Rs 70,000 crore, additional lending and liquidity to the tune of about Rs 5 lakh crore by providing upfront capital to public sector banks. To boost infrastructure sector, FM announced Rs 100 lakh crores for developing modern infrastructure over 5 years.
Finance Minister Nirmala Sitharaman on Friday, 23 August 2019, announced multiple initiatives to help boost the beleaguered automobile sector. FM assured that BS IV vehicles purchased till 31 March 2020 will remain operational for entire period of registration. Sitharaman went on to speak about the proposed increase in one-time vehicle registration fee, saying that the proposal has been pushed back to June 2020. FM also approved higher depreciation for all vehicles. Sitharaman said that depreciation will be increased to 30% for all vehicles acquired during the period from now till 31 March 2020.
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To support to non-banking financial companies (NBFCs)/housing finance companies (HFCs), FM announced additional liquidity support to HFCs Rs 20,000 crore by NHB thereby increasing it to Rs 30,000 crore.
Meanwhile, Moody's Investors Service on Friday cut India's GDP growth forecast for 2019 calendar year to 6.2% from the previous estimation of 6.8%. For 2020 calendar year, it reduced the estimate by a similar measure to 6.7%. Moody's said that the weaker global economy has stunted Asian exports and the uncertain operating environment has weighed on investment.
Among stocks, GAIL (India) rose 1.06% after the company announced the launch of compressed natural gas (CNG) stations and a de-compression Unit for piped natural gas (PNG) supply in Jharkhand. The announcement was made after trading hours on Friday, 23 August 2019.
Alkem Laboratories rose 0.62%. Alkem Laboratories informed that USFDA had conducted inspections at the company's manufacturing facilities located at St. Louis, Fenton Park, USA from 16 August 2019 to 22 August, 2019 and Baddi, India from 19 August 2019 to 23 August 2019. At the end of the inspection, the company has received a Form 483 with four observations for the facility located at St. Louis, Fenton Park, USA and no Form 483 is received for the facility located at Baddi, India. The announcement was made after market hours on Friday, 23 August 2019.
IPCA Laboratories rose 0.26%. IPCA Laboratories informed that the USFDA conducted the inspection of the company's formulations manufacturing unit situated at Piparia (Silvassa) from 19 August 2019 to 23 August 2019. At the conclusion of the inspection, the USFDA issued a Form 483 with three observations. The announcement was made after market hours on Friday, 23 August 2019.
Lakshmi Vilas Bank surged 4.63%. Lakshmi Vilas Bank announced a board meeting on 28 August 2019, to consider and approve increase in authorised capital, fund raising through qualified institutional placement and fund raising by way of issuance of bonds. The announcement was made after market hours on Friday, 23 August 2019.
Overseas, Asian stocks were trading lower Monday following an escalation in the US-China trade war late last week.
US stocks ended sharply lower Friday as the US-China trade war intensified further, after President Donald Trump said he's ordering American companies to start looking for an alternative to China, while readying additional measures after Beijing imposed retaliatory tariffs on imports of US goods.
China announced new tariffs of 5% and 10% on $75 billion in U.S. imports, set to go into effect in two tranches, on Sept. 1 and Dec. 15, respectively. The Chinese government said that the move was in response to the Trump administration's plans to institute 10% tariffs on $300 billion in Chinese imports, also in two stages and on the same dates, announced earlier in August.
Federal Reserve Chairman Jerome Powell left the door open for another interest rate cut in September in a widely anticipated speech in Jackson Hole, Wyoming.
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