The benchmark indices continued to trade with modest gains in afternoon trade. At 13:23 IST, the barometer index, the S&P BSE Sensex, was up 134.87 points or 0.33% at 40,547.44. The Nifty 50 index was up 50.95 points or 0.43% at 11,961.10. However, the Nifty was trading below its 10-day and 20-day simple moving average place at 11974.60 and 11985.56, respectively.
The broader market traded higher. The S&P BSE Mid-Cap index was up 0.42%. The S&P BSE Small-Cap index advanced 0.43%.
The market breadth favored the buyers. On the BSE, 1255 shares rose and 967 shares fell. A total of 164 shares were unchanged. In Nifty 50 index, 37 stocks advanced while 13 stocks declined.
The sentiment was buoyed by multiple announcements by the Union Cabinet on Wednesday. Global cues were positive after the US Federal Reserve kept interest rates unchanged, as expected, at its policy meeting on Wednesday and signaled rate settings were likely to remain accommodative. Investors awaited the decision of the European Central Bank (ECB) along with slew of domestic data due today.
Data Releases Today:
India's industrial production (IIP) data for October 2019 will be announced on today. Industrial output in India dropped 4.3% year-on-year in September of 2019, following an upwardly revised 1.4% decline in August.
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The Manufacturing production data for October 2019 will also be announced today. Manufacturing Production in the country decreased 3.90% in September of 2019 over the same month in the previous year.
The Consumer Price Index (CPI) figures for November 2019 will also be unveiled today. India's retail price inflation rate climbed to 4.62% year-on-year in October 2019, the highest in over a year, from the previous month's 3.99%. Inflation rose above the Reserve Bank of India's medium-term target of 4% for the first time since July 2018, following recent cuts in interest rates.
Economy:
The Union Cabinet, chaired by the Prime Minister Narendra Modi, gave an approval for setting up Infrastructure Investment Trust and monetize National Highway Projects. The Cabinet gave an approval authorizing National Highways Authority of India (NHAI) to set up Infrastructure Investment Trust(s) (InvIT) as per InvIT Guidelines issued by SEBI. This will enable NHAI to monetize completed National Highways that have a toll collection track record of atleast one year and NHAI reserves the right to levy toll on the identified highway. This move will also attract patient capital (for say 20-30 years) to the Indian highway market, as these investors are averse to construction risk and are interested in investment in assets which provide long-term stable returns.
Further, the Cabinet approved the proposal to make amendments in the Insolvency and Bankruptcy Code, 2016 (code), through the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019. The amendments aim to remove certain difficulties being faced during insolvency resolution process to realise the objects of the code and to further ease doing of business. Amendments to the Code to remove bottlenecks, streamline the CIRP and protection of last mile funding will boost investment in financially distressed sectors. Additional thresholds introduced for Financial Creditors represented by an authorized representative due to large numbers in order to prevent frivolous triggering of Corporate Insolvency Resolution Process (CIRP).
The Cabinet also approved a partial credit guarantee scheme for public sector banks (PSBs) to purchase high-rated pooled assets from financially sound Non-Banking Financial Companies (NBFCs)/Housing Finance Companies (HFCs), with the amount of overall guarantee provided by government till the first loss of up to 10% of fair value of assets being purchased by banks or Rs 10,000 crore, whichever is lower. The scheme would cover NBFCs/HFCs that may have slipped into SMA-0 category during the one year period prior to 1 August 2018, and asset pools rated "BBB+" or higher.
Politics:
The Rajya Sabha on Wednesday approved the Citizenship (Amendment) Bill, completing the legislative procedure for giving Indian citizenship to non-Muslim migrants from Pakistan, Afghanistan and Bangladesh. The Bill was passed with 125 votes in favour and 105 against it. The Bill was passed by Lok Sabha on Monday. It will now go to the President for his assent.
Stocks in Spotlight:
Tata Consultancy Services rose 1.80% to Rs 2078. The IT major announced announced a new partnership with Flisa Smart Factory, part of the Finnish telecommunications company Elisa, to market and deploy the latter's industrial loT (lloT) and advanced analytics solutions to a wide range of manufacturers across the world.
Nestle India advanced 0.26% to Rs 14105. The goods and services tax (GST) profiteering watchdog imposed a penalty of Rs 90 crore on fast-moving consumer goods giant Nestle for not passing on the benefit of rate reduction to consumers. The national anti-profiteering authority (NAA) noted that the methodology adopted by Nestle to pass on GST rate-cut benefit was 'illogical, arbitrary, and illegal, which has resulted in unfairness and inequality while passing on the benefit of tax reduction'.
According to the anti-profiteering rules under GST, benefits of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices.
Ujjivan Small Finance Bank were trading at Rs 56, at a premium of 51.35% over the initial public offer price of Rs 37. The stock debuted at Rs 58, premium of 56.76% to IPO price. So far the stock hit a high of Rs 62.8 and low of Rs 53.1. On BSE, 1.37 crore shares were traded on the counter so far.
Shares of Reliance Industries were trading 0.15% lower at Rs 1560.10. RIL announced that its wholly owned subsidiary Reliance Strategic Business Ventures has acquired NowFloats for a cash consideration of Rs 141.63 crore. The said investment represents 85% holding of NowFloats. Nowfloats offers SaaS solutions to Small and Medium Enterprises (SMEs) that enable them to get a digital presence. Other solutions include local content discovery platform, online business management suite, website promotion / marketing solutions, and various other offerings for SMEs. It has operations in India.
Larsen & Toubro rose 1.27% to Rs 1279.65. L&T company won an order from Rail Vikas Nigam (RVNL) for the construction of Rishikesh - Karanprayag Tunnel in the state of Uttarakhand. The company classified the contract size in the range of Rs 1000 - 2500 crore.
Infosys fell 2.53% to Rs 702.55 after the Schall Law Firm, a US-based shareholder rights litigation firm, announced the filing of a class action lawsuit against Infosys in a US court.
According to the Complaint, Infosys made false and misleading statements to the market. Infosys used improper recognition of revenue to boost short-term profits. CEO Salil Parekh skipped standard reviews of large deals to avoid accounting scrutiny. In fact, the company's finance team was pressured to hide details of these deals and other accounting matters from auditors and the company's board of directors. Based on these facts, the company's public statements were false and materially misleading throughout the class period. When the market learned the truth about Infosys, investors suffered damages, the law firm said in a statement.
Maruti Suzuki India added 0.05% to Rs 6995.10. The company said it has partnered with Federal Bank to provide dealer finance and customised auto retail financing. In August 2019, Maruti Suzuki India had inducted Federal Bank as an approved partner for dealer inventory funding. The latest tie-up for retail financing to customers will further offer comprehensive loan access facilities to Maruti Suzuki dealers as well as customers.
Foreign Markets:
Markets in Europe opened higher while most Asian stocks continued to trade higher on Thursday after US Fed signalled rate settings were likely to remain accommodative but the imminent UK election and a deadline for Sino-US trade talks kept investors cautious.
ECB will announce its latest monetary policy decision on Thursday afternoon, marking a debut for new President Christine Lagarde. Investors will be watching closely for hints on future policy decisions and indications as to whether Lagarde will continue in the same vein as her predecessor, Mario Draghi.
Futher, in U.K., voters head to the polls on Thursday in the country's second general election since the landmark vote to leave the European Union in 2016. The election promises to be pivotal for the fate of Brexit and the country's economic policy.
In US, stocks closed slightly higher on Wednesday as investors digested a cautious message from the Federal Reserve, while continuing to monitor progress on China-US trade talks.
The U.S. central bank left interest rates unchanged on Wednesday, a decision that was largely anticipated capping a year where the Fed cut its benchmark rate three times. The central bank also indicated it does not expect any policy changes through at least 2020.
Meanwhile, US market is hoping for a delay on an increase in 15 December tariffs on some $160 billion of consumer goods from China.
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