Benchmarks pare gains; breadth strong

Key indices pared gains and traded with small gains in the mid-afternoon trade. The Nifty gave up 11,100-mark. At 14:24 IST, the barometer index, the S&P BSE Sensex, was up 63.46 points or 0.17% at 37,557.19. The Nifty 50 index was up 27.75 points or 0.25% at 11,085.6.

Broader market outperformed the main stock indices. The S&P BSE Small-Cap index was up 1.33%. The S&P BSE Mid-Cap index was up 0.6%.

The market breadth continued to be strong. On the BSE, 1576 shares rose and 832 shares fell. A total of 160 shares were unchanged

The Central Board of the Reserve Bank of India (RBI) announced to transfer a sum of Rs 1,76,051 crore to the Government comprising of Rs 1,23,414 crore of surplus for the year 2018-19 and Rs 52,637 crore of excess provisions. The RBI, in consultation with the Government of India, had constituted an Bimal Jalan committee to review the extant economic capital framework of the Reserve Bank of India. The announcement was made yesterday, 26 August 2019.

Zuari Agro Chemicals reported that it has resumed production of one of the NPK plants located at Zuarinagar, Goa. The plant was shut down for repair of tube leak of the PG-Reboiler in the CO2 removal section of Ammonia Plant, the plants could not be started, due to non-availability of gas supply. The production has been resumed with effect from 27 August 2019. On BSE, Zuari Agro was up 0.65% at Rs 100.60.

Bond rallied after RBI transferred surplus to the government. The yield on 10-year benchmark federal paper rose to 6.489% at 14:14 IST compared with 6.472% at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 71.76, compared with its close of 72.025 during the previous trading session.

In the commodities market, Brent crude for October 2019 settlement was up 27 cents at $58.97 a barrel. The contract fell 64 cents or 1.07% to settle at $58.7 a barrel in the previous trading session.

MCX Gold futures for 4 October 2019 settlement rose 0.12% at Rs 38,873.

Overseas, European stocks were trading lower. Meanwhile, the French President, Emmanuel Macron, on Monday, 26 August 2019, said that the United States and France has reached an agreement on the so called 3% "digital tax" levied on tech companies like Facebook, Amazon and Google. Earlier, US President Donald Trump threatened to hit the French economy by imposing a retaliatory tax on its French wine.

Asian markets closed marginally higher on signs of Sino-US trade hostilities easing. This helped to restore investor confidence after the previous session's rout.

US stocks rose on Monday, following a sharp sell-off in the prior session, after US President Donald Trump predicted a trade deal with China, cooling investor concerns after a ramp-up in rhetoric derailed markets last week.

Trump, under pressure to scale back a US-China trade war partly blamed for a global economic slowdown, claimed on August 26 that the two sides will begin serious negotiations soon.

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