Benchmarks trim gains; trade continues in green

Indian benchmark indices pared gains but continued their firm trade in the late morning session as investors lacked conviction to pile up fresh positions. Sentiments got some support with Finance minister Arun Jaitley’s stament that India's economic growth could surge to 8.5%, especially if the monsoon is as bountiful as forecast, adding that he hopes interest rates will fall further as prices trend lower. Besides, a firm trend in other Asian markets following a strong performance on Wall Street and rebound in oil prices, added to the optimistic sentiments. Some support also came with the report that Indian business leaders continue to be the most optimistic lot globally about the country’s economic outlook for the second consecutive quarter owing to a strong GDP growth, recent policy announcements and regulatory changes. According to the Grant Thornton International Business Report (IBR) a quarterly global survey of 2,500 business leaders across 36 economies, 90% of the respondents in India expressed confidence in the country's economic outlook. However, markets participants remained cautious as RBI Governor Raghuram Rajan talking on euphoria about India being the world's fastest-growing economy has said that India still remains one of the poorest nations in the world on a per capita basis and have a long way to go before we reasonably address the concerns of each one of our citizens. Meanwhile, Public sector banks led rally in banking sector stocks on reports that the Reserve Bank of India (RBI) has trimmed the list of debt-laden companies for loan provisioning in the fourth quarter ended March 31, 2016.

On the global front, Asian markets reached a 5-month high on Thursday as global crude oil prices cruised higher on lower-than-expected US crude oil inventory levels and renewed hopes that oil producers might meet once again to reduce production. Japanese stocks edged higher after the yen resumed a weakening trend against the US dollar, while China shares rose despite a tug-of-war between rising spirits over fresh liquidity and disappointment over a signal that authorities could pull back from monetary stimulus. Meanwhile, US stocks edged closer to their record closing highs to end firm on Wednesday buoyed by a rally in crude oil prices and encourging data on US home resales for March which was higher than expected.

Back home, stocks from Banking, PSU and Consumer Durables counters were supporting the markets’ uptrend, while those from Realty, FMCG and Information Technology (IT) counters were adding to the underlying cautious undertone. In scrip specific development, shares of Stone India have rallied after the company bagged an order for supply & installation of 9090 units of Bio-Toilets to Government of Chattisgarh valuing Rs 28.70 crore. On the other hand, Wipro has dipped after the company reported a flat consolidated net profit at Rs 2,235 crore against average analyst’s estimate of Rs 2,354 crore for the quarter ended March 2016 (Q4FY16).

The market breadth on BSE was positive, out of 2154 stocks traded, 1068 stocks advanced, while 976 stocks declined on the BSE.

The BSE Sensex is currently trading at 25959.35, up by 115.17 points or 0.45% after trading in a range of 25925.12 and 26080.07. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index was down by 0.07%, while Small cap index up by 0.04%.

The gaining sectoral indices on the BSE were Bankex up by 2.36%, PSU up by 1.24%, Consumer Durables up by 0.85%, Oil & Gas up by 0.78% and Auto up by 0.32%, while Realty down by 0.75%, FMCG down by 0.70%, TECK down by 0.70%, IT down by 0.59% and Power down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 6.26%, SBI up by 3.98%, Axis Bank up by 2.34%, Tata Motors up by 1.94% and ONGC up by 1.72%. On the flip side, Wipro down by 6.26%, BHEL down by 1.54%, Hero MotoCorp down by 1.41%, ITC down by 1.34% and Bharti Airtel down by 1.23% were the top losers.

Meanwhile, with an aim to help in doubling of exports to the Lain American nation in near future, the Cabinet, chaired by Prime Minister Narendra Modi has given its approval for the expansion of the Preferential Trade Agreement (PTA) between India and Chile.

Under the expansion of the PTA, Chile has offered concessions to India on 1,798 tariff lines with Margin of Preference (MoP) ranging from 30-100 per cent, with India reciprocating on 1,031 tariff lines with MoP at 10-100 per cent. Under the proposed expanded PTA, 86 per cent of India's exports to Chile will get covered with concessions, which is likely to result in doubling of India’s exports in future.

PTA between both the countries was signed in March 2006 and came into effect from August 2007. In 2006-07, Chile was ranked 51st export destination for India when the bilateral trade was $2.3 billion. The dynamics changed after the PTA came into force from September 2007, pushing up the growth figure to 58.5 per cent between 2006-07 to 2014-15.  During 2014-15, the trade came in at $3.65 billion, with exports at $0.57 billion and imports at $3.08 billion, respectively.

India's export basket with Chile is diversified and further keeping a view the wide variety of tariff lines offered by Chile, the expanded PTA would immensely benefit India. Chile has been cooperating with India at various International fora and this expansion of PTA will enhance the trade and economic relations between the two countries.

The CNX Nifty is currently trading at 7943.55, up by 28.80 points or 0.36% after trading in a range of 7930.00 and 7978.45. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 6.28%, Bank of Baroda up by 5.18%, SBI up by 3.95%, Axis Bank up by 2.23% and Tata Motors up by 1.95%. On the flip side, Wipro down by 6.25%, Bharti Infratel down by 3.02%, BHEL down by 1.62%, ITC down by 1.51% and Hero MotoCorp down by 1.29% were the top losers.

Asian markets were trading in green, FTSE Bursa Malaysia KLCI was up by 0.36%, Shanghai Composite up by 0.27%, KOSPI Index up by 0.64%, Jakarta Composite up by 0.54%, Taiwan Weighted up by 0.38%, Hang Seng up by by 1.66% and Nikkei 225 was up by 2.44%.