Markets continue to trade firm in early noon session

After a flat opening, Indian equity benchmarks have gathered pace and continue to trade firm in early noon session due to increased buying by funds and investors driven by better than expected GDP data. The Nikkei/Markit India Manufacturing Purchasing Managers Index (PMI) - a composite indicator of manufacturing sector performance, stood at 50.7 in May as against 50.5 in April indicating an uptick in the manufacturing data. Sentiment got boost after the report that India’s GDP grew 7.9 per cent in the January-March quarter of 2015-16, taking the overall economic growth to a five-year high of 7.6 per cent for the entire fiscal. Sentiment was also buoyed as the production of eight core sectors jumped 8.5 per cent in April on the back of pick-up in output of refinery products, fertilisers, steel, cement and electricity.

In the overseas markets, Asian markets were trading mostly in red, after mixed reports on China's manufacturing activity indicated lingering weaknesses in the world's second-largest economy and U.S. consumer confidence dropped for a second month. Back home, in scrip specific development, share of Reliance Communications was trading higher after the foreign institutional investors (FII) bought nearly 1% stake in the company for about Rs 87 crore through open market.

RCom was up 5% at Rs 49.40 on the National Stock Exchange (NSE) in intra-day trade after the foreign institutional investors (FII) bought nearly 1% stake in Anil Ambani Group telecom company for about Rs 87 crore through open market.

The BSE Sensex is currently trading at 26753.08, up by 85.12 points or 0.32% after trading in a range of 26671.86 and 26857.25. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.05%, while Small cap index gained 0.42%.

The top gaining sectoral indices on the BSE were FMCG up by 1.17%, TECK up by 0.92%, IT up by 0.79%, Oil & Gas up by 0.22% and Consumer Durables up by 0.19%, while Metal down by 0.67%, Realty down by 0.64%, Bankex down by 0.57%, Capital Goods down by 0.19% and Power down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 3.17%, Asian Paints up by 2.60%, Bharti Airtel up by 2.08%, TCS up by 1.76% and ITC up by 1.61%. On the flip side, Tata Motors down by 1.15%, ICICI Bank down by 1.08%, SBI down by 0.63%, HDFC Bank down by 0.46% and Bajaj Auto down by 0.41% were the top losers.

Meanwhile, government validating its earlier claim has finally achieved the fiscal deficit target in FY16, the Centre’s fiscal deficit stood at Rs 5.32 lakh crore or 3.9% of GDP in FY16, marginally lower, about 99.5 per cent than the revised estimate (RE) of Rs 5.35 lakh crore, about 99.6 per cent for the same period a year before.

As per the provisional accounts for 2015-16 data released by Controller General of Accounts, the Fiscal Deficit in 2015-16 stood at 3.9% of GDP as estimated both in BE and RE of 2015-16. This is a significant improvement over the Fiscal Deficit of 4.1% in 2014-15 and 4.7% in 2013-14. Revenue Deficit also witnessed significant improvement due to increase in Capital Expenditure of the Central Government. Revenue Deficit which stood at 3.2% of GDP in 2013-14 improved to 2.9% in 2014-15 and 2.5% in 2015-16. The Capital expenditure has increased substantially to Rs 2,35,253 crore in 2015-16, which is an increase of Rs. 38,572 crore over 2014-15 and Rs.47,578 crore over 2013-14.

The Plan Expenditure in 2015-16 stood at Rs 4,71,081 crores, which are higher by Rs 8437 crores over the previous year despite substantial increase in share of tax devolution to the States. After transfers to states, the tax revenue stood at Rs 9.44 lakh crore or 99.7% of the RE in FY16. Total revenue stood at 12.4 lakh crore, or 99.2% of the RE of Rs 12.5 lakh crore. The total expenditure in the last fiscal year was 17.73 lakh crore or 99.3% of the RE.

The Gross tax collection at Rs 14,56,887 crore showed 17% growth, as compared to Fiscal 2014-15. The Gross tax collection has improved to 10.74% of GDP (tax-GDP ratio) in 2015-16 as compared to 10.06% in 2013-14. The devolution of tax collections to State Governments in 2015-16 stood at Rs 5,06,193 crore, showing an increase of Rs 1,68,385 crore over the devolution of Rs 3,37,808 crore in 2014-15. In 2013-14 the tax share devolution to the States was Rs 3,18,230 crore. Non Tax Receipts were Rs 2,50,744 crore this year, as compared to Rs 1,97,766 crore last year and Rs 1,98,865 crore in 2013-14.

The CNX Nifty is currently trading at 8183.85, up by 23.75 points or 0.29% after trading in a range of 8173.75 and 8215.35. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 3.30%, Asian Paints up by 2.80%, Bharti Infratel up by 2.44%, TCS up by 2.19% and Bharti Airtel up by 2.13%. On the flip side, Yes Bank down by 1.88%, Hindalco down by 1.76%, Tata Motors down by 1.46%, Bank of Baroda down by 1.33% and Tata Motors - DVR down by 1.05% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 313.13 points or 1.82% to 16,921.85, Hang Seng decreased 25.4 points or 0.12% to 20,789.69, FTSE Bursa Malaysia KLCI decreased 0.72 points or 0.04% to 1,625.28 and KOSPI Index decreased 0.68 points or 0.03% to 1,982.72, while Shanghai Composite increased 0.83 points or 0.03% to 2,917.44, Jakarta Composite increased 46.07 points or 0.96% to 4,842.94 and Taiwan Weighted increased 61.57 points or 0.72% to 8,597.16.