Markets extend the gains with a positive start

Indian markets got a green start, extending their jubilation for the second day in row, taking cues from the rally in the global markets. Nifty reclaimed its crucial psychological level of 8500 in the very early trade. Though, there was some cautiousness too ahead of key macro data of Industrial Production and CPI inflation to be announced after the market hours that was keeping the gains in check. The general expectation is that Inflation for the month of June may see some downtick, but the food inflation may inch higher. On the same time, IIP is likely to see some contraction as indicated by weak core sector data. Back on street, the markets were getting some support with global rating agency Crisil's latest report that Indian economy is likely to grow at 7.9 percent in the current fiscal provided the country receives normal monsoon as it will boost agriculture growth and lift rural demand. The rating agency also expects the Reserve Bank of India to continue its accommodative monetary stance and cut the repo rate by another 25 bps this fiscal.

On the global front, the US markets surged overnight, while the Asian markets have extended their rally mood, led by the Japanese market which was heading for the steepest two-day climb since February after Prime Minister Shinzo Abe said he’ll order a fresh fiscal stimulus package.

On the sectoral front on BSE, all the indices barring IT and healthcare were trading in green. The IT companies were under pressure with the introduction of yet another legislation in the US seeking to prevent IT firms in India from hiring professionals on H-1B and L1 visas. In scrip specific movement, Coal India was down by around two percent after company’s board approved a proposal to buy back 1.72% of the state-run miner's shares for Rs 335 each, or Rs 3,650 crore in total. On the other hand, IndusInd Bank has bounced back and was up by about a percent on reporting a 26 per cent jump in its quarterly net profit to Rs 661 crore, as compared to Rs 525 crore in the corresponding period a year ago.

The BSE Sensex is currently trading at 27686.46, up by 59.77 points or 0.22% after trading in a range of 27667.81 and 27760.81. There were 16 stocks advancing against 13 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.39%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.17%, Metal up by 0.66%, Bankex up by 0.65%, Realty up by 0.58%, Power up by 0.52%, while IT down by 0.36% and TECK down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.55%, ICICI Bank up by 1.28%, NTPC up by 1.24%, Power Grid Corpn. up by 1.11% and Tata Steel up by 1.08%. On the flip side, Coal India down by 1.65%, TCS down by 0.94%, Cipla down by 0.83%, Sun Pharma Inds. down by 0.58% and Adani Ports & SEZ down by 0.44% were the top losers.

Meanwhile, the global ratings agency Crisil has said that India’s economy will grow at 7.9 percent in the current financial year compared with 7.6 percent in fiscal 2016, if the country receives normal monsoon as it will boost agriculture growth and lift rural demand and if the global situation does not worsen further.

Crisil in its latest report the Indian economy - Choosing trend over cycle - evaluated the quality of growth generated by the Narendra Modi-led government and said that if the rains are normal, it would give agriculture a one-time growth kick, particularly given the low-base effect of the two previous years that should lift sagging rural demand and extension to overall GDP growth.

The report further highlighted that the growth is slowly improving which is more sustainable unlike the 'rubber-band' recovery seen after the global financial crisis of 2008. Noting that the economy's modest recovery has been shaped by 'good luck' on crude oil and commodities, Crisil said the medium-term outlook will be shaped by progress on initiatives such as cleaning up of bank balance sheets and successful implementation of GST. Besides, financial inclusion through initiatives like Jan Dhan and digitisation, among others, will also potentially have a transformative impact on the economy's growth.

However, the report cautioned that the core physical infrastructure issues such as seamless availability of electricity, creation of road network and social aspects like health and education are crucial to sustaining growth and added that the current fiscal, therefore, will be closely watched for more reforms and relentless implementation of executive and policy actions already announce.

The CNX Nifty is currently trading at 8482.60, up by 14.70 points or 0.17% after trading in a range of 8480.65 and 8503.45. There were 28 stocks advancing against 22 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Hindalco up by 3.72%, Axis Bank up by 1.56%, ICICI Bank up by 1.32%, Grasim Industries up by 1.27% and Tata Steel up by 1.25%. On the flip side, Coal India down by 1.76%, Aurobindo Pharma down by 1.42%, Tata Power down by 1.15%, Cipla down by 1.11% and TCS down by 0.95% were the top losers.

The Asian markets were trading mostly in green, KOSPI Index was up by 1.14 points or 0.06% to 1,989.68, Taiwan Weighted gained 42.51 points or 0.48% to 8,828.98, Jakarta Composite was higher by 45.1 points or 0.89% to 5,114.12, Hang Seng added 105.27 points or 0.5% to 20,985.77 and Nikkei 225 surged by 439.73 points or 2.8% to 16,148.55

On the other hand, FTSE Bursa Malaysia KLCI declined by 4.17 points or 0.25% to 1,649.70 and Shanghai Composite was tad lower by 0.03 points to 2,994.89.