Benchmarks erased early losses; starts trading in green

Indian equity markets erased early losses and were trading in green in the early noon session on account of buying in frontline blue chip stocks. The sentiment were getting some support with a private poll stating that India's economy will hum along at a solid pace for the remainder of this fiscal year provided structural reforms are passed, while above-target inflation means the Reserve Bank of India will only cut rates once more this year. Some support also came with a good monsoon season so far, raising hopes of a revival in farm output as well as income and on optimism over the GST bill’s passage. In scrip specific development, Bharat Financial Inclusion (erstwhile SKS Microfinance) surged over 6 per cent to hit a fresh 52-week high after the company logged a four-fold jump in June quarter profit.

On the global front, Asian market were down on Friday, as expectations of further stimulus following Britain's vote to leave the European Union were tempered by the European Central Bank's decision to keep its monetary policy intact.

The BSE Sensex is currently trading at 27687.17, down by 23.35 points or 0.08% after trading in a range of 27646.21 and 27764.19. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.66%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Power up by 1.16%, Capital Goods up by 0.86%, Realty up by 0.68%, Auto up by 0.44% and Oil & Gas up by 0.23%, while IT down by 0.44%, Bankex down by 0.22%, TECK down by 0.12% and FMCG down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid Corpn. up by 2.18%, GAIL India up by 1.51%, Tata Motors up by 1.04%, Larsen & Toubro up by 0.88% and Adani Ports &Special up by 0.72%. On the flip side, Bajaj Auto down by 1.13%, Hindustan Unilever down by 1.07%, Infosys down by 1.05%, Coal India down by 0.98% and Wipro down by 0.82% were the top losers.

Meanwhile, praising the government's 'long game' handling of the economy to push up growth potential while giving attention to immediate issues as well, International credit rating agency Standard & Poor's (S&P) has forecasted that India’s economy can grow at about 8% in the next two years.

S&P Global Ratings further said, that the prediction of 8% growth is based on the steady, ongoing structural reform push, including GST passage, a good monsoon season this year and a wise choice to head the Reserve Bank of India. S&P appreciated the government's attempts to spur growth, saying that the authorities also clearly have their eye on the 'long game' with reforms to boost growth  potential getting at least as much attention as short-term stimulus.'

Pointing to inflationary pressures the report said that Inflation has been drifting higher with global commodity prices. It also noted that India does not face any fiscal or external sector concerns, pointing out that even Brexit did not have a meaningful impact on external variables. It added that the structural reform drive continues to gain traction. Consumer confidence looks quite high and investor confidence seems buoyant. Any China wobbles will affect India less than most countries in the region.

The S&P’s 8% growth rate is way above the forecasts done by other international agencies, including International Monetary Fund and Asian Development Bank. IMF has forecast 7.4% growth for this fiscal, while ADB expects India to grow 7.4% this year and 7.8% in 2017-18.

The CNX Nifty is currently trading at 8507.90, down by 2.20 points or 0.03% after trading in a range of 8489.80 and 8525.40. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Power Grid Corpn. up by 2.55%, Bharti Infratel up by 2.10%, Idea Cellular up by 1.75%, Zee Entertainment up by 1.56% and GAIL India up by 1.46%. On the flip side, ACC down by 1.23%, Bajaj Auto down by 1.23%, Bosch down by 1.21%, Hindustan Unilever down by 1.08% and Infosys down by 1.00% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 decreased 227.81 points or 1.36% to 16,582.41, Hang Seng decreased 95.19 points or 0.43% to 21,905.30, Taiwan Weighted decreased 43.42 points or 0.48% to 9,013.14, Jakarta Composite decreased 36.08 points or 0.69% to 5,180.90, Shanghai Composite decreased 19.12 points or 0.63% to 3,019.89 and FTSE Bursa Malaysia KLCI decreased 1.38 points or 0.08% to 1,656.16. On the flip side, KOSPI Index increased 0.82 points or 0.04% to 2,013.04.