Benchmarks trade in fine fettle in early deals; Sensex regains 28,100 mark

Indian equity benchmarks started F&O series expiry session on optimistic note and are trading in fine fettle in early deals with Sensex recapturing its crucial 28,100 mark, as the Union Cabinet approved changes in the GST Constitutional Amendment Bill providing for full compensation to states for first five years of roll out of the new indirect tax regime, taking it a step closer to reality. Traders also took some encouragement with global rating agency Crisil’s report that India’s GDP growth could rise to 7.9 per cent because of good monsoon so far, with agriculture expected to grow by 4 per cent and consumer price inflation likely to be restricted to 5 per cent in 2016-2017. Some support also came with report that foreign institutional investors were net buyers in equities worth Rs 405 crore on Wednesday, as per provisional stock exchange data.

On the global front, all the regional peers were trading in red at this point of time, as investors remained cautious about a potential stimulus package from the country’s government, while in China, worries about a possible clampdown on wealth management products weighed on buying interest. The US markets once again showed a lackluster trade and ended mixed in last session, after the Federal Reserve announced its widely expected decision to maintain the target range for the federal funds rate at quarter to half a percent.

The BSE Sensex is currently trading at 28120.80, up by 96.47 points or 0.34% after trading in a range of 28064.90 and 28144.32. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.33%, while Small cap index up by 0.67%.

The top gaining sectoral indices on the BSE were Consumer Discretionary Goods & Services up by 1.28%, Realty up by 1.26%, Telecom up by 1.12%, Consumer Durables up by 0.61% and Auto up by 0.45%, while IT down by 0.17%, Capital Goods down by 0.05% and Metal down by 0.03% were the few losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 8.17%, Maruti Suzuki up by 1.49%, Coal India up by 1.09%, Power Grid up by 1.07% and Dr. Reddy's Lab up by 0.92%. On the flip side, Tata Steel down by 1.32%, Infosys down by 0.78%, Larsen & Toubro down by 0.53%, Hindustan Unilever down by 0.40% and HDFC down by 0.34% were the top losers.

Meanwhile, rating agency CRISIL in its latest report has pegged India’s economic growth at 7.9 per cent in the current fiscal year, assuming a good monsoon. It expects agriculture to grow by 4 per cent and consumer price inflation to be restricted to 5 per cent in 2016-2017. However, it also cautioned that stress in rainfall in certain parts of the country and excess downpour in some other regions may be a cause for worry. Sub-normal monsoons have taken a toll on agricultural production in the last two fiscals and Agriculture GDP growth averaged 0.4% in the last two fiscals, much below the long-term trend of 3%. Crisil has developed a Deficient Rainfall Impact Parameter (DRIP) index, which measures the impact of rainfall levels on each crop across geographic regions

Crisil further stated that despite a slow start in June, rains have caught up and were just 1 per cent below normal as of July 25. This has helped reservoirs to bounce back from the lows seen in the beginning of the fiscal, boosting farmers' confidence. It added that due to good monsoon, backed by favourable temporal and spatial distribution, agriculture growth can surge to six per cent from a weak base of last year and, therefore, push up GDP growth. On inflation, it expects ample kharif production to boost supply and bring down food inflation. This will help offset sticky services inflation and higher crude oil prices.

The report said it does appear that the farm sector will perform well this year and help the economy in two ways -- keep prices under control and provide higher incomes to the farmers. Accordingly the rural consumption is expected to revive, pushing up private consumption which will raise capacity utilisation and kick-start the investment cycle by the end of this fiscal. CRISIL estimates consumption-oriented sectors to gain, especially as rural demand soars. These include automobiles, particularly two-wheelers, and consumer durables. On the inflation front, it expects ample kharif production to boost supply and bring down food inflation. This will help offset sticky services inflation and higher crude oil prices.

The CNX Nifty is currently trading at 8640.60, up by 24.80 points or 0.29% after trading in a range of 8626.35 and 8648.65. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 8.34%, Bharti Infratel up by 3.21%, Eicher Motors up by 1.66%, Maruti Suzuki up by 1.47% and Idea Cellular up by 1.41%. On the flip side, Tech Mahindra down by 2.25%, Tata Steel down by 1.35%, Tata Motors - DVR down by 0.88%, Aurobindo Pharma down by 0.68% and Infosys down by 0.62% were the top losers.

All the Asian markets were trading in red; Nikkei 225 declined 168.62 points or 1.01% to 16,496.20, Hang Seng decreased 95.66 points or 0.43% to 22,123.33, Taiwan Weighted slipped 20.21 points or 0.22% to 9,043.18, Shanghai Composite fell 18.41 points or 0.62% to 2,973.59, KOSPI Index shed 9.17 points or 0.45% to 2,015.88, FTSE Bursa Malaysia KLCI dropped 8.57 points or 0.52% to 1,654.99 and Jakarta Composite was down by 6.84 points or 0.13% to 5,267.52.