Markets trade cautiously but in positive terrain

Indian markets are showing choppy trade on the final day of the month, while the Asian markets are mostly in green and the US markets ended higher overnight, the local markets are a bit cautious ahead of US President Donald Trump’s speech and more importantly from the domestic front the third quarter and the revised advance estimate for GDP growth in 2016-17. The Central Statistics Office (CSO) is slated to come up with its second official estimate of gross domestic product (GDP) growth later in the day for the financial year 2016/17 after factoring in demonetisation impact in the December quarter. The weak start of the rupee too was putting some pressure on the markets. However, the markets were getting support from Finance Minister Arun Jaitley’s statement and were managing to hold in green in early deals. Jaitley has said that India has potential to grow faster and plans are underway to reduce poverty and create jobs in rural areas. He also expressed his hopes that the GST would be implemented by July 1. Back on street, telecom sector was buzzing along with capital goods and realty, though losses in oil & gas and energy stocks were keeping the gains in check.

In scrip specific movement, Bharti Airtel was up by about one and half a percent after the country's biggest telecom company, unveiled plans to do away with roaming charges from April 1. Home data packs for customers will apply even while they roam across India.

The BSE Sensex is currently trading at 28843.77, up by 30.89 points or 0.11% after trading in a range of 28797.21 and 28876.54. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.41%, while Small cap index gained 0.55%.

The top gaining sectoral indices on the BSE were Telecom up by 0.80%, Capital Goods up by 0.61%, Realty up by 0.52%, Healthcare up by 0.50% and Consumer Disc up by 0.42%, while Oil & Gas down by 0.36%, Energy down by 0.33% and FMCG down by 0.22% were the few losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.76%, Adani Ports & SEZ up by 1.31%, Larsen & Toubro up by 1.07%, Cipla up by 1.07% and SBI up by 0.86%. On the flip side, Coal India down by 1.73%, Bajaj Auto down by 0.74%, Hindustan Unilever down by 0.72%, ITC down by 0.53% and Tata Motors down by 0.39% were the top losers.

Meanwhile, domestic ratings agency, India Ratings and Research (Ind-Ra) expects that the aggregate fiscal deficit of Indian states will increase only marginally to 3.3 percent of gross domestic product (GDP) in the fiscal 2017-18, though it has maintained its forecast of 3.2 percent for the fiscal 2016-17. The ratings agency also said that the aggregate state’s debt/GDP ratio may increase marginally to 24.3% in FY18 from 24% forecasted for FY17.

As per Ind-Ra estimate market borrowings of the states will increase to Rs 3.7 trillion from the 3.5 trillion in the ongoing fiscal 2016-17. However, as a percentage of GDP, states' net market borrowings is likely to moderate to 2.2 percent in FY18 from the forecast 2.3 percent for FY17. It further said that demand for petroleum products is expected to grow 9.5 percent in FY18 and states with a higher proportion of revenue from petroleum products in own tax revenue to benefit from the increase in crude oil prices. And the aggregate capital expenditure to GDP ratio of states is expected to remain stable at 3.4 percent in FY18, which is the same as in FY16 and FY17.

For the expenditure, Ind-Ra expects the aggregate capital expenditure/GDP ratio of states to remain stable at 3.4% in FY18, same as in FY16 and FY17 (FY15: 2.5%). Despite a salary revision, it expects select committed expenditure (in the form of salary, pension and interest payments)/current expenditure ratio to remain stable in FY18. Talking on the crucial indirect tax reform Goods and Services Tax, the agency said it expects an implementation by July 2017 and added that the proposed compensation of Rs 500 billion by the central government to state governments to cover revenue losses post tax implementation will be sufficient.

It further said that the central government is evaluating the report of the N. K. Singh panel on Fiscal Responsibility and Budget Management (FRBM), which allows the fiscal deficit of the central government to be increased by 0.5% of GDP. And added that once the report is accepted, states would also make suitable changes in the fiscal deficit targets specified under their FRBM Acts.

The CNX Nifty is currently trading at 8907.00, up by 10.30 points or 0.12% after trading in a range of 8891.80 and 8914.75. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 1.70%, Larsen & Toubro up by 1.34%, Tech Mahindra up by 1.31%, Adani Ports & SEZ up by 1.31% and Bharti Infratel up by 1.28%. On the flip side, Idea Cellular down by 2.79%, BPCL down by 2.40%, Coal India down by 1.71%, Hindustan Unilever down by 0.81% and Ambuja Cement down by 0.72% were the top losers.

The Asian markets were mostly in green, KOSPI Index was up by 7.5 points or 0.36% to 2,093.02, Shanghai Composite gained 9.08 points or 0.28% to 3,237.74, Jakarta Composite increased by 17.45 points or 0.32% to 5,400.32 and Nikkei 225 surged by 135.98 points or 0.71% to 19,243.45.

On the other hand, Hang Seng decreased by 14.55 points or 0.06% to 23,910.50 and FTSE Bursa Malaysia KLCI was tad lower by 0.26 points or 0.02% to 1,693.58.