Benchmarks continue firm trade on exit poll results

Indian equity benchmarks continued their firm trade in late morning session on account of buying in frontline blue chip counters. The buying was on account of the predictions of several exit polls, that was made public on Thursday, suggested that the Bharatiya Janata Party (BJP) will either comfortably cross the majority mark of 202 in the 403-seat UP Assembly, or come close to it. In other three states of Goa, Uttrakhand and Manipur too, some of the exit polls gave edge to BJP, with only setback likely to be Punjab where the ruling SAD-BJP combine was seen decimated by most of the exit poll results. Investors probably are now waiting for the actual results of the assembly elections that are set to be announced on Saturday. Traders were also eyeing the second leg of Budget session of the parliament where the Prime Minister Narendra Modi said he expects a breakthrough on Goods and Services Tax (GST) before the session concludes next month. The street took cautious approach with CRISIL report that a revival in private sector investment cycle is likely to be deferred to fiscal 2019 as there is ample headroom in capacity utilization, stretched balance sheets, and just a moderate pick-up in demand. In the next fiscal year ending March 2018, CRISIL predicts only a mild recovery due to an absence of fiscal and monetary stimuli and unsupportive global environment. Traders were seen piling position in Capital Goods, IT and TECK stocks, while selling was witnessed in Oil & Gas, Energy and Utilities sector stocks. In scrip specific development, Varun Beverages was trading in green on divesting 41 percent stake in Mozambique subsidiary, Varun Beverages Mozambique. Trident was trading in green after the ‘Cotton Egypt Association’ has accredited the company with its coveted ‘Gold Seal’ for its bed linen products. This is in addition to the same ‘Egyptian Gold Seal’ certificate received by the company in January this year for its yarn and terry towel portfolio.

On the global front, Asian shares were trading mostly in green, and the dollar rose to 1-1/2-month highs versus the yen ahead of the US non-farm payrolls report due later in the day. The People’s Bank of China (PBOC) said that China will not devalue its currency to stimulate exports. China’s exports for January and February combined rose 4.0 percent from the same period last year, while imports surged 26.4 percent, suggesting solid improvement in demand domestically and abroad. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,900 and 28,900 levels respectively. The market breadth on BSE was positive in the ratio of 1303:853, while 147 scrips remained unchanged.

The BSE Sensex is currently trading at 28977.31, up by 48.18 points or 0.17% after trading in a range of 28968.27 and 29076.63. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.07%, while Small cap index was up by 0.37%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.59%, IT up by 0.56%, TECK up by 0.48%, Industrials up by 0.36% and Realty up by 0.34%, while Oil & Gas down by 0.56%, Energy down by 0.37%, Utilities down by 0.25%, PSU down by 0.16% and Power down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.43%, Infosys up by 0.88%, Larsen & Toubro up by 0.68%, TCS up by 0.63% and HDFC up by 0.60%.

On the flip side, Power Grid down by 1.42%, GAIL India down by 0.78%, ONGC down by 0.50%, Maruti Suzuki down by 0.28% and Reliance Industries down by 0.26% were the top losers.

Meanwhile, domestic rating agency, ICRA in its latest report has said that higher oil and gold imports are likely to widen the current account deficit (CAD) to $30 billion or 1.2 percent of GDP in the fiscal 2017-18 from $20 billion or 0.9 percent of GDP in 2017, arresting the trend of moderation recorded for four consecutive years since fiscal 2014.  

According to the report, merchandise exports is likely to rise by 5-6 percent in 2017-18, partly led by higher value of commodity-intensive exports, global trends do not augur well for a significant improvement in the services trade surplus and remittances in FY18. It further said that since 2014, a combination of lower crude prices and a dip in gold imports had helped the country to absorb the impact of a decline in exports, services trade surplus or remittances. Though, it said that in the next financial year this cushion would not be available.

In the wake of the oil cartel OPEC’s decision to jack up crude prices by cutting production, the agency expects that the average crude oil price to go up to $55 per barrel in next financial year from $48 in 2017.  It also said that import volumes will rise 7 percent on the back of the domestic demand. It noted that with the expected rise in prices, the overall oil imports to increase 24 percent in fiscal 2018. As per the report, imports of fertilisers and fertiliser raw materials are likely to increase marginally to $5.4 billion in fiscal 2018 from $5.3 billion in 2017, while the cool-off in prices and decline in volumes will lead to a $1 billion decline in coal imports to $13.6 billion next fiscal.

The CNX Nifty is currently trading at 8941.85, up by 14.85 points or 0.17% after trading in a range of 8935.80 and 8975.70. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 1.23%, Hero MotoCorp up by 1.05%, Infosys up by 0.94%, Tata Power up by 0.79% and HCL Technologies up by 0.79%.

On the flip side, Power Grid down by 1.67%, Tech Mahindra down by 1.35%, BPCL down by 1.15%, Grasim Industries down by 1.04% and Hindalco down by 0.87% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 0.38 points or 0.01% to 3,217.13, KOSPI Index increased 6.41 points or 0.31% to 2,097.47, Hang Seng increased 9.86 points or 0.04% to 23,511.42 and Nikkei 225 increased 275.07 points or 1.42% to 19,593.65.

On the other hand, Taiwan Weighted decreased 30.77 points or 0.32% to 9,627.84, Jakarta Composite decreased 18.19 points or 0.34% to 5,384.20 and FTSE Bursa Malaysia KLCI decreased 1.99 points or 0.12% to 1,715.43.