Markets near the neutral line; Sensex breaks into green

The Indian markets after trying hard are near the neutral line, while the Sensex has entered into green, the Nifty is slightly behind the line in the late morning session, though the major bourses are struggling to get a foothold in the day’s trade so far. Apart from the geopolitical worries emanating from Korea, traders were concerned about the domestic developments too, where credit growth has plunged to a whopping six-decade low of 5.08 percent in the financial year 2016-17, as against 10.7 percent a year ago.  Meanwhile, the industry body Assocham has said that the term 'e-commerce' may get misinterpreted in the Goods and Services Tax (GST) law and the government must clearly outline the scope of 'e-commerce' under the GST, as the current definition can include even commodity derivatives exchanges where there is no actual delivery of goods. Back on street, while the broader markets are holding their gains some of the sectoral indices, like technology, telecom and IT are witnessing cuts of over half a percent. On the other hand, realty led by the Indiabulls Real Estate was surging ahead, restricting any sharp fall in the markets. Non sectoral gauge of oil marketing companies too were in jubilant mood trading up by 0.50-1.50 percent, after the price of petrol were hiked by Rs 1.39 per litre and diesel by Rs 1.04 a litre in sync with firming international rates.

The BSE Sensex is currently trading at 29474.95, up by 13.50 points or 0.05% after trading in a range of 29363.28 and 29490.26. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were outperforming the benchmarks and were trading with gains of over quarter percent; the BSE Mid cap index was up by 0.29%, while Small cap index up by 0.32%.

The top gaining sectoral indices on the BSE were Realty up by 2.71%, Oil & Gas up by 0.96%, Utilities up by 0.76%, Consumer Durables up by 0.73%, Energy up by 0.60%, while Telecom down by 0.55%, TECK down by 0.37%, FMCG down by 0.31%, IT down by 0.28%, Metal down by 0.19% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 2.31%, GAIL India up by 2.20%, Adani Ports & SEZ up by 1.65%, Power Grid up by 1.40% and HDFC up by 1.08%. On the flip side, Sun Pharma down by 1.81%, Asian Paints down by 1.16%, NTPC down by 0.97%, Mahindra & Mahindra down by 0.79% and TCS down by 0.72% were the top losers.

Meanwhile, global credit rating agency Moody's Investors Services in its latest report has said that India’s credit profile would improve and debt burden would also lower over time if it effectively implemented the fiscal discipline within a framework consistent with the Fiscal Responsibility and Budget Management’s (FRBM) recommendation and set up a fiscal council as suggested by the FRBM committee.

Moody’s Investors Service India sovereign analyst William Foster has said that the recommendations offer a medium-term framework that focuses on fiscal consolidation, while targeting India’s debt-to-GDP ratio as a fiscal anchor. The FRBM panel, chaired by former Revenue Secretary N.K. Singh, has recommended that India’s fiscal deficit, which is the difference between expenditure and receipts, should be brought down to 2.5 per cent by 2022-23 as compared to 3.5 per cent in the financial year 2016-17. It also suggested bringing down the Centre’s debt-GDP ratio to 40 per cent by 2023 from 49 per cent at present.  Rating agencies have often red flagged high debt-GDP ratio of India.

Currently, Moody’s has a ‘Baa3’ rating on India with a positive outlook, indicating the country is a relatively low-risk bond or investment market. India has been trying to raise its credit rating with economic reforms such as the Goods and Service Tax Bill, labour reforms, Bankruptcy Act and more. Besides, a higher credit rating will attract more investments into the market.

The CNX Nifty is currently trading at 9149.75, down by 1.05 points or 0.01% after trading in a range of 9120.25 and 9160.00. There were 22 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 2.31%, GAIL India up by 1.98%, Grasim Industries up by 1.61%, Adani Ports & SEZ up by 1.58% and Indian Oil Corp. up by 1.56%. On the flip side, Bharti Infratel down by 2.87%, Sun Pharma down by 1.76%, Asian Paints down by 1.30%, Tech Mahindra down by 1.08% and Hindalco down by 1.06% were the top losers.

Most of the Asian markets were trading in red, Shanghai Composite was down by 42.74 points or 1.32% to 3,203.32, Nikkei 225 declined by 29.44 points or 0.16% to 18,306.19, Taiwan Weighted was lower by 12.79 points or 0.13% to 9,720.14 and Jakarta Composite was down by 12.27 points or 0.22% to 5,604.28.

On the other hand, FTSE Bursa Malaysia KLCI was up by 3.84 points or 0.22% to 1,734.83, KOSPI Index increased 12.21 points or 0.57% to 2,147.09.