Markets trade at all-time highs; Nifty nears 9,500

Extending their last session jubilation, Indian equity benchmarks have made a positive start to trade at  record highs in early deals on Tuesday, with frontline gauges inching towards their crucial 30,500 (Sensex) and 9,500 (Nifty) levels. Sentiments remained up-beat with report that India’s exports jumped 19.8% to $24.6 billion in April, on the back of strong performance from petroleum, engineering and textiles sectors. However, trade deficit also witnessed about threefold increase to $13.2 billion, due to goods imports in April recording a historic 49.07% year-on-year growth to $37.9 billion - following a surge in gold, oil, coal, chemicals, pearls and precious stones, machinery, transport equipment and electronics imports.

On the global front, Asian markets were trading mostly in red at this point of time. Chinese market was trading with a cut of over one third of a percent on weaker industrial production and retail data. Though, the US markets ended higher in the last session and the tech-heavy Nasdaq and the S&P 500 once again climbed to new record closing highs.

Back home, telecom stocks rang loud on report that an inter-ministerial panel has been constituted to suggest a policy prescription to rescue the telecom sector. The panel after consulting with banks and operators will finalise its views in 3 months. Defence related stocks too remained buzzing, as the government is now getting set to clear the much-awaited 'strategic partnership' policy to boost the private sector's role in defence production. The market breadth indicating the overall health of the market was strong, with 1,171 shares gaining and 891 shares declining, while a total of 107 shares were unchanged.

The BSE Sensex is currently trading at 30475.51, up by 153.39 points or 0.51% after trading in a range of 30363.37 and 30518.78. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.23%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Telecom up by 2.10%, TECK up by 1.07%, IT up by 0.99%, Energy up by 0.69% and Healthcare up by 0.53%, while PSU down by 0.06% and Capital Goods down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.04%, TCS up by 1.93%, Reliance Industries up by 1.79%, Dr. Reddys Lab up by 1.70% and Tata Motors up by 1.18%. On the flip side, Asian Paints down by 1.09%, Coal India down by 0.54%, ONGC down by 0.40%, GAIL India down by 0.28% and Larsen & Toubro down by 0.16% were the top losers.

Meanwhile, the Industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest Economic Outlook Survey has forecasted India's gross domestic product (GDP) growth at 7.4% for the financial year 2017-18, with a minimum and a maximum range of 7.0% and 7.6% respectively. Based on the survey that was conducted from economists belonging to the industry, banking and financial services sector, the growth will be supported by the agriculture sector which is estimated to clock 3.5% growth and improvement in the performance of the industry and services sector. The industry and services sector are also expected to grow by 6.9% and 8.4% respectively in FY18.

However, the economists participating in the Survey forecasted the country's GDP growth for 2016-17 to be between 6.6% and 7.1%, with some even anticipating the fourth quarter (January-March) economic growth to be lower than the previous quarter numbers. The participants also felt that with the process of re-monetisation almost complete, consumption activity witnessed an uptick and will further build up going ahead.

According to the Economic Outlook Survey results, Consumer Price Index has a median forecast of 4.8% for 2017-18 with a minimum and maximum level of 4.0% and 5.3% respectively. The wholesale price index based inflation rate is projected at 5% in 2017-18, with a minimum and maximum range of 3.6% and 5.9% respectively. Besides, a majority of the economists participating in the survey were supportive of the idea of Universal Basic Income. The respondents felt that UBI can be an efficient framework which would help reduce poverty and transfer the choice/decision to spend on the individual. It would also promote labor market flexibility as individuals can enter the labor market without the fear of losing the benefits.

As per the survey report, economists participating in the survey unanimously believed that protectionism is becoming a new normal led by certain advanced economies which are increasingly looking inwards to propel growth and increase employment. According to some of the respondents, this could result in increased tension between nations which could lead to trade wars. The economists also felt that while protectionism is a challenge, India needs to keep its focus on implementing reforms. The situation calls for improving the investment climate in the country, enhancing hard and soft infrastructure and continuing the efforts on tackling the issue of non-performing assets.

The CNX Nifty is currently trading at 9484.60, up by 39.20 points or 0.42% after trading in a range of 9456.35 and 9492.60. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.95%, Bharti Infratel up by 2.41%, ACC up by 2.22%, Dr. Reddys Lab up by 1.95% and Reliance Industries up by 1.89%. On the flip side, Asian Paints down by 1.27%, Hindalco down by 1.08%, Zee Entertainment down by 0.71%, Bank of Baroda down by 0.56% and Coal India down by 0.56% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 63.3 points or 0.25% to 25,308.29, Taiwan Weighted shed 39.1 points or 0.39% to 9,997.72, Jakarta Composite dropped 20.1 points or 0.35% to 5,668.77, Shanghai Composite fell 10.49 points or 0.34% to 3,079.74 and FTSE Bursa Malaysia KLCI was down by 1.75 points or 0.1% to 1,776.90.

On the flip side, KOSPI Index increased 2.49 points or 0.11% to 2,293.14 and Nikkei 225 was up by 26.39 points or 0.13% to 19,896.24.