Benchmarks trade flat in late morning session

Indian equity benchmarks started gyrating around neutral lines in late morning session in absence of any upside triggers. The rupee opened higher against dollar on account of selling of American currency by banks and exporters amid sustained inflows by foreign institutional investors. Foreign Portfolio Investors bought Rs 384.73 crore of shares in domestic equity markets yesterday with gross purchases and gross sales of Rs 4,730.79 crore and Rs 4346.06 crore, respectively. Investors took some support from Indian Meteorological department’s (IMD) statement that the southwest monsoon will hit Kerala on May 30, two days ahead of schedule. Normally, the monsoon season begins on June 1. The onset of southwest monsoon over Kerala signals the arrival of monsoon over the Indian subcontinent. A foreign brokerage report highlighted that the Indian economy is entering a ‘productive growth phase’ and real GDP growth is likely to rise to 7.9% by December driven by favourable external demand, improving corporate balance sheets and private capex recovery. The research note enlightened that growth is likely to inflect higher, accelerating by almost 1% point over the next three quarters. It expects growth to pick up from the second quarter of this year onwards and accelerate by almost a full percentage point to 7.9% by December 2017 from the current run rate of 7%.

However, the United Nations has revised downward India’s economic growth forecast for 2017 but predicted an increased 7.9% GDP growth next year. The revised report projected that India will achieve an impressive 7.9% GDP growth in 2018, revising upwards its January estimates when it had said India’s growth will be 7.6% next year. The report, on the other hand, warned that stressed balance sheets in the country’s banking sector, which has emerged as a cause of concern for the Narendra Modi government, will have an adverse effect on investment rebound in the country. Traders were seen piling position in Metal, Power and Telecom stocks, while selling was witnessed in Consumer Durables, IT and FMCG stocks. In scrip specific development, Tata Steel was trading in green as the company has narrowed its losses in the quarter ended March 31, to Rs 1,168 crore down from Rs 3,042 crore in the corresponding quarter last year on the back of a one-time non-cash pension curtailment charge. Realty firm Sobha was trading in green after the company yesterday reported 70% increase in its consolidated net profit at Rs 47 crore for the quarter ended March. Its net profit stood at Rs 27.6 crore in the year-ago period.

On the global front, Asian shares were trading in red, on the continued chaotic US political situation weighing on expectations for economic policies favoring tax cuts and higher spending. Japanese stocks dropped after the dollar eased against the yen on weak US economic data, while financials stocks underperformed hit by lower US yields. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 9,500 and 30,500 levels respectively. The market breadth on BSE was positive in the ratio of 1189:1090, while 116 scrips remained unchanged.

The BSE Sensex is currently trading at 30599.56, up by 16.96 points or 0.06% after trading in a range of 30519.14 and 30642.94. 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 0.24%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were Metal up by 1.75%, Power up by 0.61%, Telecom up by 0.55%, Utilities up by 0.53% and Realty up by 0.49%, while Consumer Durables down by 0.77%, IT down by 0.55%, FMCG down by 0.38%, TECK down by 0.33% and Healthcare down by 0.16% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 5.15%, ICICI Bank up by 1.45%, Hero MotoCorp up by 1.04%, Tata Motors up by 1.01% and Bharti Airtel up by 1.00%.

On the flip side, Wipro down by 1.08%, ITC down by 0.90%, Sun Pharma down by 0.86%, Infosys down by 0.77% and Adani Ports & Special Economic Zone down by 0.73% were the top losers.

Meanwhile, the United Nations (UN) has lowered India's gross domestic product (GDP) growth forecast for the financial year 2017. As per the UN World Economic Situation and Prospects as of mid- 2017 report, the Indian economy is expected to grow at 7.3 percent in 2017, a downward revision from the 7.7 percent forecast in January.

However, the revised report has projected India’s GDP in the next fiscal year to achieve an impressive growth of 7.9 percent, revising upwards its January estimates when it had said India’s growth will be 7.6 percent next year. It also warned that stressed balance sheets in the banking and corporate sectors, which have emerged as a cause of anxiety for the Narendra Modi government, will have an adverse effect on investment rebound in the country.

UN report pointed out that the country’s economic condition remains strong despite transitory disruptions from the government’s demonetization move. It also said that this is primarily due to sound fiscal and monetary policies along with the implementation of key domestic reforms. Adding further, it also said that despite India’s growth being revised downward, it remains the fastest growing large developing economy, way ahead of China which is projected to grow at 6.5 per cent in 2017 and 2018.

The CNX Nifty is currently trading at 9507.50, down by 4.75 points or 0.05% after trading in a range of 9489.70 and 9521.00. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 5.32%, Indiabulls Housing up by 2.89%, ICICI Bank up by 1.49%, Bharti Airtel up by 1.10% and Mahindra & Mahindra up by 1.04%.

On the flip side, Tech Mahindra down by 2.59%, Yes Bank down by 1.38%, ACC down by 1.31%, Bosch down by 1.23% and Wipro down by 1.23% were the top losers.

The Asian markets were trading in red; Nikkei 225 decreased 109.98 points or 0.55% to 19,809.84, Hang Seng decreased 42.16 points or 0.17% to 25,293.78, Taiwan Weighted decreased 34.27 points or 0.34% to 9,997.22, Jakarta Composite decreased 22.05 points or 0.39% to 5,624.95, FTSE Bursa Malaysia KLCI decreased 6.67 points or 0.38% to 1,771.48, KOSPI Index decreased 3.33 points or 0.15% to 2,292.00 and Shanghai Composite decreased 2.45 points or 0.08% to 3,110.52.