Markets hit fresh record highs ahead of GDP data

Indian equity benchmarks extended their early gains in late afternoon session to clock new high levels, with healthy buying in Automobile, Realty and capital goods stocks. Sentiments remained optimistic with the Moody's Investors Service’s report stating that Indian economy will grow by 7.5 per cent in the current fiscal year, 7.7 per cent in 2018-19 and will reach to around 8 per cent in 3-4 years on the back of government's various reforms. Some support also came with Prime Minister Narendra Modi’s statement that India has one of the most liberal FDI policy regimes in the world and more than 90 percent of foreign investment flows are under automatic route. While monsoon rains hitting the Kerala coast kept the sentiment upbeat, the investors looked out for the March-quarter GDP numbers, to be announced later in the day. Meanwhile, Reserve Bank of India (RBI) will soon come out with final guidelines on customer protection which would limit customers liability in case of unauthorised electronic banking transactions.

On the global front, European markets were trading mixed, as political uncertainty took center stage once again. Asian markets were trading in red. Back home, in scrip specific development, JaiPrakash Associates jumped higher after the company executed a definitive agreement with Orient Cement (OCL), a part of CK Birla Group. The agreement is for acquisition by OCL of company's 74% equity stake in Bhilai Jaypee Cement (BJCL) based on an enterprise value of Rs 1,450 crore on a cash free and debt free basis.

The BSE Sensex is currently trading at 31235.30, up by 75.90 points or 0.24% after trading in a range of 31107.48 and 31236.37. There were 20 stocks advancing against 9 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.97%, while Small cap index was up by 1.12%.

The top gaining sectoral indices on the BSE were Realty up by 1.17%, Auto up by 1.14%, Consumer Disc up by 1.01%, Capital Goods up by 0.99% and Utilities up by 0.99%, while Metal down by 1.00%, Telecom down by 0.40%, TECK down by 0.29%, Energy down by 0.27% and IT down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 5.54%, Lupin up by 2.86%, Power Grid up by 2.26%, Dr. Reddy’s Lab up by 2.06% and GAIL India up by 1.37%. On the flip side, Tata Steel down by 1.16%, Infosys down by 1.04%, Coal India down by 0.97%, HDFC down by 0.74% and ONGC down by 0.73% were the top losers.

Meanwhile, just ahead of the release of the fourth quarter GDP numbers, the global credit rating agency, Moody's Investors Service in its latest report ‘Global Macro Outlook’ has said that Indian economy will grow by 7.5 per cent in the current fiscal year, 7.7 per cent in 2018-19 and will reach to around 8 per cent in 3-4 years on the back of government's various reforms.

The agency said that the economy will strengthen as the impact of last year's demonetization fades and with the government successfully pushing through several key reforms such as liberalisation of FDI rules in a number of key sectors, July rollout of the Goods & Service Tax (GST) and a national bankruptcy code, noting that these reforms will help reduce inefficiencies and improve trend growth over the long run.

However, the report has pointed that the private sector investment has remained weak despite progress on reforms. On the problem of mounting bad loans, Moody's noted that persistent banking sector weakness from a high proportion of delinquent loans on bank balance sheets will weigh on growth, if not resolved, by constraining credit for investment related activity. Besides, it said that the inflation rate will rise to around 5 per cent by the end of this year and expects the Reserve Bank of India to hold the policy repo rate steady, holding a neutral stance in this growth environment.

The CNX Nifty is currently trading at 9636.95, up by 12.40 points or 0.13% after trading in a range of 9609.25 and 9639.65. There were 28 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 5.50%, Ultratech Cement up by 3.51%, Indiabulls Housing Finance up by 3.42%, Lupin up by 2.94% and Power Grid up by 2.16%. On the flip side, Bharti Infratel down by 2.74%, Vedanta down by 1.96%, Tata Power down by 1.94%, Aurobindo Pharma down by 1.71% and Tata Steel down by 1.60% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 61.23 points or 0.61% to 10,040.72, Hang Seng decreased 40.98 points or 0.16% to 25,660.65, Nikkei 225 decreased 27.28 points or 0.14% to 19,650.57 and FTSE Bursa Malaysia KLCI decreased 2.82 points or 0.16% to 1,762.52. On the flip side, KOSPI Index increased 3.7 points or 0.16% to 2,347.38, Shanghai Composite increased 7.12 points or 0.23% to 3,117.18 and Jakarta Composite increased 12.9 points or 0.23% to 5,706.29.

European markets were trading mixed; Germany’s DAX increased 7.08 points or 0.06% to 12,605.76 and UK’s FTSE 100 was up by 17.51 points or 0.23% to 7,544.02. On the flip side, France’s CAC decreased 3.6 points or 0.07% to 5,302.34.