Indian benchmarks continue firm trade in noon session

Indian equity indices continued to trade firm in noon session on account of buying by both funds and retail investors. Sentiments got some support with NITI Aayog Vice Chairman Arvind Panagariya’s statement that India will regain the crown of the fastest growing major economy, overtaking China, as early as the first quarter of 2017-18. He said that India, on an annual basis, is ahead of China and will regain the growth momentum soon on the back of host of reforms initiated by the Modi government in the last three years. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Market participants took some encouragement with the Moody’s Investors Service stating that India’s key reforms, including the impending goods and services tax and resolution of sticky loans may improve the country’s credit profile.

On the global front, Asian markets were trading mostly higher on Friday, as upbeat data on US manufacturing & employment and buoyant European factory growth boosted investors optimism. US factory activity ticked up in May after slowing for two straight months and private employers stepped up hiring, suggesting the economy is regaining speed after struggling at the start of the year. Japan's Nikkei share average broke through the 20,000-point barrier for the first time since December 2015. Investors will be looking for further clues on the timing of rate rises in U.S. non-farm payroll data due later in the day. Chinese market declined in early trade as a stronger Chinese currency and fresh restrictions on share sales failed to entice investors fretting about tightening liquidity and uncertain economic prospects. Meanwhile, US stocks rallied on Thursday with each major of the US indexes touched record highs, after a batch of economic data suggested the economy was picking up speed. The ADP private sector employment report showed 253,000 jobs were added in May, well above the 185,000 estimated by some economists.

Back home, stocks from Telecom, Healthcare and Power counters were supporting the markets’ uptrend, while those from Oil & Gas, Energy and Metal counters were adding to the underlying cautious undertone. In scrip specific development, TVS Motor Company surged after the company posted a sales growth of 16% during the month of May 2017, with total sales increasing from 243,783 units recorded in the month of May 2016 to 282,007 units in May 2017. On the other hand, Bajaj Auto slipped after the company registered a fall of 10% in total sales to 313,756 units in May 2017 against 347,655 units in May 2016.

The market breadth remained optimistic, as there were 1391 shares on the gaining side against 963 shares on the losing side, while 149 shares remained unchanged.

The BSE Sensex is currently trading at 31258.86, up by 121.27 points or 0.39% after trading in a range of 31190.40 and 31332.56. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.65%, while Small cap index up by 0.40%.

The top gaining sectoral indices on the BSE were Telecom up by 1.64%, Healthcare up by 0.96%, Power up by 0.82%, Auto up by 0.79% and Consumer Durables up by 0.77%, while Oil & Gas down by 0.27%, Energy down by 0.14% and Metal down by 0.11% were the few losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.96%, Cipla up by 2.62%, Hero MotoCorp up by 2.39%, NTPC up by 1.84% and HDFC up by 1.60%. On the flip side, GAIL India down by 1.52%, Tata Steel down by 1.43%, Hindustan Unilever down by 1.08%, ICICI Bank down by 0.98% and Power Grid down by 0.89% were the top losers.

Meanwhile, with an aim to achieve India’s overall growth rate to 8%, Niti Aayog Member V K Saraswat has said that manufacturing sector in country needs to grow at almost 12-14% compound annual growth rate (CAGR). He also said that the country intended to achieve a 25% contribution by the manufacturing sector to its GDP by 2022.

Saraswat expects that the GDP grow to almost $2.7 trillion to $3 trillion by 2022, so the manufacturing contribution to the GDP will be almost 25%. Therefore, he said that they are aiming at $670 billion, almost adding around 100 million jobs in that direction. He also highlighted that the manufacturing sector's contribution to the GDP was 15% in the fiscal year 2015, almost $270 billion in a GDP of $1.8 trillion.

Citing the cutting-edge developments in defence sector worldwide, Niti Aayog Member has said that India could not omit the defence and aerospace sectors if it intended to inject a higher level of input from the manufacturing sector to its economy. He noted that the country's current share of GDP expenditure for research in the defence sector was insufficient. He also said that they are still spending 0.9% of the GDP in research and development (R&D) and if compare to the top five (defence spenders in world), they are way down. Therefore, he said that the country needed to pump in more investments in research and development to compete with global giants in defence. 

The CNX Nifty is currently trading at 9647.60, up by 31.50 points or 0.33% after trading in a range of 9637.45 and 9673.50. There were 29 stocks advancing against 21 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Bharti Airtel up by 3.00%, Cipla up by 2.61%, Hero MotoCorp up by 2.51%, Adani Ports & SEZ up by 1.68% and NTPC up by 1.56%. On the flip side, GAIL India down by 2.01%, Tata Steel down by 1.27%, BPCL down by 1.17%, Hindustan Unilever down by 1.14% and ICICI Bank down by 0.95% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.55%, KOSPI Index surged 1.08%, Taiwan Weighted gained 0.65%, Hang Seng added 0.37% and Nikkei 225 was up by 1.6%. On the flip side, Shanghai Composite decreased 0.05% and Jakarta Composite was down by 0.11%.