Sensex, Nifty continue firm trade on positive macro-data

Indian equity benchmarks continued to trade firm in late afternoon session, picking up cues from firm European markets. Broadly positive domestic macro-economic data and healthy buying in Power, Utilities and Realty also kept the sentiments upbeat. India's industrial production grew by 3.1 percent in April 2017, as compared to 2.7 percent in the month of March 2017 and against a drop of 1.2 percent in February 2017. The growth was due to good performance of electricity, mining and manufacturing sectors. The Index of Industrial Production (IIP) for the month of April 2017 stood at 117.9. Some support also came with the union minister Jayant Sinha’s statement that India is poised to become the entrepreneurial engine of the world and lead in innovation and economic development thanks to the factors like its frugal development model and advantage of demographic dividend. However, the markets trimmed some of their gains as investors remained cautious ahead of the US Federal Reserve’s two-day policy meeting that kicks off later today where they are widely expected to hike the policy rate this time.

On the global front, European markets were trading in green despite tech stocks continued to fall in Asian trade. Investors also will be watching out for political events and fresh data, while waiting for a Federal Reserve meeting later this week. Asian markets were also trading in green. Back home, in scrip specific development, White Organic Agro jumped higher after the company received its board’s approval to form wholly owned subsidiary company in the United Arab Emirates. The board has also approved the investment in the said subsidiary up to AED 15 Million. Aforementioned strategic expansion has been approved to strengthen the future Organic exports business of the company and strengthen the global presence of the company in organic sector.

The BSE Sensex is currently trading at 31192.87, up by 97.17 points or 0.31% after trading in a range of 31075.80 and 31260.77. 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 0.36%, while Small cap index was up by 0.82%.

The top gaining sectoral indices on the BSE were Power up by 1.17%, Utilities up by 1.06%, Realty up by 0.68%, Capital Goods up by 0.45% and Basic Materials up by 0.38%, while IT down by 0.64%, TECK down by 0.55%, Metal down by 0.19%, Telecom down by 0.17% and Energy down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.65%, HDFC up by 1.99%, Lupin up by 1.84%, Sun Pharma up by 1.26% and NTPC up by 1.14%. On the flip side, Tata Motors down by 0.97%, TCS down by 0.84%, Wipro down by 0.67%, Infosys down by 0.52% and SBI down by 0.49% were the top losers.

Meanwhile, amidst spreading demand for the farm loan waivers across the country, Finance Minister Arun Jaitley has clarified that the central government will not be part of a state’s fiscal leverage in waiving farm loans. Clearing the air on whether the Centre would financially support states that are offering farm loan waivers, Jaitley categorically said that states which want to go for these kinds of schemes should generate the funds from their own resources.

Jaitley’s comments came after Maharashtra joined a growing list of states that announced costly bailouts for farmers following widespread protests. Maharashtra government announced a loan waiver for over one crore farmers who have land holdings of less than five acres and this move would cost the state exchequer Rs 30,000 crore.

On the same issue, the Reserve Bank of India (RBI) too had recently expressed concern that rush for such actions may harm the country’s fiscal health and may have inflationary spillovers. It warned that unless there is existing fiscal space in the state budgets, the states should avoid going down the slippery path of farm loan waivers, as it would be risky to tread on that path.

The CNX Nifty is currently trading at 9632.75, up by 16.35 points or 0.17% after trading in a range of 9614.10 and 9654.15. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 2.79%, Lupin up by 1.80%, HDFC up by 1.61%, Sun Pharma up by 1.40% and Bosch up by 1.23%. On the flip side, Tata Motors - DVR down by 1.40%, Vedanta down by 1.33%, HCL Tech. down by 1.32%, Bharti Infratel down by 1.12% and Tech Mahindra down by 1.08% were the top losers.

Asian markets were trading mostly in green; Jakarta Composite increased 12.76 points or 0.22% to 5,704.19, Shanghai Composite increased 13.87 points or 0.44% to 3,153.74, KOSPI Index increased 16.83 points or 0.71% to 2,374.70, Taiwan Weighted increased 18.19 points or 0.18% to 10,128.15 and Hang Seng increased 144.06 points or 0.56% to 25,852.10. On the flip side, Nikkei 225 decreased 9.83 points or 0.05% to 19,898.75 and FTSE Bursa Malaysia KLCI decreased 2.55 points or 0.14% to 1,786.34.

All European markets were trading in green. UK’s FTSE 100 increased 11.28 points or 0.15% to 7,523.15, France’s CAC increased 23.41 points or 0.45% to 5,264.00 and Germany’s DAX increased 57.22 points or 0.45% to 12,747.66.