Benchmarks make optimistic start; Nifty reclaims 9,600 mark

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Friday, with frontline gauges recapturing their crucial 9,600 (Nifty) and 31,100 (Sensex) levels. Sentiments remained up-beat taking a lead from Asian markets, which appeared to take in stride the resumption of the US technology rout overnight. Investors also took cues from the Bank of Japan maintaining status quo in its June board review, pledging to keep asset purchases around the current target of 80 trillion yen ($727 million). On the domestic front, gains remained capped with the current account deficit soaring to $ 3.4 billion, or 0.6 per cent of gross domestic product (GDP), in the fourth quarter of fiscal 2017, from $ 0.3 billion a year ago. The widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit which stood at $ 29.7 billion. However, on a sequential basis, the gap between forex earnings and expenses, narrowed from $ 8 billion in the third quarter of FY17.

Stocks related to chemical sector edged higher, as the Finance Ministry has imposed definitive anti-dumping duty on Hydrogen Peroxide imports from six countries. However, stocks related to software and technology remained under pressure tailing the slump in global counterparts and as the board of directors at Infosys will set revised growth targets in place of the much-touted goal of $20 billion by 2020. Meanwhile, the market breadth indicating the overall health of the market was strong, with 1,339 shares gaining and 570 shares declining, while a total of 82 shares were unchanged.

The BSE Sensex is currently trading at 31129.76, up by 54.03 points or 0.17% after trading in a range of 31092.19 and 31182.73. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.64%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Realty up by 1.11%, FMCG up by 0.83%, Basic Materials up by 0.78%, Metal up by 0.67% and Industrials up by 0.63%, while IT down by 0.46% and TECK down by 0.32% were the only losing indices on the BSE.

The top gainers on the Sensex were ITC up by 1.46%, Tata Motors up by 1.42%, Mahindra & Mahindra up by 1.13%, NTPC up by 1.00% and Coal India up by 0.96%. On the flip side, Wipro down by 1.96%, Adani Ports & Special Economic Zone down by 0.64%, Reliance Industries down by 0.59%, Infosys down by 0.56% and Lupin down by 0.42% were the top losers.

Meanwhile, higher trade deficit which stood at $29.7 billion, brought about by a larger increase in merchandise imports relative to exports led to surge in current account deficit (CAD) which soared to $ 3.4 billion, or 0.6 per cent of gross domestic product (GDP), in the fourth quarter of fiscal 2017, from $ 0.3 billion a year ago. However, as per Reserve Bank of India’s data, despite a higher merchandise import bill and almost flat growth in services income as both software services income as well as remittances by the overseas Indians were at the same level as previous year, India’s external sector balance sheet remained in the comfort zone of less than 2% of GDP during the quarter ended March’17. On a sequential basis, the gap between forex earnings and expenses, narrowed from $ 8 billion in the third quarter of FY17.

In the fourth quarter, net foreign direct investment moderated to $5 billion. Net portfolio investment recorded substantial inflow of $ 10.8 billion in both equity and debt segment, as against net outflow of $ 1.5 billion in the same quarter of FY16. Capital account surplus more than doubled to $ 10.3 billion from $ 3.9 billion in the same period a year ago on account of strong portfolio flows during the quarter.

For the full fiscal 2017, CAD narrowed to 0.7 per cent of GDP from 1.1 per cent in the year ago period on the back of a contraction in trade deficit. In the previous fiscal, trade deficit narrowed to $ 112.4 billion from $ 130.1 billion in 2015-16. In FY17, gross FDI inflows stood at $ 60.2 billion, higher than $55.6 billion in 2015-16, while net FDI inflows in 2016-17 was at $ 35.6 billion as against $ 36 billion in 2015-16. Portfolio investment recorded a net inflow of $ 7.6 billion in 2016-17 as against an outflow of $ 4.5 billion a year ago. In fiscal 2017, there was an accretion of $ 21.6 billion to the foreign exchange reserves as compared with $ 17.9 billion in 2015-16.

Balance of payments for the full financial year stood at $21.6 billion, while for Q4 the same stood at $7.31 billion. Private transfer receipts, mainly representing remittances by Indians employed overseas, at $ 15.7 billion remained almost at the same level as in the preceding year.

The CNX Nifty is currently trading at 9601.30, up by 23.25 points or 0.24% after trading in a range of 9593.00 and 9608.15. There were 36 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 2.89%, Bharti Infratel up by 2.19%, ITC up by 1.41%, Tata Motors up by 1.26% and BPCL up by 1.24%. On the flip side, Wipro down by 2.24%, Infosys down by 0.78%, Adani Ports & Special Economic Zone down by 0.78%, Reliance Industries down by 0.57% and TCS down by 0.56% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 2.95 points or 0.16% to 1,792.96, Taiwan Weighted increased 57.01 points or 0.57% to 10,145.36, Hang Seng added 112.54 points or 0.44% to 25,677.88 and Nikkei 225 was up by 147.7 points or 0.74% to 19,979.52.

On the flip side, Jakarta Composite decreased 27.58 points or 0.48% to 5,748.70, Shanghai Composite shed 8.07 points or 0.26% to 3,124.42 and KOSPI Index was down by 0.8 points or 0.03% to 2,360.85.