Benchmarks trade with modest gains in late morning session

Indian equity benchmarks continued to trade in green in late morning session on account of buying in frontline blue chip counters. The equity benchmarks were trading with modest gains with NSE benchmark ‘Nifty’ holding 9600 level despite mixed Asian trade. The domestic sentiment was also buoyed as crude oil prices overseas fell to a 7-month low. Foreign portfolio investors bought shares worth Rs 86.11 crore in domestic equity markets on Friday with gross purchases and gross sales of Rs 6819.81 crore and Rs 6733.70 crore, respectively. The risk appetite got a push after India’s exports exhibiting positive growth for the last eight months grew 8.32 per cent to $24.01 billion in May, mainly on account of robust performance by sectors like petroleum, chemicals, engineering goods as well as gems and jewellery.

Meanwhile, industry body PHD Chamber said that the Real Estate (Regulation and Development) Act, if implemented with a positive approach, can boost the GDP of the country. The Real Estate Regulation Act (RERA) came into force from April 1 with a promise of protecting the right of consumers and ushering in transparency. Separately, a private report highlighted that India continued to climb on the Global Innovation Index (GII) 2017, emerging as the highest ranked economy in Central and South Asia, as it moved up six places to 60th among 130 nations. Last year, India climbed up the innovation ladder to reach 66th position from 81st in 2015 - an improvement after 5 years of continuous drop in its ranking. The market upside was, however, 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.

Traders were seen piling up position in Realty, FMCG and Consumer Durables stocks, while selling was witnessed in IT, Healthcare and TECK stocks. In scrip specific development, Ipca Laboratories was trading under pressure after almost all drugs manufactured by the pharma company at its facilities at Pithampur, Silvassa and Ratlam were banned from the US market by the country’s health regulator. The US Food and Drug Administration (USFDA) cited violation of current good manufacturing norms for taking the step against the company. Bhushan Steel, Jyoti Structures, Lanco Infratech, Monnet Ispat and Amtek Auto were deeplyunder pressure on reports that these companies are in the list of 12 accounts to be sent to Insolvency and Bankruptcy Code (IBC). The Reserve Bank of India has sent bankers the list of 12 stressed accounts that they must resolve through the Insolvency and Bankruptcy Code (IBC).

On the global front, Asian shares were trading mostly in green. The Bank of Japan kept monetary policy steady and offered a more upbeat view on private consumption and overseas economies, signaling its confidence that the recovery was gaining momentum. In a widely expected move, the BOJ maintained the 0.1 per cent interest it charges on a portion of the excess reserves that financial institutions park with the central bank. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 9,600 and 31,100 levels respectively. The market breadth on BSE was positive in the ratio of 1403:739, while 122 scrips remained unchanged.

The BSE Sensex is currently trading at 31128.69, up by 52.96 points or 0.17% after trading in a range of 31092.19 and 31182.73. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index gained 0.63%.

The top gaining sectoral indices on the BSE were Realty up by 1.48%, FMCG up by 0.83%, Consumer Durables up by 0.68%, Basic Materials up by 0.65% and Industrials up by 0.49%, while IT down by 0.51%, Healthcare down by 0.49% and TECK down by 0.33% were the only losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.69%, Tata Motors up by 1.25%, Mahindra & Mahindra up by 1.13%, Coal India up by 0.94% and GAIL India up by 0.88%.

On the flip side, Wipro down by 2.15%, Lupin down by 1.66%, Dr. Reddy’s Lab down by 1.20%, Cipla down by 1.11% and Sun Pharma down by 0.99% were the top losers.

Meanwhile, continuing its growth trajectory for the ninth straight month, India’s merchandise exports grew by 8.32 percent to $24014.62 million in May 2017 on the back of robust performance by sectors such as petroleum, chemicals, engineering goods as well as gems and jewellery. However, the overall trade deficit shot up to nearly 30-month high of $13841.72 million in May as against $6272.90 million in the year-ago period, driven by a sharp uptick in gold imports. The trade deficit during April-May 2017-18, was $27090.91 million as against $11117.77 million in the same period last year. 

As per the data released by the Commerce Ministry, exports increased by 8.32 percent to $24014.62 million in May 2017, as compared to $22170.62 million in the same month a year ago. In the rupee terms exports was higher by 4.30 percent to Rs 154713.69 crore as compared to Rs 148336.31 crore in May 2016. Cumulative value of exports for the period April-May 2017-18 was $48649.71 million as against $42739.47 million, registering a positive growth of 13.83 percent over the same period last year. In Rupee terms it was up by 10.02 percent to Rs 313627.48 crore from Rs 285056.42 crore.

Non-petroleum and Non Gems & Jewellery exports in May 2017 were valued at $17514.36 million against $16404.31 million in May 2016, an increase of 6.77 percent. Non-petroleum and Non Gems & Jewellery exports during April - May 2017-18 were valued at $35233.23 million as compared to $31540.72 million for the corresponding period in 2016-17, an increase of 11.71 percent.

Imports during May 2017, increased by 33.09 percent to $37856.34 million as compared to $28443.52 million in May 2016, while in rupee terms it was up by 28.16 percent to Rs 243888.74 crore from Rs 190306.19 crore in May 2016. Cumulative value of imports for the period April-May 2017-18 was $75740.62 million as against $53857.24 million, registering a positive growth of 40.63 percent over the same period last year. In rupee terms the cumulative imports was Rs 488269.26 crore, up by 35.92 percent from Rs 359229.90 crore in the same period last year.

Oil imports during May, 2017 were valued at $7692.71 million which was 29.54 percent higher than oil imports valued at $5938.59 million in the corresponding month last year. Oil imports during April-May, 2017-18 were valued at $15051.98 million which was 29.82 percent higher than the oil imports of $11594.51 million in the corresponding period last year.

Non-oil imports during May, 2017 were estimated at $30163.63 million which was 34.03 percent higher than non-oil imports of $22504.93 million in the same month last year. Non-oil imports during April-May 2017-18 were valued at $60688.64 million which was 43.60 percent higher than the level of such imports valued at $42262.73 million in April-May, 2016-17. 

The CNX Nifty is currently trading at 9600.80, up by 22.75 points or 0.24% after trading in a range of 9593.00 and 9615.85. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 2.51%, Bharti Infratel up by 2.05%, ITC up by 1.67%, Tata Motors up by 1.27% and Mahindra & Mahindra up by 1.15%.

On the flip side, Wipro down by 2.28%, Dr. Reddy’s Lab down by 1.23%, Lupin down by 1.13%, Bank of Baroda down by 0.97% and Cipla down by 0.95% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.63 points or 0.15% to 1,792.64, Taiwan Weighted increased 60.72 points or 0.6% to 10,149.07, Hang Seng increased 101.52 points or 0.4% to 25,666.86 and Nikkei 225 increased 148 points or 0.75% to 19,979.82.

On the other hand, Jakarta Composite decreased 27.61 points or 0.48% to 5,748.67, Shanghai Composite decreased 9.35 points or 0.3% to 3,123.13 and KOSPI Index decreased 0.96 points or 0.04% to 2,360.69.