Firm trade prevails in late morning session

Indian equity benchmarks continued their trade in green in late morning session, on account of buying in frontline blue chip counters. The rupee opened higher against dollar on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net sellers in domestic equity markets and sold shares worth Rs 1158.53 crore with gross purchases and gross sales of Rs 3759.80 crore and Rs 4918.33 crore, respectively. Traders were taking support from International Monetary Fund (IMF) statement that India’s growth outlook has improved as the impact of last year’s demonetization exercise seems to be fading and recent key structural reforms continue to pay off. Further, the study done by ASSOCHAM-Ashvin Parekh Advisory Services showed that the industry is expected to contribute $280 billion to India’s GDP in eight to nine years due to a positive fallout of the Goods and Services Tax (GST) as structural changes in the ease of doing business will propel growth. Describing the GST, in the short-term, as a mini budget short of projection of estimated revenue, the study paper said most businesses would be able to get significantly more credits under the new indirect tax regime, leading to a benefit for most of them.

Separately, investors took note that the Commerce and Industry Minister Nirmala Sitharaman is in favour of according industry status to the agriculture sector as such a move would mean that it could avail facilities and benefits on a par with an industry. The Commerce Minister’s statement comes at a time when Uttar Pradesh, Maharashtra and Punjab have already waived lakh of farm loans while farmer agitation continues in Madhya Pradesh demanding a similar favour. Traders were seen piling up position in Realty, FMCG and Industrials stocks, while selling was witnessed in Consumer Durables, Utilities and Oil & Gas sector stocks. In scrip specific development, Sobha was trading firm on achieving new sales volume of 815,230 square feet total valued at Rs 6,234 million during Q1FY18, with an average realization of Rs 7,647 per square feet (the company’s share of sales value stood at Rs 5,627 million with an average realization of Rs 6,903 per square feet).

On the global front, Asian shares were trading mostly in red, after minutes from the Federal Reserve’s last meeting showed a lack of consensus on the future pace of US interest rate increases, while oil prices inched higher following a steep decline a day earlier. Trading in Asia has been buffeted this week by tensions on the Korean peninsula after North Korea fired a missile, which US officials concluded was an intercontinental ballistic missile, into Japanese waters. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 9,650 and 31,300 levels respectively. The market breadth on BSE was positive in the ratio of 1514:683, while 103 scrips remained unchanged.

The BSE Sensex is currently trading at 31383.07, up by 137.51 points or 0.44% after trading in a range of 31264.86 and 31398.19. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.51%, while Small cap index was up by 0.77%.

The top gaining sectoral indices on the BSE were Realty up by 1.65%, FMCG up by 0.73%, Industrials up by 0.66%, PSU up by 0.63% and Capital Goods up by 0.54%, while Consumer Durables down by 0.34%, Utilities down by 0.27%, Oil & Gas down by 0.22% and IT down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.07%, ITC up by 1.60%, Asian Paints up by 1.17%, Lupin up by 0.96% and HDFC up by 0.95%.

On the flip side, Bajaj Auto down by 1.35%, ONGC down by 1.32%, NTPC down by 0.79%, Hindustan Unilever down by 0.64% and Axis Bank down by 0.54% were the top losers.

Meanwhile, International Monetary Fund (IMF) has said that India's economic growth outlook has improved as the impact of government's demonetisation drive to curb black money seems to be fading and recent key structural reforms are paying off. Though, it also noted that concerns are growing on corporate debt and banking system vulnerabilities.

IMF has stated that there is 'cautious optimism' about the global economy but policy efforts are still required to reinforce the recovery. It pointed out that the global recovery continues, even as the composition of growth is shifting among the large economies. It also expects that global growth to be around 3.5 percent this year and next. Even though global growth momentum remains on track, the IMF has said that some of the forces driving the recovery are adding to already high vulnerabilities and external imbalances. At the same time, it also noted that, weak productivity growth and a lack of inclusiveness limit the growth outlook going forward. It added that other downside risks include an abrupt adjustment of financial vulnerabilities and the risk of anti- globalisation sentiment feeding into inward-looking policies.

Noting that there is scope for improving productivity and widening economic opportunities for all, the IMF said that in many emerging and advanced economies, higher investment in education, including through better use of public funds, would support long term growth. It also explained that such investments would also help in opening up opportunities and enabling both social mobility and adjustment to structural economic shifts, including those arising from technology and trade.

The CNX Nifty is currently trading at 9671.35, up by 33.75 points or 0.35% after trading in a range of 9639.95 and 9676.35. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were SBI up by 1.91%, Bank of Baroda up by 1.90%, ITC up by 1.60%, Asian Paints up by 1.17% and Indiabulls Housing up by 1.09%.

On the flip side, Bajaj Auto down by 1.47%, ONGC down by 1.38%, GAIL India down by 1.07%, NTPC down by 0.88% and Sun Pharma down by 0.66% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 108.35 points or 0.54% to 19,973.28, Hang Seng decreased 68.31 points or 0.27% to 25,453.66, Taiwan Weighted decreased 50.01 points or 0.48% to 10,354.78, Shanghai Composite decreased 14.54 points or 0.45% to 3,192.59, FTSE Bursa Malaysia KLCI decreased 1.79 points or 0.1% to 1,766.37 and KOSPI Index decreased 1 points or 0.04% to 2,387.35.

On the other hand, Jakarta Composite increased 17.55 points or 0.3% to 5,842.60.