Benchmarks trade with traction; Sensex reclaims 32K mark

Indian equity benchmarks have made a positive start and are trading mostly in green in early deals on Friday, with frontline gauges recapturing their crucial 32,000 (Sensex) and 9,900 (Nifty) bastions, as traders took some encouragement with an ADB supplement report stating that India is expected to achieve the projected growth rate of 7.4 percent in 2017 and further up 7.6 percent next year on strong consumption demand, with South Asia leading the growth chart in Asia and the Pacific. Upbeat earnings from market heavyweight Reliance Industries too aided sentiments with company reporting a consolidated quarterly net profit increase of 28%, helped by higher-than-expected refining and petrochemicals margins and a one-time gain. Net profit rose to Rs 9,079 crore in the quarter ended June from Rs 7,077 crore a year earlier. Revenue rose to Rs 92,661 crore, an increase of 25.5% from Rs 73,829 crore a year ago.

On the global front, Asian markets were trading mostly in red at this point of time. Japanese market was trading in red as yen strengthened, as investors assessed an investigation into the U.S. president that may stall his economic agenda. The US markets ended mostly lower in the last session.

Back home, select stocks from Realty counter edged higher on reports that foreign investment in Indian real estate sector jumped more than two-fold at $ 7.6 billion during 2014-16 period compared with the previous three years. US accounted for more than 40 per cent of the foreign investments, followed by Canada (18 per cent) and Singapore (17 per cent). Meanwhile, the market breadth indicating the overall health of the market was strong, with 1,193 shares gaining and 707 shares declining, while a total of 94 shares were unchanged.

The BSE Sensex is currently trading at 32040.14, up by 135.74 points or 0.43% after trading in a range of 31931.34 and 32043.33. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.30%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Energy up by 1.78%, IT up by 1.31%, TECK up by 0.99%, Oil & Gas up by 0.92% and Consumer Durables was up by 0.81%, while Telecom down by 0.67%, Healthcare down by 0.22%, Realty down by 0.06%, Power down by 0.04% and Auto down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 7.25%, Reliance Industries up by 2.87%, Coal India up by 1.98%, Infosys up by 1.14% and Asian Paints up by 1.13%. On the flip side, Lupin down by 2.26%, Bharti Airtel down by 1.48%, Power Grid down by 0.84%, Cipla down by 0.78% and Dr. Reddys Lab down by 0.51% were the top losers.

Meanwhile, in order to find solution to the issue of food stockpiling, the Commerce Minister Nirmala Sitharaman has urged the World Trade Organisation (WTO) chief to vigorously follow the efforts of the member countries to reach finality on public stockholding (PSH) and the agricultural Special Safeguard Mechanism (SSM). She also stressed that the Eleventh Ministerial Conference (MC11) of the WTO outcomes must include a permanent solution on PSH for food security purposes on which there is a ministerial mandate.

The minister highlighted that any attempts at seeking outcomes on new issues such as e-commerce and investment facilitation should not be at the cost of other long pending issues on the agenda of the Doha Round. The new issues which are being pushed by developed world include investments, competition, labour, government procurement, environment and global value chains. A permanent solution to the issue of food stockpiling is important for smooth implementation of India's food security programme.

As per the global trade norms, a WTO member country’s food subsidy cap should not breach the limit of 10%, which is based on the reference price of 1986-88. There are apprehensions that full implementation of food security programme may breach this cap. So India wants amendments in the formula to calculate the food subsidy cap.  Currently, there is a peace clause according to which no country can ask WTO to take action against a country that breaches the 10% cap. This clause is there till a permanent solution is found for the food stockpiling issue. This has enabled India to continue procurement and stocking of foodgrain for distribution to poor under its food security programme without attracting any kind of action from WTO members even if it breaches the 10% subsidy cap as prescribed by the multilateral trade body.

SSM is a toll demanded by developing countries, including India, to support poor farmers from sudden surge in imports. Several developed countries give massive subsidies to their farmers and in such a case SSM would help India in protecting the farmers. High subsidies distort prices and makes Indian farmers vulnerable when the products hit the domestic markets.

The CNX Nifty is currently trading at 9907.65, up by 34.35 points or 0.35% after trading in a range of 9878.80 and 9912.15. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Wipro up by 7.19%, Reliance Industries up by 2.83%, Coal India up by 2.06%, HCL Tech up by 1.59% and Tech Mahindra up by 1.43%. On the flip side, Lupin down by 2.32%, Bharti Airtel down by 1.49%, Cipla down by 0.97%, Power Grid down by 0.71% and Dr. Reddys Lab down by 0.66% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 42.22 points or 0.21% to 20,102.37, Hang Seng slipped 33.9 points or 0.13% to 26,706.31, Jakarta Composite dropped 29.73 points or 0.51% to 5,795.48, Shanghai Composite shed 6.71 points or 0.21% to 3,238.15, Taiwan Weighted declined 51.92 points or 0.49% to 10,447.44 and FTSE Bursa Malaysia KLCI was down by 1.49 points or 0.08% to 1,754.14.

On the flip side, KOSPI Index was up by 7.46 points or 0.31% to 2,449.30.