Benchmarks continue to trade with modest gain

Indian equity benchmarks continued their trade with modest gain in morning session, on account of buying in frontline blue chip counters. The rupee was trading lower against dollar in early trade on account of buying of American currency by banks and importers. Foreign Portfolio Investors stood net buyers in secondary markets on Monday and bought shares worth Rs 51.56 crore with gross purchases and gross sales of Rs 5312.91 crore and 5261.35 crore, respectively. Traders took support with commerce and industry minister Nirmala Sitharaman’s statement that Foreign Direct Investment (FDI) inflows into the country increased 23 percent in the first two months of the current fiscal from a year ago. The minister said the government has put in place an investor-friendly policy for FDI and except for a small negative list most sectors are open for 100 percent FDI. However, the minister enlightened that India’s trade deficit with China is a matter of concern and efforts are being made to increase overall exports by diversifying the trade basket with emphasis on manufactured goods, services, resolution of market access issues and other non-tariff barriers. Separately, India ranked number two on Grant Thornton’s Business Optimism Index in the second quarter of 2017. The Grant Thornton International Business Report (IBR) said that the confidence in Indian businesses is backed by a buoyant economy and continued reforms. According to the IBR survey, India’s ranking has gone up from fourth to the second position in Q2. 94 percent of the surveyed businesses are confident about the growth of the Indian economy. Investors took note of Central Board of Direct Taxes (CBDT) chairman’s statement that income taxpayer base moved up substantially to 6.26 crore at the end of the last fiscal, from nearly 4 crore earlier. The chairman added that post demonetization the department has taken a host of measures to increase tax base and the statement of financial transaction (SFT) report filed by banks shows widening of taxpayer base.

Traders were seen piling up position in Telecom, Metal and Bankex stocks, while selling was witnessed in Capital Goods, Industrials and Energy sector stocks. Telecom companies stocks were buzzing after the Department of Telecommunications (DoT) and the Finance Ministry have broadly agreed on relief measures for the debt-laden telecom sector that may include nearly doubling the deferred payment period for spectrum bought in auctions and reducing the interest burden on companies. In scrip specific development, Idea Cellular was trading firm after the Competition Commission of India (CCI) approved the proposed merger between Vodafone India and Idea Cellular, a key step in clearing the way for creating India’s biggest phone company by subscribers. UK-based Vodafone Group Plc’s India unit and Idea, currently ranked at two and three, respectively, will have a combined base of nearly 400 million customers and 41 per cent revenue market share.

On the global front, Asian markets were trading mostly in red. China’s economy is likely to grow at an annual rate of around 6.7 percent in the second half of 2017, slowing slightly from the first half of the year, the State Information Center (SIC) said. It forecast full-year growth in the world’s second largest economy of around 6.8 percent. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 32,200 and 9,950 levels respectively. The market breadth on BSE was negative in the ratio of 1046:1158, while 121 scrips remained unchanged.

The BSE Sensex is currently trading at 32266.69, up by 20.82 points or 0.06% after trading in a range of 32209.68 and 32374.30. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.33%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were Telecom up by 1.50%, Metal up by 0.46%, Bankex up by 0.40%, Basic Materials up by 0.37% and TECK up by 0.33%, while Capital Goods down by 0.48%, Industrials down by 0.41%, Energy down by 0.29%, Oil & Gas down by 0.22% and FMCG down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.43%, ICICI Bank up by 0.81%, TCS up by 0.78%, Tata Steel up by 0.76% and Bharti Airtel up by 0.73%.

On the flip side, Tata Motors down by 1.42%, Tata Motors - DVR down by 1.19%, Larsen & Toubro down by 0.67%, Lupin down by 0.65% and ONGC down by 0.64% were the top losers.

Meanwhile, amid the concern of country’s growing trade deficit with China, there is some good news for the country, as the foreign direct investment (FDI) inflows into the country increased 23 per cent in the first two months of the current fiscal from a year ago. The cumulative foreign direct investment in April-May was $10.02 billion, or about Rs 64,524 crore, compared with $8.12 billion, or about Rs 52,289 crore, a year earlier.

Commerce and industry minister Nirmala Sitharaman pointed that the government has put in place an investor-friendly policy for FDI and except for a small negative list most sectors are open for 100 per cent FDI. She added that the government reviews FDI policy on an ongoing basis with a view to liberalise and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows.

Though talking about the trade with China, the minister said that trade deficit with China is a matter of concern. We are discussing the issue with China for greater access for Indian products and services in the Chinese market. She further said that efforts are being made to increase overall exports by diversifying the trade basket with emphasis on manufactured goods, services, resolution of market access issues and other non-tariff barriers. India’s trade deficit with China in 2016-17 had declined slightly to $51.08 billion, from $52.69 billion in 2015-16. It was at $48.48 billion in 2014-15.

The CNX Nifty is currently trading at 9969.20, up by 2.80 points or 0.03% after trading in a range of 9954.70 and 10011.30. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 2.54%, Bharti Infratel up by 2.36%, Vedanta up by 1.78%, Hero MotoCorp up by 1.42% and TCS up by 0.88%.
On the flip side, Zee Entertainment down by 1.78%, HCL Tech down by 1.74%, Tata Motors down by 1.51%, Eicher Motors down by 1.50% and Tata Motors - DVR down by 1.02% were the top losers.

The Asian markets were trading mostly in red; Jakarta Composite decreased 14.83 points or 0.26% to 5,786.75, Nikkei 225 decreased 10.47 points or 0.05% to 19,965.20, Hang Seng decreased 10 points or 0.04% to 26,836.83, Shanghai Composite decreased 5.16 points or 0.16% to 3,245.44, KOSPI Index decreased 2.62 points or 0.11% to 2,448.91 and Taiwan Weighted decreased 0.49 points to 10,460.79.

On the other hand, FTSE Bursa Malaysia KLCI increased 0.5 points or 0.03% to 1,762.49.