Benchmarks trade flat ahead of RBI’s policy outcome

Indian equity benchmarks have made a flat opening and are trading near their neutral lines in early deals on Wednesday, as traders remained on sidelines ahead of Reserve Bank of India’s (RBI’s) policy decision to be announced later in the day, which will decide the further course of action for the markets. Market participants took some solace with Minister of State for Finance Santosh Kumar Gangwar’s statement that the government has collected over Rs 1.80 lakh crore in direct tax till July 15 in the current fiscal, an increase of 21.4 per cent year-on-year, 'belying' fears of slowdown in economic activities. The current growth rate is higher than the target rate of 15.32 per cent required to achieve the Budget Estimate.

On the global front, Asian markets were trading mostly in green at this point of time led by the technology stocks after results from Apple Inc. buoyed sentiments in the sector. The US markets despite remaining lackluster posted modest gains in the last session and the Dow reached another new record closing high.

Back home, Finance Minister Arun Jaitley has said that the GST Council, at its next meeting later this week, will finalise a mechanism to operationalise anti-profiteering clause which seeks to protect consumers’ interest. GST Council comprising state finance minister will meet on August 5 to take stock of implementation of GST which was rolled from July 1. Meanwhile, the market breadth indicating the overall health of the market was strong, with 1,107 shares gaining and 892 shares declining, while a total of 120 shares were unchanged.

The BSE Sensex is currently trading at 32589.58, up by 14.41 points or 0.04% after trading in a range of 32582.09 and 32686.48. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index slipped 0.24%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Utilities up by 0.69%, Telecom up by 0.66%, Realty up by 0.63%, Consumer Durables up by 0.62% and Power was up by 0.58%, while Capital Goods down by 0.51%, FMCG down by 0.50%, Metal down by 0.47%, Oil & Gas down by 0.15% and Industrials down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.67%, NTPC up by 2.24%, Lupin up by 1.57%, Bharti Airtel up by 0.71% and Reliance Industries up by 0.54%. On the flip side, Larsen & Toubro down by 1.05%, Dr. Reddys Lab down by 0.81%, Hindustan Unilever down by 0.79%, ONGC down by 0.72% and Bajaj Auto down by 0.71% were the top losers.

Meanwhile, asserting that the slowdown in the growth of the BRICS economies is not much of a concern, Organisation for Economic Cooperation and Development’s (OECD) development center deputy director, Federico Bonaglia has said India and China continue to maintain a very sustained growth. He added that BRICS countries will continue to play a key role in the global economy eventhough they reported slower growth in recent years.

Bonaglia also said that India and China are projected to expand their gross domestic product (GDP) by more than 6 percent. He added that India is the only BRICS country that has not experienced a slowdown in the past few years, with a growth rate of around 8 percent in 2015 and 7.7 percent projected for 2018. Besides, both Russia and Brazil are expected to catch up on growth next year. Brazil and Russia are poised for economic recovery. The Brazilian economy contracted 4 percent in 2015 and 3.6 percent in 2016. However, the outlook for South Africa remains clouded, who put the country’s growth rate for 2017-2018 at 1 percent.

OECD further said that BRICS economies play a very important role by injecting dynamism into the world economy. Moreover, in 2000, the BRICS represented 40 percent of the GDP. In 2010, they represented over 50 percent and in 2015 they reached 54.7 percent of world GDP. OECD however noted that despite this strong progress, the BRICS face challenges in terms of productivity growth and innovation.

The CNX Nifty is currently trading at 10109.10, down by 5.55 points or 0.05% after trading in a range of 10105.55 and 10137.85. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 2.58%, NTPC up by 2.06%, Lupin up by 1.58%, Bosch up by 0.95% and HCL Tech up by 0.80%. On the flip side, Indiabulls Housing down by 1.63%, Larsen & Toubro down by 1.15%, Dr. Reddys Lab down by 1.01%, ONGC down by 0.84% and Hindustan Unilever down by 0.83% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite rose 1.77 points or 0.05% to 3,294.41, FTSE Bursa Malaysia KLCI gained 4.46 points or 0.25% to 1,769.59, KOSPI Index advanced 6.86 points or 0.28% to 2,429.82, Taiwan Weighted surged 76.61 points or 0.73% to 10,513.90, Nikkei 225 added 113.02 points or 0.57% to 20,098.81 and Hang Seng was up by 127.16 points or 0.46% to 27,667.39.

On the flip side, Jakarta Composite was down by 9.85 points or 0.17% to 5,795.35.