Markets trim some gains but remain in green territory

Indian equity benchmarks trimmed some of their gains in late morning session but were still trading in green territory, as investors took support from the report stating that the Nikkei India Services Purchasing Managers' Index rose to 47.5 in August from July's 45.9. Some support also came with Prime Minister Narendra Modi’s statement at BRICS Summit 2017 that India is fast changing into one of the most open economies in the world, with improvements on global indices and the biggest ever reform GST weaving the nation into one unified market. However, the markets lost some gains as CRISIL lowered India’s Gross Domestic Product (GDP) growth forecast for 2017-18 to 7 percent from 7.4 percent forecasted earlier. The forecast has been scaled down as it believes GST- related disruptions will continue to impact the economy for a few more quarters because there are uncertainties around the possibility of changes to the given tax structure and as businesses adjust to this new regime.

On the global front, Asian markets were trading mixed amid geopolitical tensions. Tensions on the Korean Peninsula remained in focus even as markets recovered slightly. Back home, in scrip specific development, Wipro traded higher after the company launched its newest digital pod in Edinburgh, Scotland, deepening its commitment to offer digital services at close proximity to its UK and European customers. The Edinburgh Pod is purpose-built for Wipro’s digital strategy, design and engineering teams to work in a collaborative and adaptive workspace, along with clients.

The BSE Sensex is currently trading at 31776.02, up by 73.77 points or 0.23% after trading in a range of 31722.61 and 31819.99. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index was up by 0.85%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.81%, Realty up by 1.17%, Energy up by 0.82%, Consumer Disc up by 0.77% and Basic Materials up by 0.76%, while Telecom down by 2.24% and TECK down by 0.30% were the only losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.57%, Reliance Industries up by 1.30%, Asian Paints up by 1.07%, Dr. Reddy’s Lab up by 0.68% and Tata Steel up by 0.65%. On the flip side, Bharti Airtel down by 3.33%, Sun Pharma down by 0.67%, Mahindra & Mahindra down by 0.62%, Lupin down by 0.50% and Coal India down by 0.39% were the top losers.

Meanwhile, global ratings agency, CRISIL has lowered India’s Gross Domestic Product (GDP) growth forecast for 2017-18 to 7 percent from 7.4 percent forecasted earlier. The forecast has been scaled down as it believes GST- related disruptions will continue to impact the economy for a few more quarters because there are uncertainties around the possibility of changes to the given tax structure and as businesses adjust to this new regime.

In April-June quarter of FY18, economic growth unexpectedly slowed to 5.7 percent, the slowest pace in three years and the country lost the tag of the world’s fastest-growing large economy to China. Therefore, the report pointed out that the current year will see some more headwinds in the form of GST related disruptions, even as the economy tries to recover from the impact of demonitisation announced last November. It noted that the 7 percent growth forecast implies a GDP growth of 7.4 per cent in the remaining three-quarters and is still higher than the reading by most other analysts which are all under 7 percent.

As per the report, the economy can only grind its way up in an environment of subdued global growth and weak domestic investments because the benefits of low commodity prices till last year may not be available this year and hence the bottom line may remain under pressure. On the external front, it felt that though global growth prospects appear somewhat better relative to 2016, factors like the falling trade growth, rising geopolitical risks and uncertainties surrounding the pace of normalisation of monetary policy in the advanced nations, along with rupee appreciation would mean contribution of exports to domestic economic growth would be limited. Besides, it cautioned that manufacturing growth could slow down to 7.6 percent in 2017-18 from 7.9 percent last fiscal year. However, it said that agricultural growth is expected to be buoyant. 

The CNX Nifty is currently trading at 9931.45, up by 18.60 points or 0.19% after trading in a range of 9912.75 and 9948.90. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.72%, Ultratech Cement up by 1.80%, Bajaj Auto up by 1.48%, Ambuja Cement up by 1.45% and Asian Paints up by 1.12%. On the flip side, Bharti Airtel down by 3.24%, Bharti Infratel down by 1.88%, Indiabulls Housing Finance down by 1.25%, Lupin down by 0.77% and Sun Pharma down by 0.74% were the top losers.

Asian markets were trading mixed; Shanghai Composite increased 3.92 points or 0.12% to 3,383.50, Hang Seng increased 22.64 points or 0.08% to 27,762.90 and Taiwan Weighted increased 47.97 points or 0.45% to 10,617.84.

On the flip side, Nikkei 225 decreased 125.86 points or 0.65% to 19,382.39, Jakarta Composite decreased 18.48 points or 0.32% to 5,795.27, FTSE Bursa Malaysia KLCI decreased 6.46 points or 0.36% to 1,766.70 and KOSPI Index decreased 2.61 points or 0.11% to 2,327.04.