Bourses pare gains in late morning session

Indian equity benchmarks pared some of their gains in late morning session but were trading in green territory, aided by buying in Consumer Durables, FMCG and Basic Materials stocks. Sentiments remained upbeat with RBI Governor Urjit Patel’s statement that their projections based on high frequency real economy indicators suggest that growth will pick up in the third and fourth quarters (of the current fiscal year) to above 7 percent. Besides, Union minister for IT and Law and Justice Ravi Shankar Prasad’s stating that the slowdown in the economic growth in Q1 of 2017-18 (April-June) is transitory and that will definitely pick-up pace in the next quarter as the macro fundamentals are strong, also provided the support to the indices. However, the markets pared gains as cautiousness spread among the investors as the earnings season for the July-September quarter kicks off this week.

On the global front, Asian markets were trading mixed following last week's surprising fall in US jobs. Besides, investors took note of the mixed cues from Wall Street as well as the lackluster service sector data from China. Back home, in scrip specific development, Axis Bank was trading higher after the bank completed the acquisition of Freecharge for a cash consideration of Rs 373.27 crore, on a cash-free, debt-free basis. The Bank has received approval for the same from Reserve Bank of India.

The BSE Sensex is currently trading at 31850.16, up by 35.94 points or 0.11% after trading in a range of 31781.75 and 31935.63. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.07%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.45%, FMCG up by 0.46%, Consumer Disc up by 0.33%, Basic Materials up by 0.30% and IT up by 0.30%, while Utilities down by 0.79%, Power down by 0.69%, Oil & Gas down by 0.69%, PSU down by 0.56% and Energy down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.94%, Coal India up by 1.21%, Hindustan Unilever up by 0.83%, Cipla up by 0.76% and Tata Motors up by 0.64%. On the flip side, Power Grid Corporation down by 2.12%, ONGC down by 1.04%, Bharti Airtel down by 0.65%, Reliance Industries down by 0.49% and Adani Ports & SEZ down by 0.49% were the top losers.

Meanwhile, trying to deflect the criticism arising from the sharp fall in India's gross domestic product (GDP) growth numbers, Union minister for IT and Law and Justice Ravi Shankar Prasad has said that slowdown in the economic growth in Q1 of 2017-18 (April-June) is transitory and that will definitely pick-up pace in the next quarter as the macro fundamentals are strong.

The minister further highlighted that the country posted a 7.5 percent growth in 2014-15, 8 percent in 2015-16 and 7.1 percent in 2016-17. He also noted that only in one quarter that is the first quarter of the current fiscal, GDP growth rate slowed to 5.7%. Attributing the lower growth rates to the shake-up of the economy arising from Goods and Services Tax (GST) rollout, he said “When we build a bridge, we need to divert traffic, which leads to long queues of vehicles. But that is temporary, as things get normalised once the bridge is opened.” He added that just like that, the GST is a new regime which led to a shake-up.

Asked about the timing of the tax cuts announced by the GST Council, which mostly benefit the poll-bound Gujarat, Prasad said that government has always been open to such changes in GST rates as it is not an authoritarian government. Adding further, he said that this is a massive tax reform implemented in such a large country, so, if there is need for changes, why not.

The CNX Nifty is currently trading at 9987.30, up by 7.60 points or 0.08% after trading in a range of 9959.45 and 10015.75. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 1.99%, Coal India up by 1.16%, Indusind Bank up by 1.04%, Ultratech Cement up by 0.90% and Cipla up by 0.80%. On the flip side, Power Grid Corporation down by 2.15%, Aurobindo Pharma down by 1.27%, GAIL India down by 1.17%, ONGC down by 1.06% and HPCL down by 0.97% were the top losers.

Asian markets were trading mixed; Jakarta Composite increased 16.1 points or 0.27% to 5,921.48 and Shanghai Composite increased 33.63 points or 1% to 3,382.58. On the flip side, Hang Seng decreased 112.62 points or 0.4% to 28,345.42 and FTSE Bursa Malaysia KLCI decreased 0.02 points or 0% to 1,763.98.