Local bourses continue to trade higher in a tight range

Mirroring positive global cues, key benchmark indices continued to trade in a tight-band in early afternoon deals with gains of around half a percent. The sentiments continued to remain firm with Finance Minister Arun Jaitley’s statement that an upward trajectory is being projected for growth from the current quarter and as far as growth figures are concerned in the next few years, it will keep on improving. Some comfort also came with report that the newly constituted Economic Advisory Council to the Prime Minister (EAC-PM) wants the government to stick to its fiscal consolidation road map and has suggested that stimulus to the industry should not be at the cost of fiscal prudence. All the sectoral indices were trading higher on the BSE with Telecom and Metal stocks rising the most. However, some caution lingered in the market ahead of release of crucial macro-economic data- August IIP data and September CPI data, which are scheduled to be released later in the day. In scrip specific development, LT Food was up by over one and half percent after inaugurating Ready to Heat (RTH) facility in Houston to manufacture Organic Ready to Heat rice products.

On the global front, Asian markets were trading mostly in green, boosted by another record performance on Wall Street with confidence high heading into the earnings season. Back home, the BSE Sensex is currently trading at 31973.17, up by 139.18 points or 0.44% after trading in a range of 31813.67 and 31981.66. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.52%, while Small cap index was up by 0.76%.

The top gaining sectoral indices on the BSE were Telecom up by 1.90%, Metal up by 1.46%, FMCG up by 1.35%, Realty up by 1.04% and Healthcare up by 0.76%, while there were no losing indices on BSE sectoral front.

The top gainers on the Sensex were Sun Pharma up by 1.99%, Reliance Industries up by 1.50%, Hindustan Unilever up by 1.43%, Mahindra & Mahindra up by 1.27% and NTPC up by 1.20%. On the flip side, Coal India down by 0.79%, Tata Motors down by 0.72%, Infosys down by 0.71%, Asian Paints down by 0.67% and Bharti Airtel down by 0.64% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that profit pressure of textiles exporters is likely to reduce by third quarter of fiscal year 2017-18, with easing prices of cotton from mid-September 2017 onwards. It pointed out that the pressures being observed on profitability, debt levels across the sector are likely to fall with the industry focusing on sweating the existing assets and undertaking limited debt-funded capacity additions. It also noted that since the past few months, the exporters are facing multiple headwinds, which have led to constrained growth as well as pressures on profitability.

Adding further, the rating agency has said that textile exporters have been facing subdued demand trends in the key importing countries as well as competitive pressures from Bangladesh and Vietnam over the past few years. Apart from this, it observed that unfavorable currency exchange rate fluctuations, high raw material prices in the past 6-9 months coupled with recent revision in duty drawback rates have also added to their woes. It also stated that pressures on textile exporters have become more severe with strengthening of Indian rupee against currencies of key competing nations during the current calendar year, which reduced competitiveness of Indian exporters from their counterparts.

With exports accounting for more than one-third of the Indian textile market, the report stated that this is a matter of concern, even as there is a large domestic market. It also highlighted that the slowdown in apparels segment has mainly been on account of subdued demand conditions in key textile-consuming regions of the US and European Union, which account for a majority of exports from India. Besides, it noted that cotton-yarn exports have been under pressure largely due to decline in demand from China, which used to account for more than 40 percent of total cotton yarn exports from India till last year. It added that cotton yarn exports accounted for only 17 percent of the total in the first four months of FY18.

The CNX Nifty is currently trading at 10032.85, up by 48.05 points or 0.48% after trading in a range of 9977.10 and 10037.05. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 6.00%, Hindalco up by 5.09%, Aurobindo Pharma up by 1.98%, Sun Pharma up by 1.96% and Vedanta up by 1.83%. On the flip side, Ultratech Cement down by 1.42%, Tata Motors down by 0.94%, Asian Paints down by 0.79%, Infosys down by 0.73% and SBI down by 0.68% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 16.6 points or 0.68% to 2,474.76, Jakarta Composite surged 31.13 points or 0.53% to 5,913.91, Taiwan Weighted was up by 70.25 points or 0.66% to 10,711.44, Nikkei 225 added 73.45 points or 0.35% to 20,954.72 and Hang Seng rose 96.02 points or 0.34% to 28,485.59.

On the flip side, Shanghai Composite decreased 8.62 points or 0.25% to 3,379.67 and FTSE Bursa Malaysia KLCI was down by 2.71 points or 0.15% to 1,754.50.