Benchmarks trim gains; Nifty holds 10,200 mark

Indian equity benchmarks trimmed their gains but continued to trade in green in morning session on account of buying in front line blue chip counters. The rupee extended its gain for sixth consecutive session and was trading up against dollar on account of selling of American currency by banks and exporters coupled with record-setting domestic equities. Traders took some encouragement with Niti Aayog Vice Chairman Rajiv Kumar’s statement that economic slowdown that began in 2013-14 has bottomed out and the GDP is likely to grow 6.9 to 7 percent this fiscal and 7.5 percent in 2018-19. The Niti Aayog vice chairman said the country did very well from 2007-13 and the downward cycle started in 2013-14, mainly because of spurge in lending to undeserving projects since 2007. Some support also came on report that India’s exports recorded a robust growth of 25.67 percent to $28.61 billion in September, mainly on account of rise in shipments of engineering, chemicals, and petroleum products. Imports too rose by 18.09 percent to $37.59 billion in September from $31.83 billion in the year-ago month and the trade deficit narrowed to 7-month low of $8.98 billion in the month under review from $ 9.07 billion in September 2016.

Separately, IMF chief Christine Lagarde has said that Indian economy is on a very solid track in the mid-term, days after the International Monetary Fund lowered its growth forecast for the current and the next year. Describing the two major recent reforms in India - demonetization and Goods and Services Tax (GST) - as a monumental effort, Lagarde added that it is hardly surprising that there is a little bit of a short-term slowdown as a result. Investors took note of a poll report that the Nifty50 which rose to a fresh record high just ahead of Diwali week may come under pressure and could well move below 10,000 by December 2017. There is a sense of caution as valuations remain high and the recent macro data is raising questions on the stable macro picture which India had among other key emerging markets.

Traders were seen piling up position in Telecom, Metal and Basic Materials stock, while selling was witnessed in Energy sector stocks. In scrip specific development, Godrej Agrovet was trading firm after debuting on stock exchanges today successfully concluding the Initial Public Offer (IPO) last week. The Rs 1,157 crore IPO was a huge hit and oversubscribed 95.41 times during October 4-6. The portion meant for Qualified Institutional Buyers was oversubscribed 150.96 times, Non-institutional investors 236.04 times and Retail investors 7.67 times.

On the global front, Asian markets were trading mostly in green. China’s producer price inflation unexpectedly accelerated to a six-month high in September as a construction boom shows no signs of abating and a government crackdown on air pollution triggers fears of winter shortages and frenzied jumps in commodity prices. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 32,500 and 10,200 levels respectively. The market breadth on BSE was positive in the ratio of 1344:921, while 98 scrips remained unchanged.

The BSE Sensex is currently trading at 32570.49, up by 137.80 points or 0.42% after trading in a range of 32477.47 and 32687.32. There were 28 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.31%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Telecom up by 1.57%, Metal up by 1.56%, Basic Materials up by 0.94%, Auto up by 0.93% and Healthcare up by 0.78%, while Energy down by 0.39% was the sole losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 1.85%, Tata Motors up by 1.78%, Cipla up by 1.71%, Bharti Airtel up by 1.66% and Dr. Reddy’ Lab up by 1.62%.

On the flip side, Reliance Industries down by 1.17%, Axis Bank down by 1.03% and Wipro down by 0.60% were the top losers.

Meanwhile, days after the International Monetary Fund (IMF) pared India’s GDP growth projection for the year 2017 and 2018, its Managing Director Christine Lagarde has expressed confidence that the series of reforms like demonetisation and Goods and Services Tax (GST) regime have put country’s economy on a very solid track in the mid-term. Describing these structural reforms as ‘monumental effort’, she said that it is hardly surprising that here is a little bit of a short-term slowdown as a result, but for the medium term, they see a very solid track ahead for the Indian economy.

IMF chief further indicated that metrics of inflation, fiscal deficit and structural reforms would deliver jobs. She also said that they hope that the combination of fiscal, because the deficit has been reduced, inflation has been down significantly, and the structural reforms will actually deliver the jobs that the Indian population, particularly the young Indian people expect in the future.

Last week, the IMF in its latest flagship World Economic Outlook has lowered India’s Gross Domestic Product (GDP) growth forecast for 2017 by 0.5 percentage points to 6.7 percent, primarily because of the lingering impact of demonetisation as well as disruption caused by the goods and services tax (GST) regime. It has also trimmed the growth projection for 2018 to 7.4 percent from 7.7 percent forecasted earlier in April and June.

The CNX Nifty is currently trading at 10211.10, up by 43.65 points or 0.43% after trading in a range of 10206.05 and 10242.95. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.19%, Hindalco up by 1.91%, Bharti Infratel up by 1.86%, Aurobindo Pharma up by 1.81% and Mahindra & Mahindra up by 1.74%.

On the flip side, IndusInd Bank down by 1.89%, Reliance Industries down by 1.31%, Axis Bank down by 1.03%, Wipro down by 0.65% and Tech Mahindra down by 0.44% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 4.33 points or 0.18% to 2,477.95, Jakarta Composite increased 22.53 points or 0.38% to 5,946.65, Taiwan Weighted increased 36.58 points or 0.34% to 10,760.67, Nikkei 225 increased 152.05 points or 0.72% to 21,307.23 and Hang Seng increased 246.33 points or 0.87% to 28,722.76.

On the other hand, Shanghai Composite decreased 7.03 points or 0.21% to 3,383.50 and FTSE Bursa Malaysia KLCI decreased 3.17 points or 0.18% to 1,752.15.