Local bourses add some gains in afternoon deals

Adding some gains, Indian equity benchmarks continued their trade in green in early afternoon session, on the back of buying by funds and retail investors. The sentiments were positive with ICRA’s report highlighting that the economic expansion in terms of gross value added (GVA) is expected to improve to 6.3% in the three months to September from 5.6% in the previous quarter, on the back of a rise in industrial growth. Headline GVA growth, however, is likely to trail the 6.8% recorded in the second quarter of FY17. Some support also came with the reports that the government has set up a 14-member panel to identify and suggest ways to address issues faced in implementation of the law. Moreover, firmness in Asian stocks along with appreciation in Indian rupee against dollars too supported the domestic bourses. In scrip specific development, Ramco Systems was up by over two percent after inking a multi-million dollar repeat order with LBC Express Inc., Philippines to unify and automate LBC’s logistics and supply chain operations across its 1,300 global branches and 121 warehouses.

On the global front, Asian markets were trading in green, as strong world growth and rising corporate profits lured hordes of investors into equities, while oil prices jumped on expectations of a production cut. Back home, the BSE Sensex is currently trading at 33565.10, up by 86.75 points or 0.26% after trading in a range of 33465.23 and 33624.49. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.14%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Realty up by 1.05%, Auto up by 0.62%, Consumer Disc up by 0.56%, Industrials up by 0.53% and Consumer Durables up by 0.27%, while Telecom down by 0.78%, Metal down by 0.32%, Energy down by 0.28%, Healthcare down by 0.21% and Power down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.83%, Adani Ports & SEZ up by 1.79%, HDFC up by 1.51%, Bajaj Auto up by 1.43% and Mahindra & Mahindra up by 1.24%. On the flip side, Dr. Reddy’s Lab down by 1.46%, Axis Bank down by 0.67%, Kotak Mahindra Bank down by 0.65%, Bharti Airtel down by 0.61% and ICICI Bank down by 0.45% were the top losers.

Meanwhile, domestic rating agency, ICRA in its latest report has said that India's economic growth rate in terms of Gross Value Added (GVA) is expected to improve to 6.3% in July-September quarter (Q2FY18) from 5.6% in the first quarter of FY18, on the back of a broad-based pickup in industrial growth, even as agriculture, forestry and fishing and services are likely to moderate. However, it noted that headline GVA growth is likely to trail the 6.8% recorded in the Q2FY17. 

As per the report, industrial growth improved to over 5.8% in Q2 from 1.6% in the first quarter. It said that improved corporate earnings, partly reflecting milder discounts and higher commodity prices, and a pick-up in mining and electricity, are expected to contribute to a sequential recovery in GVA growth in Q2FY18, offsetting the moderation in government spends and a tepid kharif harvest for several crops. It also pointed out that the significant turnaround in mining, a favourable base-effect, and supportive commodity prices, should boost mining and quarrying sub-sectors to a healthy 7.5% in the quarter. It added that electricity generation also recorded an improvement led by the thermal segment.

However, the rating agency said that the activity in the real estate sector remains subdued on account of weak consumer sentiment, led by factors such as the note-ban-led drag, full implementation of the Real Estate (Regulation and Development) Act and Goods and Services Tax (GST) regime. It pointed that this will cap construction sector remaining low at near 2.5% in the quarter.  It also expects that growth in the services sector to ease to 7.3% in Q2 from 8.7% in the first quarter.

The report further mentioned that government's non-interest revenue spend slid sharply to 0.8% in Q2 from 26.8% in Q1, reflecting the waning effect of front-loading of spending. However, it noted that available data for 12 states indicates a pickup in their revenue spend increased to 14.1% in Q2 from 10.7% in Q1. It also expects that GVA growth in public administration and defence to ease to around 6.3% from 9.5% in Q1, weighing upon the overall GVA expansion.

The CNX Nifty is currently trading at 10343.30, up by 16.40 points or 0.16% after trading in a range of 10309.55 and 10368.70. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.31%, Tata Motors up by 2.03%, Adani Ports & SEZ up by 1.97%, Mahindra & Mahindra up by 1.41% and HDFC up by 1.39%. On the flip side, Tech Mahindra down by 2.10%, Bajaj Finance down by 2.06%, Bharti Infratel down by 1.68%, Dr. Reddy’s Lab down by 1.47% and UPL down by 1.31% were the top losers.

All the Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 4.47 points or 0.26% to 1,725.15, Shanghai Composite rose 8.55 points or 0.25% to 3,419.05, KOSPI Index added 9.81 points or 0.39% to 2,540.51, Jakarta Composite was up by 33.11 points or 0.55% to 6,064.97, Taiwan Weighted surged 43.35 points or 0.4% to 10,822.59, Nikkei 225 increased 106.67 points or 0.48% to 22,523.15 and Hang Seng increased 162.51 points or 0.55% to 29,980.58.