Benchmarks trade slightly in green in early deals

Indian equity benchmarks have made a positive start and are trading with marginal gains in early deals on Tuesday. Traders took some encouragement with industry body Assocham’s Year-Ahead Outlook report, which has said that India's economic growth may touch 7 percent next year as the government’s policies tilt towards the country's stress-ridden rural landscape in the penultimate year before the 2019 general elections. It said that against GDP growth of 6.3 percent in the second quarter of 2017-18, the economic expansion may reach the crucial 7 percent mark by the end of September 2018 quarter, while inflation may range between 4 to 5.5 percent towards the second half of the next calendar year with the monsoon being a key imponderable. Some support also came from a private report stating that Indian economy is expected to witness sharp recovery in the January-March quarter and its GDP growth likely to be around 7.5 per cent for 2018. However, gains remained capped on report that foreign investors have pulled out Rs 7,300 crore from the country’s stock markets this month so far, primarily due to rising crude prices and widening fiscal deficit.

On the global front, most of the Asian markets are not trading today and those which are opened are exhibiting mixed trend. The US markets made a modestly lower closing in the last session, while the major averages remained much of the day in red shrugging off the slew of some positive U.S. economic data.

Back home, banking stocks remained in focus, as dismissing rumours, both the government and the Reserve Bank has said there was no question of closure of any public sector bank. In scrip specific development, BHEL gained on bagging Rs 672 crore order for electrics for 25 kV Mainline EMU Trains, while Welspun Corp edged higher on bagging order for supply of 124K MTs pipes.

The BSE Sensex is currently trading at 33965.40, up by 25.10 points or 0.07% after trading in a range of 33925.20 and 34005.37. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.39%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Realty up by 1.10%, Metal up by 0.81%, Oil & Gas up by 0.72%, Basic Materials up by 0.61% and Healthcare was up by 0.50%, while Bankex down by 0.16% was the lone losing index on the BSE.

The top gainers on the Sensex were ONGC up by 1.58%, Dr. Reddys Lab up by 0.98%, Asian Paints up by 0.75%, Tata Steel up by 0.74% and TCS up by 0.64%. On the flip side, Coal India down by 0.83%, ICICI Bank down by 0.70%, SBI down by 0.67%, Infosys down by 0.61% and Mahindra & Mahindra down by 0.46% were the top losers.

Meanwhile, the industry chamber Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest Year-Ahead Outlook has said that Indian economy is likely to touch 7% growth in 2018 with the government policies tilting towards the country's stress-ridden rural landscape in the penultimate year before the 2019 general elections. The report stated that against Gross Domestic Product (GDP) growth of 6.3% in the second quarter of 2017-18, the economic expansion may reach the crucial 7% mark by the end of September 2018 quarter, while inflation may range between 4-5.5% towards the second half of the next calendar year with the monsoon being a key imponderable.

ASSOCHAM has said that its projections for the 7% GDP growth are based upon the assumption of stability in the government policies, good Monsoon, pick-up in industrial activity and credit growth and stable foreign exchange rates. It added that the coming budget is expected to be heavily tilted towards the farmers while the industrial focus will be on the sectors which create jobs. Highlighting that the stress in the agriculture sector is traceable to lack of reforms in the rural economy, it said a realisation seems to be dawning that growth per se is not enough, the benefits must be seen in the form of higher employment and added that the year 2018 would see policies in this direction. Besides, it also said that the import-export policies for the agri products need to be revisited to help growers realise better prices.

The Year-Ahead Outlook pointed out that in the run-up to the state assembly elections in several politically important states like Karnataka, Rajasthan, Chhattisgarh and Madhya Pradesh, after the high stake Gujarat polls, the political economy is set to tilt towards the farm sector which has been witnessing some stress. The report stated that the external sector should continue to do well, with merchandise exports further gaining on the back of smart recovery being witnessed in the US and other important economies. Despite pressure on IT and ITeS exports, the services exports too should remain robust and the overall current account balance would remain well within the manageable limits with rupee continuing to remain steady. It added that the current account deficit may remain well below 2%. However, according to the industry chamber, the underlying bullish sentiment should continue to prevail in the Indian stock market in 2018, the returns on equity may not be as robust as in 2017.

The CNX Nifty is currently trading at 10502.90, up by 9.90 points or 0.09% after trading in a range of 10486.10 and 10515.10. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Bosch up by 2.53%, ONGC up by 1.60%, Vedanta up by 1.37%, GAIL India up by 1.34% and Dr. Reddys Lab up by 1.01%. On the flip side, Coal India down by 0.79%, ICICI Bank down by 0.76%, SBI down by 0.66%, Infosys down by 0.62% and Hero MotoCorp down by 0.58% were the top losers.

Asian markets trading mixed; Taiwan Weighted declined 101.43 points or 0.96% to 10,421.06, Nikkei 225 decreased 22.82 points or 0.1% to 22,916.36 and FTSE Bursa Malaysia KLCI was down by 4.81 points or 0.27% to 1,755.43.

On the flip side, Shanghai Composite increased 5.95 points or 0.18% to 3,286.41 and KOSPI Index was up by 7.98 points or 0.33% to 2,448.52.