Benchmarks trade slightly in green in morning deals

Extending their northward journey, Indian equity benchmarks made a positive start and are trading slightly in green in early deals on Tuesday. Traders took some support with report that the Commerce and Industry Ministry is mulling incentives for States that play a proactive role in promoting exports as it will help boost economic growth. However, gains remained capped with the rating agency Crisil attributing the continuing slowdown to the impacts of the demonetisation, GST implementation and weakness in agriculture, though it has maintained its FY19 growth estimate at 7.6 per cent on the low base. It also said that private consumption will grow 6.3 per cent in FY18, over a high base of an 8.7 per cent growth in FY17, and will remain the biggest contributor to GDP at 55.7 per cent.

On the global front, Asian markets after a positive start, turned mixed and trading with caution at this point of time. Though, Japanese market trading up by over half a percent as traders returned from a holiday following new all-time highs for U.S. shares. The US markets made mostly a positive closing in the last session, though trade remained choppy and lackluster, as traders expressed some uncertainty about the near-term outlook for the markets following the recent run to record highs.

Back home, most of the companies related to FMCG space edged higher with a private report stating that in the next 12 months, consumer goods companies would see a revival, both in volume and margin terms, with an anticipated revival in the rural sector. However, cigarette stocks exhibiting mixed trend, as in a setback to the cigarette and tobacco industry, the Supreme Court stayed a Karnataka High Court order quashing 85% pictorial warnings on packs containing such products.

The BSE Sensex is currently trading at 34421.39, up by 68.60 points or 0.20% after trading in a range of 34343.41 and 34487.52. There were 17 stocks advancing against 13 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.14%, while Small cap index was up by 0.14%.

The top gaining sectoral indices on the BSE were Realty up by 1.34%, Energy up by 0.88%, Consumer Durables up by 0.86%, Metal up by 0.77% and PSU was up by 0.38%, while Telecom down by 0.42%, TECK down by 0.33%, IT down by 0.23%, Capital Goods down by 0.23% and Power was down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 6.10%, Tata Motors - DVR up by 2.59%, Tata Motors up by 1.93%, Tata Steel up by 0.95% and Reliance Industries up by 0.89%. On the flip side, Wipro down by 0.74%, Larsen & Toubro down by 0.53%, Bajaj Auto down by 0.47%, Asian Paints down by 0.43% and ICICI Bank down by 0.35% were the top losers.

Meanwhile, after the Central Statistics Office (CSO) in its first advance estimates of GDP growth for current financial year estimated India’s agriculture sector growth rate at 2.1 percent, the Agriculture Ministry has said that India’s agriculture sector is expected to grow at a much higher rate than CSO estimate, on the back of better-than-expected production of Kharif and Rabi crops. The CSO had pegged farm and allied sector growth at 2.1 percent for 2017-18, much lower than 4.9 percent achieved in the 2016-17. The farm sector growth comprises gross value added (GVA) of crops at 60 percent, livestock 20 percent and forestry 8.5 percent and fishing and aquaculture at 5.5 percent.

The Ministry in its statement said that it is optimistic about achieving a high growth rate because the Rabi, 2017 is showing a very good performance in addition to good Kharif, 2017. Consequently, the agriculture sector can be expected to register a much higher GVA for the year 2017-18, when final estimate figures are released. With regards to Kharif crops, the ministry noted that the area coverage under different crops in Kharif as of August, 2017 was below that of the previous year on account of delay in onset of monsoons in some parts of the country. However, good rainfall thereafter helped the Ministry in increasing the area coverage in accordance with Kharif targets. It added that despite the delay in onset of monsoons and relatively poorer rainfall compared to the previous year, the area coverage under Kharif finally rose to 106.55 million against the five-year average of 105.86 million.

The Agriculture Ministry also said that the GVA estimate is bound to get corrected upwards, if increased area coverage by December 2017 and concomitant production estimate in case of foodgrains, oilseeds and commercial crops, in particular, are taken into account. It further said the livestock and fishery sector was very positive till August 2017 and by December the dominant crop sector has bounced back. If this amended and actual field situation are taken into account in computation of the GVA for agriculture sector as a whole, its growth rate can be estimated to be much higher. It also said rabi crops have been covered in an area of 58.6 million hectares, which is a very good progress. Considering that the rabi sowing continues up to first week of February, the total area under crops and resultant production will be very good.

The CNX Nifty is currently trading at 10626.80, up by 3.20 points or 0.03% after trading in a range of 10607.90 and 10659.15. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Coal India up by 6.44%, Tata Motors up by 2.02%, Reliance Industries up by 0.97%, Lupin up by 0.90% and Tata Steel up by 0.88%. On the flip side, Zee Entertainment down by 1.82%, Eicher Motors down by 1.34%, HPCL down by 1.18%, HCL Tech down by 1.10% and Wipro down by 0.79% were the top losers.

Asian markets are trading mixed; Shanghai Composite gained 2.76 points or 0.08% to 3,412.24, Hang Seng increased 114.79 points or 0.37% to 31,014.32 and Nikkei 225 up by 152.35 points or 0.64% to 23,866.88.

On the flip side, Taiwan Weighted shed 24.53 points or 0.22% to 10,891.22, Jakarta Composite decreased 8.92 points or 0.14% to 6,376.48, KOSPI Index slipped 2.47 points or 0.1% to 2,510.81 and FTSE Bursa Malaysia KLCI down by 1.99 points or 0.11% to 1,830.16.