Benchmarks trade with modest gains in morning session

Indian equity benchmarks continued their trade in green in morning session on account of buying in front line blue chip counters. The rupee opened up against dollar on account of selling of American currency from banks and exporters. As per provisional data released by the stock exchanges, Foreign Portfolio Investors (FPIs) bought shares worth a net of Rs 692.83 crore on Monday. Domestic Institutional Investors (DIIs) sold shares worth a net Rs 206.30 crore. 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. Separately, attributing the continuing slowdown to the after-effects of the demonetization exercise, the Goods and Services Tax (GST) implementation and weakness in agriculture, rating agency, CRISIL in its latest report has maintained its projection of India’s economic growth in 2018-19 to 7.6%. The report added that given the low base and the expected waning of the GST impacts going ahead, it retains forecast of 7.6% real GDP growth in fiscal 2019, with private consumption leading the recovery.

Meanwhile, investors took note of SBI report that India needs to urgently raise its tax base to meet the fiscal deficit target without curbing essential expenditure. The report - ‘India's Public Finance Trends’ said that the country’s gross fiscal deficit as percentage of GDP, started shooting up after the 2008 financial crisis. However, with economic recovery gaining pace, the government embarked on the path of fiscal consolidation and has brought down its fiscal deficit to 3.5% of GDP in 2016-17. Select stocks in fast-moving consumer goods (FMCG) were buzzing in today’s trade on private report 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. With a few state elections and expected populist budget, the rural sector is anticipated to be a prime beneficiary. Select stocks in housing loans and banking space were under pressure after a report flagged concerns about the growing delinquencies in affordable housing segment. A joint report by Moody’s and its domestic affiliate ICRA enlightened that competitive pressures and larger exposure to the self-employed are the prime reasons for the build-up of stress in the segment.

Traders were seen piling up position in Realty, Energy and Consumer Durables stocks, while selling was witnessed in Capital Goods, TECK and IT sector stocks. In scrip specific development, Electrosteel Steels was locked at upper circuit on report that Anil Agarwal’s Vedanta has submitted the highest bid for bankrupt company, ahead of a Tata Group bid. The other bidders were Renaissance Group promoted by Abhishek Dalmia and an overseas fund backed by Edelweiss. Cigarette stocks were 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.

On the global front, the Asian markets were trading mostly in red, while the yen stole the currency spotlight and jumped after the Bank of Japan’s slight reduction to its bond purchases reminded investors that it will eventually normalize policy. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 34,400 and 10,600 levels respectively. The market breadth on BSE was positive in the ratio of 1401:1186, while 101 scrips remained unchanged.

The BSE Sensex is currently trading at 34415.97, up by 63.18 points or 0.18% after trading in a range of 34343.41 and 34487.52. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.10%, while Small cap index was up by 0.28%.

The top gaining sectoral indices on the BSE were Realty up by 1.83%, Energy up by 1.13%, Consumer Durables up by 0.59%, Metal up by 0.58% and PSU up by 0.54%, while Capital Goods down by 0.27%, TECK down by 0.23%, IT down by 0.16%, Telecom down by 0.15% and Basic Materials down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 5.49%, Tata Motors - DVR up by 2.26%, Tata Motors up by 1.84%, Reliance Industries up by 1.55% and Tata Steel up by 1.01%.

On the flip side, ICICI Bank down by 0.75%, Wipro down by 0.66%, Asian Paints down by 0.64%, Bajaj Auto down by 0.62% and Adani Ports & Special Economic Zone down by 0.58% were the top losers.

Meanwhile, 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. It added that a strategy was being prepared to increase the share of international trade in India’s GDP.

Union Commerce Minister Suresh Prabhu said he has sought the views of States on the issue, which was discussed during the third meeting of Council for Trade Development and Promotion. He further said “We are thinking of ideas whereby we can incentivise the States which promote exports. I have mooted this idea before the States and asked them to give their ideas on this”.

He said if the GDP of States rises, it will push the country’s growth, adding that the focus should also be on districts’ GDP, which in turn would fuel the nation’s economy. He said that we will have to work with NITI Aayog for this and added that we had also asked States to appoint at least one nodal officer in charge of exports. They said for this, they would need experts, not bureaucrats. So, we are looking into that.

Prabhu added that we are in the process of preparing a strategy for at least 40% of India’s GDP which will happen in next 7-8 years to come from global trade, and at least half of that should be from exports. The country's merchandise exports during April-November 2017-18 increased by 12.01 per cent to $ 196.48 billion.

The CNX Nifty is currently trading at 10632.20, up by 8.60 points or 0.08% after trading in a range of 10607.90 and 10659.15. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Coal India up by 5.64%, Tata Motors up by 1.95%, Reliance Industries up by 1.52%, Tata Steel up by 1.07% and SBI up by 0.77%.

On the flip side, Zee Entertainment down by 1.51%, Eicher Motors down by 1.46%, HCL Tech down by 1.19%, HPCL down by 1.10% and Bajaj Auto down by 0.87% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 28.66 points or 0.26% to 10,887.09, Jakarta Composite decreased 15.11 points or 0.24% to 6,370.29, KOSPI Index decreased 4.04 points or 0.16% to 2,509.24 and FTSE Bursa Malaysia KLCI decreased 2.01 points or 0.11% to 1,830.14.

On the other hand, Shanghai Composite increased 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 increased 116.91 points or 0.49% to 23,831.44.