Indian markets trade flat with positive bias

Indian equity benchmarks were trading flat with positive bias in early afternoon session, on account of buying in frontline blue chip counters. Traders were taking support with positive global cues and higher IT, TECK, Telecom and Consumer Durables stocks. Some support also came with Prime Minister Narendra Modi promising more economic reforms to further improve the ease of doing business in India as he invited Israeli companies to invest here. PM further noted that India is the fastest growing economy with FDI inflows at all time high. However, concerns over inflating trade deficit that soared to a three-year high on rising gold and crude oil import bill, restricted further gains. In the currency front, the rupee declined by 39 paise to 63.87 against the dollar in early trade on sustained dollar demand from importers and banks amid widening trade deficit. In scrip specific development, Trigyn Technologies surged by over nine and half percent after receiving contract from ARIPO Harare, Zimbabwe to provide technical support for ARIPO's Intellectual Property (IP) Software known as ‘POLite+’.

On the global front, Asian markets were trading mostly in green. A private poll showed that China’s economy is expected to cool this year as a government-led crackdown on debt risks and factory pollution drag on overall activity. Beijing is in the second year of a relentless campaign to wean China off its debt-heavy investment model, clamping down on everything from speculative property lending to shadow-bank financing activities as policy makers look to foster sustainable longer term growth.Back home, the BSE Sensex is currently trading at 34900.52, up by 57.01 points or 0.16% after trading in a range of 34759.88 and 34936.03. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.76%, while Small cap index was down by 1.08%.

The top gaining sectoral indices on the BSE were IT up by 3.35%, TECK up by 2.75%, Telecom up by 0.13% and Consumer Durables up by 0.04%, while Realty down by 1.82%, Metal down by 1.52%, Energy down by 1.46%, PSU down by 1.33% and Power down by 1.31% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 4.04%, Wipro up by 3.65%, TCS up by 3.56%, ICICI Bank up by 1.44% and Dr. Reddy’s Lab up by 1.39%. On the flip side, Coal India down by 1.90%, Reliance Industries down by 1.67%, Tata Motors down by 1.63%, Tata Steel down by 1.42% and Tata Motors - DVR down by 1.30% were the top losers.

Meanwhile, credit ratings agency, Crisil Ratings in its latest report has said that the government’s recent move to permit 100% foreign direct investment (FDI) in single-brand retail under the automatic route is expected to increase the market share of organised retail in India from 7% to 10% by financial year 2020. Before the change in rules, it had expected the market share of organised retailers to grow to 9% by fiscal 2020, based on healthy revenue growth of about 18% of organised brick and mortar (B&M) retailers.

As per the report, better operating environment for single-brand retail would also mean the pace of store additions will be faster than the annual 10-12%. It also pointed out that the effects of the government’s move will be more pronounced in apparel, luxury goods, home decor, footwear, and electronics, which make up about 45% of the organised retail revenues. It noted that global single-brand retailers facing growth headwinds in their key geographies will now be more than keen to peg a tent here and those already present can step up investments. It added that the previous sourcing norms were a bottleneck to scaling up of operations.

The ratings agency further said that while FDI approvals under the automatic route will lower the time to commence business, the relaxation of 30% local sourcing norms for the first five years by allowing inclusion of incremental sourcing for global operations will also provide sufficient time for new entrants to set up and stabilise their sourcing base. It stated that this could mean increase in competition for domestic organised brick and mortar retailers. However, more foreign retailers vending their ware will also lead to sharper focus on, and improvements in, supply chain efficiencies which will benefit the sector over the medium-term. It believes that healthy growth prospects for the sector and benefits of scale and focus on profitability, will help offset the impact of higher capital spending over the medium-term.

The CNX Nifty is currently trading at 10745.05, up by 3.50 points or 0.03% after trading in a range of 10705.20 and 10762.35. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 4.47%, Wipro up by 4.22%, Infosys up by 3.96%, TCS up by 3.64% and Tech Mahindra up by 3.08%. On the flip side, HPCL down by 2.03%, Coal India down by 2.01%, Bajaj Finance down by 1.91%, Vedanta down by 1.90% and Tata Motors down by 1.76% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 6.49 points or 0.19% to 3,416.98, KOSPI Index was up by 18.01 points or 0.72% to 2,521.74, Jakarta Composite rose 29.17 points or 0.46% to 6,411.37, Taiwan Weighted surged 29.8 points or 0.27% to 10,986.11, Nikkei 225 added 236.93 points or 1% to 23,951.81 and Hang Seng increased 417.51 points or 1.33% to 31,756.38.

On the flip side, FTSE Bursa Malaysia KLCI was down by 4.25 points or 0.23% to 1,821.66.