Benchmarks trade in fine fettle in early deals

Indian equity benchmarks made positive start and are trading in fine fettle in early deals on Wednesday, as traders took some encouragement with a private report stating that business optimism index for the January-March quarter 2018 touched three and half year high on improving demand conditions and expectation that government sops in the budget will revive consumption. It further said that the upcoming Union Budget and assembly elections during 2018 might have generated optimism about government sops that could push revival in consumption. Some support also came with report that agricultural exports from India grew 18 per cent to $21 billion in the April-October 2017-18 period compared to just 5 per cent in 2016-17.

On the global front, Asian markets, pulling back from record highs, are trading mostly in red at this point of time following declines in US counterparts. Many traders are questioning the pace of gains in equity markets at the start of 2018 as the earnings season ramps up. The US markets deposing their early gains ended lower in the last session, some profit taking contributed to the pullback by stocks, although the decline was relatively subdued compared to the recent strength.

Back home, shares of information technology (IT) companies continued their upward movement with Nifty IT index hit fresh 52-week high in otherwise subdued market. In scrip specific developments, BPCL edged higher on raising Rs 750 crore on private placement basis, while Bank of Baroda surged on tying-up with Invoicemart.

The BSE Sensex is currently trading at 34877.78, up by 106.73 points or 0.31% after trading in a range of 34700.82 and 34882.87. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.41%, while Small cap index was down by 0.89%.

The top gaining sectoral indices on the BSE were IT up by 1.85%, TECK up by 1.51%, Bankex up by 0.52%, Telecom up by 0.23% and PSU was up by 0.05%, while Consumer Durables down by 1.15%, Realty down by 0.95%, Consumer Discretionary Goods & Services down by 0.60%, Industrials down by 0.45% and Auto was down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.95%, Adani Ports up by 2.46%, TCS up by 2.13%, Axis Bank up by 2.12% and ICICI Bank up by 1.87%. On the flip side, Hero MotoCorp down by 1.21%, Tata Motors down by 1.04%, Tata Motors - DVR down by 0.88%, Asian Paints down by 0.87% and Wipro down by 0.81% were the top losers.

Meanwhile, highlighting the benefits of economic reforms, the Fitch group company, BMI Research in its latest report has said that India and Indonesia are expected to witness a pickup in headline real economic growth in 2018. Terming 2017 as an impressive year of growth, it said that 10 out of 14 Asia Pacific economies saw their real GDP growth rates increase in year-on-year terms. For 2018, they have forecasted just two countries - India and Indonesia - to experience a pick-up in real GDP growth. It added that a majority of Asian economies barring India and Indonesia will see their growth rates slow slightly this year.

According to the report, India’s real gross domestic product (GDP) growth is expected to hit 6.7% in the year 2018 from 6.4% in 2017 as the country recovers from the transitory impact of its newly implemented goods and services (GST) system which was rolled out in July 2017 coupled with various economic reforms. It added that recapitalisation plan for public sector banks will lead to increased investment growth and economic activity over the coming quarters. Besides, Indonesia is anticipated as another regional outperformer with real GDP growth to rise to 5.3% in 2018.

BMI Research also noted that the pick-up in economic growth in India and Indonesia over the coming quarters will be driven by continued progress of economic reforms and improvements to the still- challenging business environment. However, risk to this outlook is increasing oil prices, which is a ‘bane’ for both India and Indonesia. It also pointed that both countries will be going for state elections in 2018 and general elections in 2019, which could result in an uncertain investment climate.

The CNX Nifty is currently trading at 10733.00, up by 32.55 points or 0.30% after trading in a range of 10666.75 and 10735.05. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Infosys up by 3.18%, TCS up by 2.11%, Adani Ports up by 2.00%, ICICI Bank up by 1.95% and Axis Bank up by 1.47%. On the flip side, GAIL India down by 1.26%, Tata Motors down by 1.16%, Indian Oil Corporation down by 1.11%, Hero MotoCorp down by 0.97% and Wipro down by 0.84% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 180.7 points or 0.57% to 31,724.05, Nikkei 225 declined 175.84 points or 0.73% to 23,775.97, Taiwan Weighted shed 18.62 points or 0.17% to 10,967.49, KOSPI Index dropped 12.66 points or 0.5% to 2,509.08 and FTSE Bursa Malaysia KLCI was down by 2.15 points or 0.12% to 1,823.88.

On the flip side, Shanghai Composite increased 0.07 points to 3,436.66 and Jakarta Composite was up by 3.48 points or 0.05% to 6,433.17.