Benchmarks trade slightly in green in early deals

Indian equity benchmarks made an optimistic start and are trading with a gain of around quarter a percent in early deals on Friday, as traders took some encouragement with India Ratings and Research’s projection that the country’s economic growth will improve to 7.1 percent in the next fiscal year 2018-19 from 6.5 percent in the current year 2017-18. It said that the growth will be supported by robust consumption demand and low commodity prices. Traders reacted positively on report that GST Council decided to cut tax rates on 29 products and 53 services, in what is seen as the biggest overhaul since the launch of GST. Finance Minister Arun Jaitley also said that the panel at its next meeting may also consider bringing under the Goods and Services Tax (GST) purview items like petroleum and real estate which are currently outside the new regime.

Global cues too remained supportive with Asian counters trading mostly in green, though investors continue to monitor the possibility of a US government shutdown, with federal spending authority set to expire Friday. The US markets gave up some ground in the last session on concerns about a potential government shutdown.

Back home, in a pre-Budget meeting with Finance Minister Arun Jaitley, State ministers called for higher budgetary allocations and also offered suggestions on fiscal policy. In scrip specific development, Tata Steel gained on raising $1.3 billion through bonds in international markets, while Yes Bank edged higher on entering into pact with Amplus Energy Solution.

The BSE Sensex is currently trading at 35356.68, up by 96.39 points or 0.27% after trading in a range of 35221.16 and 35390.87. 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 0.22%, while Small cap index was up by 0.37%.

The top gaining sectoral indices on the BSE were Energy up by 0.66%, PSU up by 0.60%, Industrials up by 0.56%, Realty up by 0.55% and Capital Goods up by 0.49%, while Telecom down by 0.74%, TECK down by 0.60%, IT down by 0.48% and Utilities was down by 0.14% were the few losing indices on BSE.

The top gainers on the Sensex were Adani Ports up by 2.97%, SBI up by 1.54%, Yes Bank up by 1.44%, Reliance Industries up by 1.06% and Larsen & Toubro up by 0.85%. On the flip side, Infosys down by 1.11%, Wipro down by 0.83%, ICICI Bank down by 0.75%, Asian Paints down by 0.74% and Hero MotoCorp down by 0.73% were the top losers.

Meanwhile, terming the Goods and Services Tax (GST) and insolvency law major drivers for the growth of Indian economy, the India Ratings and Research (Ind-Ra), a subsidiary of Fitch Ratings, has projected that the country's economic growth will improve to 7.1 percent in the next fiscal year 2018-19 from 6.5 percent in the current year 2017-18. It said that the growth will be supported by robust consumption demand and low commodity prices. But, it also said that for demonetisation and GST implementation, growth would not have decelerated to 7.1 percent in 2016-17 and 6.5 percent in 2017-18.

In its outlook for 2018-19, the rating agency said there will be a gradual pick-up in growth momentum owing to structural reforms like GST and Insolvency and Bankruptcy Code (IBC) in place. It added that while the implementation of GST is likely to benefit the economy over the medium to long term, the same cannot be said about the impact of demonetisation. It also expects with the global crude prices firming up, retail and wholesale inflation to come in at 4.6 percent and 4.4 percent, respectively in 2018-19, indicating an end to the current rate cut cycle. It further said there is still some fuzziness with respect to the intensity and the level of its future trajectory and added that the Reserve Bank of India (RBI) will remain in a pause mode for an extended period of time.

Ind-Ra expects fiscal deficit in 2017-18 likely to exceed the budgeted estimate of 3.2 percent and come in at 3.5 percent. The agency also expects fiscal deficit in 2018-19 to be at 3.2 percent, higher than 3 percent stated in the medium-term fiscal policy statement. Talking about the Budget, it said that despite 2018-19 being a pre-election year, it does not expect the Union Budget to be a populist budget. However, it expects some expenditure reallocation with an increased focus on the rural and agriculture sectors. On the currency front, it said that a mix of global and domestic factors will keep the Indian rupee range bound at average Rs 66.06/$ in 2018-19.

The CNX Nifty is currently trading at 10843.35, up by 26.35 points or 0.24% after trading in a range of 10793.90 and 10844.10. There were 25 stocks advancing against 24 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Adani Ports up by 2.81%, Indiabulls Housing up by 1.67%, SBI up by 1.57%, Yes Bank up by 1.39% and Reliance Industries up by 1.30%. On the flip side, Ultratech Cement down by 1.42%, GAIL India down by 1.39%, Zee Entertainment down by 1.34%, Aurobindo Pharma down by 1.24% and Infosys down by 1.10% were the top losers.

Asian markets are trading mostly in green; KOSPI Index rose 2.38 points or 0.09% to 2,518.19, FTSE Bursa Malaysia KLCI increased 3.05 points or 0.17% to 1,824.65, Nikkei 225 gained 10.92 points or 0.05% to 23,774.29, Shanghai Composite jumped 12.49 points or 0.36% to 3,487.24, Hang Seng added 32.27 points or 0.1% to 32,154.21 and Taiwan Weighted was up by 49.99 points or 0.45% to 11,121.56.

On the flip side, Jakarta Composite was down by 25.62 points or 0.4% to 6,447.04.