Firm global cues take Sensex beyond 36K level; Nifty conquers 11K mark

Indian equity benchmarks made an optimistic start and are trading jubilantly in early deals, with frontline gauges conquering their crucial 11,000 (Nifty) and 36,000 (Sensex) levels for the first time ever, tailing firm global cues. Sentiments remained up-beat on report that the International Monetary Fund (IMF) has revised its forecast for world economic growth in 2018 and 2019, saying sweeping US tax cuts were likely to boost investment in the world’s largest economy and help its main trading partners. Traders also took some encouragement from report that India has moved up on a global index of talent competitiveness to the 81st position, but remains a laggard among the BRICS nations.

Global cues too remained supportive with Asian markets trading mostly in green at this point of time as investors turn with optimism toward the earnings season after the U.S. government shutdown moved towards an end. The US markets ended higher on Monday, as traders did not pay much attention to the subsequent government shutdown but saw further upside amid signs that the shutdown will be resolved.

Back home, banking stocks edged higher despite report that India’s banking sector will be saddled with gross non-performing assets (GNPAs) worth a staggering Rs 9.5 lakh crore by March-end, up from Rs 8 lakh crore in the year-ago period. The high level of stressed assets in the banking system however provide enormous opportunity for asset reconstruction companies (ARCs) which are important stakeholders in the NPA resolution process. In scrip specific development, Axis Bank gained on reporting 25% rise in Q3 net profit, while Kalpataru Power surged on bagging new orders worth Rs 871 crore.

The BSE Sensex is currently trading at 36047.19, up by 249.18 points or 0.70% after trading in a range of 35863.98 and 36047.33. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.84%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Metal up by 3.60%, Basic Materials up by 1.44%, Energy up by 1.23%, Oil & Gas up by 1.21% and IT was up by 1.13%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 3.17%, Infosys up by 2.13%, ONGC up by 1.50%, SBI up by 1.44% and Mahindra & Mahindra up by 1.20%. On the flip side, Asian Paints down by 0.80%, Tata Motors down by 0.49%, Wipro down by 0.22%, Hindustan Unilever down by 0.11% and HDFC Bank down by 0.09% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) has projected that India will grow at 7.4% in 2018 as against China’s 6.8%, making it the fastest growing country among emerging economies following last year's slowdown due to demonetisation and the implementation of the Goods and Services Tax (GST). It has also projected a 7.8% growth rate for India in 2019.

As per WEO, the aggregate growth forecast for the emerging markets and developing economies for 2018 and 2019 is unchanged, with marked differences in the outlook across regions. Emerging and developing Asia will grow at around 6.5% over 2018-19, broadly the same pace as in 2017 and added that the region continues to account for over half of world growth. The IMF said that growth is expected to moderate gradually in China (though with a slight upward revision to the forecast for 2018 and 2019 relative to the fall forecasts, reflecting stronger external demand), pick up in India, and remain broadly stable in the ASEAN-5 region.

According to the report, in the year gone by, China (6.8%) was ahead of India (6.7%), giving China the tag of being the fastest growing emerging economies, as has been the case for major parts of the past several decades. Notably, with a growth rate of 7.1%, India was the fastest growing country among emerging economies in the year 2016. But, India’s economy slowed down a little bit to 6.7% in 2016, due to the demonetisation in late 2016 and implementation of the GST. In 2017, India’s growth rate dropped to 6.7%.

The CNX Nifty is currently trading at 11041.65, up by 75.45 points or 0.69% after trading in a range of 10994.55 and 11043.25. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.47%, Vedanta up by 3.52%, Tata Steel up by 3.24%, Indian Oil Corporation up by 2.35% and Infosys up by 2.23%. On the flip side, Zee Entertainment down by 1.88%, Ambuja Cement down by 1.25%, Eicher Motors down by 1.00%, Tata Motors down by 0.68% and Asian Paints down by 0.66% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted rose 3.05 points or 0.03% to 11,234.51, Shanghai Composite gained 22.28 points or 0.64% to 3,523.64, KOSPI Index surged 24.29 points or 0.97% to 2,526.40, Jakarta Composite increased 71.43 points or 1.1% to 6,571.96, Nikkei 225 soared 250.69 points or 1.05% to 24,067.02 and Hang Seng was up by 382.47 points or 1.18% to 32,775.88.

On the flip side, FTSE Bursa Malaysia KLCI was down by 0.75 points or 0.04% to 1,832.40.