Benchmarks trade with traction ahead of Budget

Indian equity benchmarks made an optimistic start and are trading with a gain of over half a percent with frontline gauges recapturing their crucial 11,050 (Nifty) and 36,100 (Sensex) levels ahead of the budget 2018, to be presented by Finance Minister Arun Jaitley later in the day. Investors are eagerly awaiting union budget, as the government aims to woo back rural voters and small businesses ahead of state elections. Traders took some encouragement with report that the Central Statistics Office has revised the Gross Domestic Product (GDP) growth rate for 2015-16 to 8.2 per cent from the earlier estimates of 8 per cent and kept the 2016-17 growth unchanged at 7.1 per cent. The real GDP or GDP at constant (2011-12) prices for the years 2016-17 and 2015-16 stands at Rs 121.96 lakh crore and Rs 113.86 lakh crore respectively, showing growth of 7.1 per cent during 2016-17 and 8.2 per cent during 2015-16. Market participants shrugged off report that growth of the eight core sectors slowed to a five-month low of 4% in December 2017 due to negative performance of segments like coal and crude oil. The output growth recorded in December is the lowest since July 2017, when these core sectors had witnessed 2.9% expansion.

Global cues too remained supportive with Asian markets trading mostly in green, as economic data from around the region improved. Japanese markets edged higher as a weaker yen lifted investors’ sentiments. The US markets ended with marginal gains on Wednesday after the Federal Reserve announced its widely expected decision to leave interest rates unchanged.

Back home, auto stocks remained buzzing on declaring their monthly sales number for January. In scrip specific development, Wipro gained with arm concluding investment in Harte Hanks, while Godrej Properties rose on adding three new projects across Bangalore and NCR.

The BSE Sensex is currently trading at 36193.32, up by 228.30 points or 0.63% after trading in a range of 36021.88 and 36226.97. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.02%, while Small cap index was up by 0.78%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.05%, Consumer Durables up by 1.33%, Industrials up by 1.25%, Realty up by 1.02% and IT was up by 0.82%, while Metal down by 0.54%, Healthcare down by 0.20% and Telecom was down by 0.12% were the few losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.93%, Mahindra & Mahindra up by 2.17%, TCS up by 2.03%, ONGC up by 1.60% and Indusind Bank up by 1.36%. On the flip side, Dr. Reddys Lab down by 1.31%, Tata Steel down by 1.24%, NTPC down by 0.91%, Sun Pharma down by 0.75% and Power Grid down by 0.57% were the top losers.

Meanwhile, the government in its first revised estimates has kept the Gross Domestic Product (GDP) growth rate for fiscal year 2016-17 unchanged at 7.1% and revised the GDP growth rate for 2015-16 to 8.2% from the earlier estimates of 8%. The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation has released the first revised estimates for the financial year 2016-17 along with second revised estimates for the financial year 2015-16 and third revised estimates for the financial year 2014-15 (with base year 2011-12). The CSO said that the first revised estimates for 2016-17 have been compiled using industry-wise/institution-wise detailed information instead of using the benchmark-indicator method employed at the time of release of Provisional Estimates on May 31, 2017.

As per the data released by CSO, Real GDP or GDP at constant (2011-12) prices for the years 2016-17 and 2015-16 stands at Rs 121.96 lakh crore and Rs 113.86 lakh crore, respectively, showing growth of 7.1% during 2016-17 and 8.2% during 2015-16. The second revised estimates showed that the country’s GDP grew 8.2% in 2015-16 compared with the preliminary forecast of 8%. Under the third revision, the CSO has estimated GDP growth in 2014-15 at 7.4% from earlier estimates of 7.5%.

In terms of real Gross Value Added (GVA), it said the GVA at constant (2011-12) basic prices grew 7.1% in 2016-17, as against a growth of 8.1% in 2015-16. According to advance GDP estimates of CSO, the GVA growth on 2011-12 price was estimated at 6.6% for 2016-17. The growth in real GVA during 2016-17 has been lower than that in 2015-16 mainly due to lower growth in ‘manufacturing’ (7.9%), ‘construction’ (1.3%), ‘transport, storage, communication & services related to broadcasting’ (4.3%), ‘trade, repair, hotels and restaurants’ (8.9%), ‘financial services’ (1.3%) and ‘real estate, ownership of dwelling & professional services’ (8.0%).

Regarding Net National Income (NNI), the CSO data revealed that NNI at current prices for the year 2016-17 stands at Rs 134.9 lakh crore as against Rs 121.5 lakh crore in 2015-16, showing an increase of 11.0% during 2016-17 as against an increase of 10.7% in the previous year. On the other hand, Per Capita Income, i.e., Per Capita Net National Income at current prices, is estimated as Rs 94,731 and Rs 1,03,870 respectively for the years 2015-16 and 2016-17. Correspondingly, Per Capita Private Final Consumption Expenditure (PFCE) at current prices, for the years 2015-16 and 2016-17 is estimated at Rs 63,065 and Rs 69,322 respectively.

The CNX Nifty is currently trading at 11077.05, up by 49.35 points or 0.45% after trading in a range of 11039.50 and 11100.70. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.89%, TCS up by 2.33%, Mahindra & Mahindra up by 2.08%, HCL Tech. up by 2.08% and Indusind Bank up by 1.46%. On the flip side, Vedanta down by 2.00%, Bharti Infratel down by 1.74%, Dr. Reddys Lab down by 1.71%, Tata Steel down by 1.37% and Sun Pharma down by 1.19% were the top losers.

Asian markets are trading mostly in green; KOSPI Index gained 4.19 points or 0.16% to 2,570.65, Jakarta Composite increased 42.12 points or 0.64% to 6,647.75, Taiwan Weighted added 70.67 points or 0.64% to 11,174.46 and Nikkei 225 was up by 282.52 points or 1.22% to 23,380.81.

On the flip side, Hang Seng decreased 143.48 points or 0.44% to 32,743.79 and Shanghai Composite was down by 38.63 points or 1.11% to 3,442.21.