Benchmarks continue firm trade in morning session

Indian equity benchmarks continued their firm trade in morning session on account of buying in frontline blue chip counters taking cues from global counterparts. The rupee opened higher ahead of the first bimonthly monetary policy decision of FY19. The sentiments were upbeat as expectation of normal rains, boost in private and government expenditure along with green shoots emerging in investment spending have prompted India Ratings and Research to revise its FY19 GDP growth forecast to 7.4% from 7.1% earlier. As per the agency report, FY19 growth will continue to be driven by consumption and associated sectors such as automobiles, cargo handled at major ports, railway freight, domestic air passengers and consumption of petroleum products. Separately, India’s services industry returned to growth in March as new business picked up on improved demand, encouraging firms to hire at the fastest pace in nearly seven years. The Nikkei/IHS Markit Services Purchasing Managers’ Index managed to narrowly push back above the 50-mark that separates growth from contraction, rising to 50.3 last month from 47.8. The new business sub-index that tracks overall demand also returned to growth in March, rising to 50.6 from 48.0 in a reflection of increased levels of new work.

Meanwhile, investors took note of Corporate Affairs Secretary Injeti Srinivas’ statement that less than half of the staggering Rs 9 lakh crore worth of non-performing assets (NPAs), or bad loans, accumulated by banks had returned due to the system set in place by the Insolvency and Bankruptcy Code (IBC), 2016. He added that a good outcome on half of these cases would help boost confidence in the system, a key component of which is the National Company Law Tribunal (NCLT) -- the final adjudicator. Separately, Niti Aayog CEO Amitabh Kant has said that the government has been able to save Rs 830 billion through direct benefit transfer scheme.

On the sectoral front, banking stocks were buzzing with the Reserve Bank of India (RBI) giving provisioning relief to stressed banks. The apex bank has temporarily relaxed provisioning norms for lenders to defaulters undergoing bankruptcy resolution in a move that could help banks bolster their financial results for the year and quarter ended March. Provisions for accounts referred to the National Company Law Tribunal (NCLT) have been reduced to 40% of dues at the end of March for secured loans, down from 50% earlier. Separately, RBI data showed that loan write-offs as percentage of gross non-performing assets (NPAs) declined to 13 per cent as on March 2017 from a high of 25 per cent in March 2011.

Traders were seen buying in Metal, Basic Materials and Realty sector stocks. Auto, bank and real estate stocks are likely to hog limelight today as the RBI will declare first bimonthly monetary policy review of FY19. In scrip specific development, 63 Moons Technologies was trading in red on report that Economic Offences Wing (EOW) has freezed operational accounts of the company. EOW’s actions are part of investigation in the Rs 5,600 crore NSEL scam. ITI was trading in green on being declared as L1 (lowest) bidder in the ‘MAHANET tender of Maharashtra State for connecting Gram Panchayats to block level through fibre under Bharat Net Phase II Project’.

On the global front, Asian markets were trading in green. The percentage of Japanese households expecting prices to accelerate fell in March from three months ago, underscoring the difficulty of eradicating the country’s sticky deflationary mindset. The Bank of Japan’s survey on people’s livelihood showed the percentage of households who expect prices to rise a year from now was 73.9% in March, down from 75.6% in December. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,400 and 10,250 levels respectively. The market breadth on BSE was positive in the ratio of 1875:380, while 84 scrips remained unchanged.

The BSE Sensex is currently trading at 33468.59, up by 449.52 points or 1.36% after trading in a range of 33267.86 and 33499.32. There were 30 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.59%, while Small cap index was up by 1.70%.

The top gaining sectoral indices on the BSE were Metal up by 3.64%, Basic Materials up by 2.68%, Realty up by 2.49%, Industrials up by 2.04% and Capital Goods up by 1.80%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 3.40%, Tata Motors - DVR up by 3.37%, Tata Motors up by 3.18%, Adani Ports & Special Economic Zone up by 2.87% and Yes Bank up by 2.54%.

On the flip side, Bharti Airtel down by 0.15% was the only losers.

Meanwhile, in a main achievement, India has left Japan behind to become the second largest producer of crude steel globally in February 2018. According to the Steel Users Federation of India (SUFI), presently, China is the world’s largest producer of crude steel, accounting for more than 50 percent of the production. It highlighted that India’s crude steel production has grown by 4.4 percent to 93.11 million tonnes (MT) in the period April 2017 to February 2018 as compared with April 2016 to February 2017.

The federation has noted that in 2015, India overtook the United States (US) to become the world’s third largest steel producer. SUFI president Nikunj Turakhia has said that growth in steel production is due to the right policies undertaken by the Modi government. He also pointed out that the government has taken a series of steps to curb imports, push local demand with initiatives like ‘Make in India’, implementation of the GST and infrastructure projects, to encourage the domestic market.

Turakhia further stated that the steel ministry is working proactively to lay down the road map to achieve 300 million tons by the year 2030. He also noted that quick resolution of various big-ticket steel mills under the Insolvency and Bankruptcy Code and the National Company Law Tribunal is expected to further hasten the process of achieving higher capacity utilization. According to the World Steel Association, India produced 8.4 MT of crude steel in February 2018, up 3.4 percent over February 2017.

The CNX Nifty is currently trading at 10270.95, up by 142.55 points or 1.41% after trading in a range of 10227.45 and 10286.25. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 5.28%, Vedanta up by 4.52%, Tata Steel up by 3.48%, Tata Motors up by 3.08% and UPL up by 3.00%.

On the flip side, Bharti Infratel down by 0.68%, Bharti Airtel down by 0.47% and ITC down by 0.02% were the top losers.

The Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 18.62 points or 1.03% to 1,834.56, Jakarta Composite increased 23.9 points or 0.39% to 6,180.99, KOSPI Index increased 36.03 points or 1.5% to 2,444.09 and Nikkei 225 increased 376.31 points or 1.77% to 21,695.86.

China, Hong Kong and Taiwan markets are closed on account of National holiday.