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. The rupee opened higher against dollar on Monday. Foreign portfolio investors (FPIs) poured in Rs 535.90 crore (net) in equities on Friday, data available with NSDL showed. The sentiments were upbeat on the World Economic Situation and Prospects 2018 report of the United Nations, which enlightened that the Indian economy is projected to grow at 7.2% in 2018-19 and 7.4% in 2019-20. The report indicates that the outlook for India remains largely positive, underpinned by robust private consumption and public investment as well as ongoing structural reforms. Separately, industry CII welcomed the launch of the E-way Bill system for inter-state movement of goods under th Goods and Service Tax (GST), saying it will pave the way for widening of the tax base, reduce logistics costs, and faster movement of goods. The industry body added that the major relief to industry and business is in hassle-free movement of goods across state borders under GST by removing the state barriers, which is a milestone for improvement in ease of doing business.

Investors took note of Economic Affairs Secretary Subhash Chandra Garg’s statement that India will need to create and develop a very healthy and supportive macro-economic environment to become $10 trillion economy by the year 2030. He also said that the present government has taken number of bold steps like GST and Insolvency and Bankruptcy Code (IBC). Garg has stated that the government is working on an overseas investment policy with an aim to provide support to Indian businesses which will invest abroad. However, telecom stocks Bharti Airtel, Idea Cellular and Reliance Communications were trading under pressure as the industry body COAI expects earnings of mobile operators to remain depressed for another 3-4 quarters, hurt by the sheer intensity of competition in the telecom market. A recent report by the Telecom Regulatory Authority of India (TRAI) has noted that the gross revenue of telecom services providers fell 8.1%, while the licence fee collected by the government dropped by 16% year-on-year in the quarter ended December 31, 2017.

Traders were seen buying in Consumer Durables, Oil & Gas and Consumer Disc stocks, while selling was witnessed in IT and TECK sector stocks. In scrip specific development, Lemon Tree Hotels was trading in green on debuting on the stock exchanges. The offering, which was open for subscription between March 26, 2018 and March 28, 2018, was subscribed 1.19 times. The issue price was fixed at Rs 56 per share. Kansai Nerolac Paints was trading in green on completing the acquisition of the equity stake and has acquired the 100% equity share holding of Marpol. Marpol is a pioneer in powder coating business and its brand is very reputed. It manufactures products such as epoxy polyester, pure polyester, pure epoxy and polyurethane powder.

On the global front, Asian markets were trading in green as a bounce in US stock futures soothed sentiment even as US President Donald Trump kept up his twitter war with China just a couple of days before President Xi Jinping gives a keynote speech. Japan’s swelling current-account surplus in February may be good news for the country’s finances, but not so much for its relationship with the US. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,700 and 10,350 levels respectively. The market breadth on BSE was positive in the ratio of 1579:688, while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 33790.57, up by 163.60 points or 0.49% after trading in a range of 33578.91 and 33807.93. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.49%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.15%, Oil & Gas up by 1.11%, Consumer Disc up by 0.85%, Energy up by 0.83% and Capital Goods up by 0.66%, while IT down by 0.21% and TECK down by 0.15% were the only losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.70%, Yes Bank up by 1.61%, IndusInd Bank up by 1.49%, Kotak Mahindra Bank up by 1.43% and HDFC Bank up by 0.91%.

On the flip side, ICICI Bank down by 0.94%, Infosys down by 0.92%, Tata Motors - DVR down by 0.51%, Coal India down by 0.24% and Tata Motors down by 0.23% were the top losers.

Meanwhile, suggesting better measures for the devolution of funds to states, NITI Aayog Vice Chairman Rajiv Kumar has pointed out the need for building ‘performance indicators’. He said that devolution of funds criteria has to include some performance based criteria and therefore those states which have done better in certain performance should not be punished. His statement came in the backdrop of some states expressing disquiet about the Terms of Reference of the 15th Finance Commission to decide the sharing of tax resources between the Centre and states.

Kumar pointed out that fiscal irresponsibility is bad but fiscal fetish is also not good and a balance must be maintained. He highlighted that the country is entering a new era of much larger fiscal space because of the Goods and Services Tax (GST) and buoyancy in direct tax collection. He also urged to the industry body to come up with new formula for enhancing growth and added that macro-economic policy in India needs to be counter-cyclical. He said that while the Fiscal Responsibility and Budget Management Act did have a role to play in discouraging short-term populist measures and promoted fiscal discipline, there was also no need to be concerned about borrowing that finances long term capital expenditure. He also pointed out that certain expenditures such as those for health and education could be viewed as capital expenditure as they promote productivity gains in the long run.

Besides, Rajiv Kumar added that NITI Aayog was in favour of recommending to the 15th Finance Commission to consider Sustainable Development Goals (SDG) performance for allocating a small percentage of funds to different states. But unfortunately they found that if the government uses SDG performance criteria for funds devolution to the states, then it is the more backward states or populated states that will lose some of their allocations and that would be politically harmful. 

The CNX Nifty is currently trading at 10382.35, up by 50.75 points or 0.49% after trading in a range of 10328.50 and 10391.25. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were HPCL up by 3.64%, Titan Co up by 3.07%, BPCL up by 2.59%, Hindalco up by 2.50% and Indian Oil Corporation up by 2.09%.

On the flip side, ICICI Bank down by 0.84%, Infosys down by 0.83%, GAIL India down by 0.70%, Tata Motors down by 0.41% and Coal India down by 0.40% were the top losers.

The Asian markets were trading in green; KOSPI Index increased 10.1 points or 0.42% to 2,439.68, FTSE Bursa Malaysia KLCI increased 10.69 points or 0.58% to 1,847.70, Shanghai Composite increased 13.84 points or 0.44% to 3,144.95, Jakarta Composite increased 31.13 points or 0.5% to 6,206.19, Taiwan Weighted increased 75.5 points or 0.7% to 10,897.03, Nikkei 225 increased 159.73 points or 0.74% to 21,727.25 and Hang Seng increased 456.54 points or 1.53% to 30,301.48.