Markets at Day’s high; IT stocks rise on weak rupee

Indian equity benchmark indices extended their gains in late afternoon session to trade near their intraday high points, with Sensex and Nifty gaining around 200 and 50 points, respectively, despite weak opening of European markets. Heavy buying in IT, TECK and Banking stocks along with gains led by the major industry gainers such as TCS, ICICI Bank and Infosys supported the markets’ rally. Investors continued to take encouragement with a report that India has jumped 13 places in the last one year to earn 130th spot in the latest annual Index of Economic Freedom released by a top American think-tank. In 2017, India with a score of 52.6 points was ranked at 143 among 180 countries, two spots below neighbor Pakistan. Besides, some support also came with a private report highlighting that FDI inflows have increased by 34% to an average of $10.2 billion quarterly since the NDA-government assumed power in 2014. The report further noted that FDI inflows in India have nearly doubled to $42 billion in FY17.

Traders took note of IMF chief Christine Lagarde’s statement that the International Monetary Fund (IMF) is optimistic on the outlook for global growth but warned darker clouds are looming due to fading fiscal stimulus and rising interest rates. Meanwhile, former RBI governor Raghuram Rajan has said that proper implementation of the Goods and Services Tax (GST) in India can be worked upon and is not an ‘unfixable problem’. On the sectoral front, stocks related to IT sector including TCS, HCL Technologies and Infosys were trading higher, as the rupee weakened against the dollar.

On the global front, European markets were trading in red, as investor sentiment was curbed by the threat of imminent US military action in Syria. Asian markets were also trading in red. Back home, in scrip specific development, Om Metals Infraprojects traded higher after the company secured Letter of Acceptance (LOA) from SJVN Arun-3 Power Development Company for all hydro-Mechanical works including Pressure Shaft Steel liner of Arun-3 Hydroelectric Project (900 MW) located in Sankhuwasabha District in Nepal at a contract price of Rs 156.98 crore inclusive of all taxes and duties etc.

The BSE Sensex is currently trading at 34132.13, up by 191.69 points or 0.56% after trading in a range of 33924.88 and 34177.44. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.08%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were IT up by 3.61%, TECK up by 2.83%, Bankex up by 0.42%, Capital Goods up by 0.28% and Industrials up by 0.13%, while Realty down by 1.23%, Metal down by 0.80%, Telecom down by 0.78%, Healthcare down by 0.46% and Power down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 4.33%, Infosys up by 4.28%, ICICI Bank up by 1.37%, Axis Bank up by 1.26% and Tata Motors up by 1.06%. On the flip side, Dr. Reddy’s Lab down by 1.67%, Adani Ports & SEZ down by 1.31%, SBI down by 1.01%, Sun Pharma down by 1.00% and ITC down by 0.87% were the top losers.

Meanwhile, India’s central banking institution, the Reserve Bank of India (RBI) in its latest ‘Union Budget 2018-19: An Assessment’ study has said that the country’s social sector expenditure, primarily constituting health and education continues to remain woefully below peers, in terms of Gross Domestic Product (GDP). The RBI concluded this on the basis of analysis of 17 countries - India, Korea, Latvia, Iceland, Israel, Ireland, Estonia, Slovak Republic, Czech Republic, Poland, Hungary, Slovenia, Portugal, Spain, Greece, Italy and Belgium.

As per the study, India spent lowest on social sectors at 7.5% of GDP in 2016, while Belgium spent highest at 29.0% of GDP in 2016, followed by Italy 28.9% and Greece 27.0%. The study report noted that the expenditure on health and education together is budgeted to grow by 4.6% as per the 2018-19 Budget, on the back of the National Health Protection Scheme under the 'Ayushman Bharat' programme and the education system reforms.

The RBI study further said that capital expenditure which is growth inducing has been proposed to be raised by 9.9% in 2018-19 over the revised estimates (RE) of 2017-18, marking a decline of 3.0% when compared with Budget Estimate (BE) of 2017-18. Besides, it found that Capital Outlay (capital expenditure excluding loans and advances) is budgeted to increase by 12.6% in 2018-19, a marginal rise over BE but sharply higher than 1.6% in 2017-18 (RE) and Capital outlay on major infrastructure is estimated to grow by a robust 23.0% in 2018-19 (BE) - as against a decline of 2.1% in 2017-18 (RE) - led by the railways, roads and bridges.

The CNX Nifty is currently trading at 10465.35, up by 48.20 points or 0.46% after trading in a range of 10395.25 and 10469.90. There were 25 stocks advancing against 24 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were HCL Tech. up by 4.48%, TCS up by 4.46%, Infosys up by 4.14%, Tech Mahindra up by 2.79% and Axis Bank up by 1.23%. On the flip side, Vedanta down by 2.19%, Dr. Reddy’s Lab down by 1.79%, Lupin down by 1.76%, Adani Ports & SEZ down by 1.40% and Sun Pharma down by 1.05% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 66.43 points or 0.21% to 30,831.28, Jakarta Composite decreased 64.42 points or 1.01% to 6,296.52, Shanghai Composite decreased 27.92 points or 0.87% to 3,180.16, Nikkei 225 decreased 26.82 points or 0.12% to 21,660.28, Taiwan Weighted decreased 18.73 points or 0.17% to 10,955.29, KOSPI Index decreased 1.51 points or 0.06% to 2,442.71 and FTSE Bursa Malaysia KLCI decreased 1.3 points or 0.07% to 1,868.59.

All European markets were trading in red; Germany’s DAX decreased 8.79 points or 0.07% to 12,285.18, France’s CAC decreased 4.15 points or 0.08% to 5,273.79 and UK’s FTSE 100 decreased 2.03 points or 0.03% to 7,255.11.