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 was off to a quiet start on Friday, down against the dollar. Investors are eyeing for Infosys earnings due later in the day. The sentiments were upbeat on report that the Index of Industrial Production (IIP) grew by a healthy 7.1% in February as the manufacturing sector, which constitutes over 77% of the index, grew at 8.7% in February as compared to almost flat growth of 0.7% in the same month a year ago. IIP had grown by 1.2% in February 2017.  Separately, retail inflation eased to a five-month low in March, but remained above RBI’s medium-term target supporting views that monetary policy is likely to remain unchanged at the next review. The Consumer Price Index rose 4.28% in March from a year earlier.

Separately, the Confederation of Indian Industry (CII) president said that the government should rationalize the Goods and Services Tax (GST) by reducing the number of slabs and cut corporate tax rate to 18%. CII expected India’s GDP to grow in the range of 7.3-7.7% in 2018-19. This is based on strengthening demand in the rural economy, including agriculture and non-farm activities. There are some macro challenges like rising oil prices and protectionism but that would be compensated by improving industrial performance. Banking stocks were trading in green taking cues from RBI data that banks credit grew at 10.32% year-on-year to Rs 86,50,714 crore in the fortnight ended March 30, 2018. In the same fortnight ended March 31, 2017, the advances had stood at Rs 78,41,466 crore.

Traders were seen buying in Telecom, Healthcare and Metal stocks, while selling was witnessed in Capital Goods and FMCG sector stocks. In scrip specific development, MBL Infrastructures is locked at upper circuit limit after the company emerged as India’s first road-builder to achieve a successful insolvency resolution on about Rs 1,700 crore of outstanding loans, with a State Bank of India-led (SBI) consortium approving the revival plan. Anjanee Kumar Lakhotia, the MBL promoter, who was earlier cleared by Kolkata bench of the National Company Law Tribunal (NCLT), will repay the bank loans over nine years and infusion about Rs 100 crore upfront into the company.

On the global front, Asian markets were trading mostly in red. China’s exports growth unexpectedly fell in March, the first drop since February last year, raising questions about the health of one of the economy’s key growth drivers even as trade tensions rapidly escalate with the United States. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 34,200 and 10,500 levels, respectively. The market breadth on BSE was positive in the ratio of 1409:766, while 126 scrips remained unchanged.

The BSE Sensex is currently trading at 34264.94, up by 163.81 points or 0.48% after trading in a range of 34154.94 and 34270.21. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.64%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Telecom up by 1.03%, Healthcare up by 0.98%, Metal up by 0.93%, Realty up by 0.85% and Basic Materials up by 0.75%, while Capital Goods down by 0.09% and FMCG down by 0.04% were the only losing indices on BSE.

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 3.60%, Dr. Reddy’s Lab up by 1.57%, Kotak Mahindra Bank up by 1.23%, ICICI Bank up by 1.08% and NTPC up by 1.03%.

On the flip side, Hindustan Unilever down by 0.83%, SBI down by 0.49%, Larsen & Toubro down by 0.45% and Hero MotoCorp down by 0.07% were the top losers.

Meanwhile, India's retail inflation softened to a five-month low of 4.28% in the month of March 2018, as against 4.44% in February 2018, mainly on account of easing food prices including vegetables. However, the inflation based on the Consumer Price Index (CPI) for the March was higher than 3.89% recorded in the same month last year. Besides, consumer food price inflation, a metric to gauge changes in monthly kitchen costs, also eased to 2.81% in March as compared with 3.26% in February but it was above the 2.01% in a year ago period.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the CPI (Rural, Urban, Combined) on Base 2012=100 for March 2018, stood at 4.44%, 4.12% and 4.28% respectively, compared to 3.75%, 3.96% and 3.89%, respectively in March 2017. The index value of CPI for combined stood at 136.5 for the month of March. The data also showed that Consumer Food Price Index (CFPI) for all India Rural and Urban for March 2018 stood at 3.63% and 1.22%, respectively, compared to 1.85% and 2.42%, respectively in March 2017. The index value of CFPI for combined stood at 135.5 for the month under review.

Inflation in the vegetables segment cooled to 11.7% in March from 17.57% in the previous month, while prices of pulses and products continued to fall at (-) 13.4% as compared with (-) 17.35% a month ago. The rate of price rise in the protein rich items like eggs, milk and other products too moderated in March as against the previous month. However, inflation in fruits basket was higher. Besides, housing inflation remained almost flat at 8.31% in March as compared to 8.28% a month ago, while fuel and light inflation, which has seen an uptick since July, eased to 5.73% in March from 6.80% in February.

The CNX Nifty is currently trading at 10507.05, up by 48.40 points or 0.46% after trading in a range of 10475.80 and 10507.35. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Adani Ports & Special Economic Zone up by 3.77%, Bharti Infratel up by 2.10%, Indiabulls Housing Finance up by 1.97%, Hindalco up by 1.93% and Dr. Reddy’s Lab up by 1.56%.

On the flip side, HCL Tech down by 1.00%, BPCL down by 0.93%, Hindustan Unilever down by 0.69%, Bajaj Finserv down by 0.51% and Larsen & Toubro down by 0.49% were the top losers.

The Asian markets were trading mostly in red; Shanghai Composite decreased 8.51 points or 0.27% to 3,171.65, FTSE Bursa Malaysia KLCI decreased 4.17 points or 0.22% to 1,869.45, Hang Seng decreased 3.55 points or 0.01% to 30,827.73 and Jakarta Composite decreased 1.87 points or 0.03% to 6,308.93.

On the other hand, KOSPI Index increased 11.52 points or 0.47% to 2,454.23, Taiwan Weighted increased 22.28 points or 0.2% to 10,977.57 and Nikkei 225 increased 139.55 points or 0.64% to 21,799.83.