Benchmarks edge higher for ninth straight session

Indian equity benchmarks extended gaining streak for ninth straight session on Tuesday with frontline gauges ending just shy of 34,400 (Sensex) and 10,550 (Nifty) levels. Markets started the session on positive note with the World Bank forecasting a growth rate of 7.3% for India this year and 7.5% for 2019 and 2020, and noted that the country’s economy has recovered from the effects of demonetisation and the Goods and Services Tax (GST). The World Bank also said that India should strive to accelerate investments and exports to take advantage of the recovery in global growth. Some support also came with the India Meteorological Department (IMD) forecasting that the country will receive normal monsoon for a third consecutive year. However, gains remained capped as investors kept a wary eye on geopolitical tensions and oil price movements. However, markets took U-turn and entered into red terrain as traders remained anxious with former President Pranab Mukherjee’s statement that the country’s demographic dividend runs the risk of turning into a demographic disaster if employment is not generated. He added that the country has achieved an economic growth of 6-8% in the last couple of decades but the inequality among different classes of the society is still huge and unacceptable.

Sentiments also remained dampened on media report that the shortage of currency reported in Andhra Pradesh, Telangana and Madhya Pradesh in the past few weeks has spread to a few more states. There were complaints of cash shortages in eastern Maharashtra, Bihar and Gujarat on Monday. The shortage is being felt despite currency in circulation crossing the pre-demonetization level. However, buying in final hour of trade helped markets to regain green terrain after Finance Minister Arun Jaitley said that there is more than adequate currency in circulation and with the banks. Meanwhile, Prime Minister Narendra Modi asked Niti Aayog to familiarise all ministries with the high-end technology and explain how it can be leveraged to address the country’s socio-economic problems.

Firm opening in European markets too aided sentiments. According to official data published, workers in Britain have yet to see their wages rise more quickly than inflation despite unemployment falling to its lowest rate since 1975. Asian markets ended mixed as a raft of Chinese data proved to be a mixed bag and investors watched developments in Syria.

Back home, aviation stocks flied higher on report that the Civil Aviation Ministry is considering a steep reduction on the GST levied on the aviation maintenance, repair and overhaul (MRO) industry. At present, the MRO industry is taxed at 18%, making aircraft servicing in India costlier than other countries. There is also a proposal under consideration to give a five-year tax exemption to newly-set up MRO facilities. Stocks related to Gems and Jewellery segment too edged higher in today’s trade ahead of Akshaya Tritiya.

Finally, the BSE Sensex surged 89.63 points or 0.26% to 34,395.06, while the CNX Nifty was up by 20.35 points or 0.19% to 10,548.70.

The BSE Sensex touched a high and a low of 34,434.14 and 34,229.83, respectively and there were 14 stocks on gaining side as against 17 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.28%, while Small cap index up by 0.28%.

The top gaining sectoral indices on the BSE were Power up by 1.23%, Realty up by 1.21%, Consumer Durables up by 1.05%, Utilities up by 1.05% and FMCG was up by 1.05%, while IT down by 0.38%, TECK down by 0.36%, Auto down by 0.23%, Healthcare down by 0.21% and Capital Goods was down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 2.94%, NTPC up by 1.99%, Hindustan Unilever up by 1.83%, ICICI Bank up by 1.50% and ITC up by 1.23%. On the flip side, Axis Bank down by 1.78%, Sun Pharma down by 1.27%, Adani Ports & SEZ down by 1.24%, Wipro down by 1.14% and Maruti Suzuki down by 0.80% were the top losers.

Meanwhile, raising the possibility of higher farm output and a boost to the rains-dependent rural economy, the India Meteorological Department (IMD), the country’s national weather forecaster, has said that India would receive ‘normal’ monsoon for the third straight year. It noted that seasonal monsoon rainfall is likely to be 97 percent of the long period average (LPA) in 2018, with a margin error of plus or minus 5 percent. It added that last year, the country just about managed to receive normal rainfall-95 percent of the long-period average.

The Met department has pointed out that nearly 50 percent of India’s cultivable farm area depend on the monsoon, making it lifeline of the country’s rural economy and agriculture sector that has been lagging the overall economic growth rate. It also stated that the four-month monsoon season from June to September provides about 75 percent of annual rainfall to the country.  

According to IMD, the country would not face monsoon deficit this year, there are good chances of normal rainfall with 42 percent chances of normal and 12 percent chances of above normal rainfall. It also said that there was very less probability of a deficient monsoon. As per the IMD parameter, rainfall less than 90 percent of the LPA is considered as deficient, between 90-96 percent is below normal, between 96-104 percent is normal, 104-110 percent is above normal and above 110 percent of LPA is considered as excess. 

The CNX Nifty traded in a range of 10,560.45 and 10,495.65. There were 23 stocks in green as against 27 stocks in red on the index.

The top gainers on Nifty were Power Grid Corporation up by 2.86%, Hindustan Unilever up by 2.18%, Titan up by 1.89%, Bharti Airtel up by 1.55% and ICICI Bank up by 1.50%. On the flip side, Bharti Infratel down by 1.93%, Axis Bank down by 1.83%, Wipro down by 1.60%, Sun Pharma down by 1.23% and Adani Ports & SEZ down by 1.03% were the top losers.

The European markets were trading in green; UK’s FTSE 100 rose 18.6 points or 0.26% to 7,216.80, France’s CAC increased 27.46 points or 0.52% to 5,340.42 and Germany’s DAX was up by 113.97 points or 0.92% to 12,505.38.

Asian equity markets ended mixed on Tuesday as a raft of Chinese data proved to be a mixed bag and investors watched developments in Syria amid expectations that last week's US-led missile strikes on the country would not lead to a broader escalation in the conflict. Chinese shares ended lower after the release of mixed data. Official data showed that China's gross domestic product rose 6.8 percent in the first quarter on a yearly basis - in line with expectations and down from 6.9 percent in the previous quarter. China's industrial production and fixed asset investment rose in March, but missed forecasts, while retail sales growth exceeded expectations. Industrial output advanced an annual 6.0 percent in March and retail sales jumped 10.1 percent from last year, while fixed asset investment climbed an annual 7.5 percent. Meanwhile, Japanese shares ended on a flat note as the dollar softened against the yen ahead of a meeting between Prime Minister Shinzo Abe and US President Donald Trump.