Markets trade slightly in green in early deals

Indian equity benchmarks made a positive start and are trading slightly in green in early deals with traders taking some encouragement with the World Bank forecasting a growth rate of 7.3 per cent for India this year and 7.5 per cent for 2019 and 2020, and noted that the country’s economy has recovered from the effects of demonetisation and the Goods and Services Tax. 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.

On the global front, Asian markets are trading mostly in green at this point of time. However, Shanghai Composite edged lower despite better-than-expected GDP data. China’s economy grew 6.8 percent in the first quarter of 2018. The US markets ended higher on Monday as traders reacted positively to earnings news from financial giant Bank of America (BAC), which reported first quarter earnings that beat analyst estimates on strong loan growth.

Back home, Aviation stocks flied higher on report that the Civil Aviation Ministry is considering a steep reduction on the Goods and Services Tax (GST) levied on the aviation maintenance, repair and overhaul (MRO) industry. At present, the MRO industry is taxed at 18 percent, 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. In scrip specific developments, Blue Star jumped on its arm entering into partnership with Sands International and Glenmark Pharmaceuticals edged higher on initiating Phase 2b clinical trial of GBR 830.

The BSE Sensex is currently trading at 34361.11, up by 55.68 points or 0.16% after trading in a range of 34284.67 and 34398.09. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.42%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were Metal up by 1.42%, Power up by 1.25%, Utilities up by 1.00%, Basic Materials up by 0.78% and Realty was up by 0.68%, while IT down by 0.60%, TECK down by 0.47% and Oil & Gas was down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 2.86%, Tata Steel up by 1.86%, Mahindra & Mahindra up by 1.53%, Hindustan Unilever up by 1.28% and NTPC up by 1.18%. On the flip side, Infosys down by 1.40%, Wipro down by 1.02%, Maruti Suzuki down by 0.63%, Sun Pharma Industries down by 0.60% and ITC down by 0.55% were the top losers.

Meanwhile, with sustained recovery in private investment and private consumption, the World Bank in its latest report has forecasted that India’s economic growth will accelerate to 7.3% in the year 2018 from 6.7% in 2017. It added that the gross domestic product (GDP) growth rate will increase further to 7.5% in the following two years - 2019 and 2020. It highlighted that Indian economy has recovered from the effects of demonetisation and the Goods and Services Tax (GST).

The report ‘twice-a-year South Asia Economic Focus (SAEF)’ has stated that the country should strive to accelerate investments and exports to take advantage of the recovery in global growth. It said that every month, the work force increases by 1.3 million people and India must create 8.1 million jobs a year to maintain its employment rate, which has been declining based on employment data analysed from 2005 to 2015, largely due to women leaving the job market.

As per the World Bank, the most substantial medium-term risks are associated with private investment recovery, which continues to face several domestic impediments such as corporate debt overhang, regulatory and policy challenges, along with the risk of an imminent increase in US interest rates. It also said that if the internal bottlenecks are not alleviated, subdued private investment would put downside pressures on India’s potential growth.

The CNX Nifty is currently trading at 10543.40, up by 15.05 points or 0.14% after trading in a range of 10519.00 and 10557.55. There were 28 stocks advancing against 21 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Hindalco up by 2.97%, Power Grid Corporation up by 2.76%, Tata Steel up by 2.10%, Mahindra & Mahindra up by 1.45% and Vedanta up by 1.41%. On the flip side, Infosys down by 1.51%, Bharti Infratel down by 1.15%, Cipla down by 1.12%, Wipro down by 1.12% and Maruti Suzuki down by 0.66% were the top losers.

Asian markets are trading mostly in green; Hang Seng rose 0.55 points to 30,316.14, FTSE Bursa Malaysia KLCI increased 3.81 points or 0.2% to 1,882.57, Jakarta Composite gained 9.52 points or 0.15% to 6,296.27 and Nikkei 225 up by 17.06 points or 0.08% to 21,852.59.

On the flip side, Taiwan Weighted declined 135.73 points or 1.24% to 10,818.82, Shanghai Composite decreased 10.75 points or 0.35% to 3,099.90 and KOSPI Index down by 3.6 points or 0.15% to 2,453.89.