Benchmarks continue to trade above neutral line

Indian equity benchmarks continued their trade above neutral line in morning session on account of buying in frontline blue chip counters. The rupee opened higher against the US dollar. The Indian unit was the biggest loser among Asian currencies. Oil prices rose amid worries there could be a high risk of disruptions to supply, especially in the Middle East. The sentiments were upbeat after the India Meteorological Department (IMD) on Monday predicted a normal monsoon this year and said there is a very less possibility of a deficient monsoon. Though the IMD pegged the season’s rainfall in the lower end of the normal range, at 97% of the long period average (LPA), its prediction matches private forecaster Skymet weather’s forecast, raising hopes of a normal monsoon. Separately, 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. Meanwhile, select aviation stocks were buzzing on reports that the civil aviation ministry is considering a steep reduction on the Goods and Services Tax (GST) levied on 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.

Meanwhile, investors shrugged off 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. Separately, former President Pranab Mukherjee has said 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.

Traders were seen buying in Power, Utilities and Metal stocks, while selling was witnessed in IT and TECK sector stocks. In scrip specific development, agri-linked and fertilizer stocks were buzzing as the IMD said it expects monsoon rains to hit Kerala coast by May 15 and projected a normal monsoon for the third year in a row. Glenmark Pharmaceuticals was trading in green on initiating Phase 2b clinical trial of GBR 830, a novel, investigational treatment for moderate-to-severe atopic dermatitis. The trial’s primary endpoint will assess the efficacy of GBR 830, compared to placebo. Secondary and exploratory trial endpoints include additional measures of efficacy, safety and pharmacodynamics. The trial enrollment is expected to begin in June 2018.

On the global front, Asian markets were trading mostly in red. China’s economic growth held steady at 6.8% over a year earlier in the quarter ending in March, buoyed by retail sales and investment. Data released showed growth in the world’s second-largest economy was down slightly from 2017’s full-year expansion of 6.9% but in line with the quarter ending in December. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 34,300 and 10,500 levels, respectively. The market breadth on BSE was positive in the ratio of 1,397:762, while 107 scrips remained unchanged.

The BSE Sensex is currently trading at 34380.92, up by 75.49 points or 0.22% after trading in a range of 34284.67 and 34413.83. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.41%, while Small cap index was up by 0.53%.

The top gaining sectoral indices on the BSE were Power up by 1.18%, Utilities up by 1.00%, Metal up by 0.98%, Consumer Durables up by 0.75% and Realty up by 0.72%, while IT down by 0.58% and TECK down by 0.51% were the only losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.56%, NTPC up by 1.53%, Tata Steel up by 1.49%, Mahindra & Mahindra up by 1.35% and ICICI Bank up by 1.13%.

On the flip side, Infosys down by 1.30%, Sun Pharma down by 1.10%, Axis Bank down by 0.90%, Wipro down by 0.84% and ONGC down by 0.66% 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 is currently trading at 10539.25, up by 10.90 points or 0.10% after trading in a range of 10519.00 and 10557.55. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 2.69%, Hindalco up by 2.07%, Tata Steel up by 1.56%, Mahindra & Mahindra up by 1.32% and NTPC up by 1.15%.

On the flip side, Infosys down by 1.36%, Bharti Infratel down by 1.34%, Sun Pharma down by 1.16%, HPCL down by 0.98% and Wipro down by 0.93% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 142.62 points or 1.3% to 10,811.93, Hang Seng decreased 63.26 points or 0.21% to 30,252.33, Shanghai Composite decreased 15.8 points or 0.51% to 3,094.85 and KOSPI Index decreased 6.36 points or 0.26% to 2,451.13.

On the other hand, FTSE Bursa Malaysia KLCI increased 3.16 points or 0.17% to 1,881.92, Jakarta Composite increased 7.21 points or 0.11% to 6,293.96 and Nikkei 225 increased 20.7 points or 0.09% to 21,856.23.