Key equity indices trade slightly in green

Indian equity benchmarks continued to trade slightly in green in late morning deals. Traders took some support with the India Meteorological Department (IMD) forecasting that there will be 97% normal monsoon for the year 2018-19, which could be a good news for the rural economy that suffered due to the twin impact of drought years and demonetisation. This year will be the third year for the normal monsoon with very less chance of rain deficit. Investors’ sentiments were optimistic with World Bank forecasting a growth rate of 7.3 per cent for India this year and 7.5 per cent for 2019 and 2020. Growth in manufacturing and construction were most affected by GST and demonetisation, accelerated to 8.1 and 6.8 percent growth during Q3 FY18. While investment growth picked up and grew at 12% year-on-year in the third quarter of the fiscal year 2017-18. 

On the global front, Asian Markets were trading mixed. 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, in the scrip specific developments, Ashoka Buildcon gained on receiving Letters of Intentions for two electrification work projects. Besides, NHPC edged higher on synchronizing 50 MW solar project in Tamil Nadu with grid.

The BSE Sensex is currently trading at 34320.59, up by 15.16 points or 0.04% after trading in a range of 34284.67 and 34413.83. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.22%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were Power up by 1.10%, Utilities up by 0.79%, Metal up by 0.63%, PSU up by 0.42% and Consumer Durables was up by 0.40%, while IT down by 0.63%, TECK down by 0.56%, Oil & Gas down by 0.26%, Healthcare down by 0.19% and Capital Goods was down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.74%, NTPC up by 1.73%, Mahindra & Mahindra up by 1.25%, Tata Steel up by 1.18% and Coal India was up by 1.07%. On the flip side, Sun Pharma down by 1.44%, Wipro down by 1.33%, Axis Bank down by 1.09%, ONGC down by 1.05% and Infosys was down by 1.05% were the top losers.

Meanwhile, domestic credit rating agency, ICRA in its latest report has said that India’s solar power capacity addition is likely to register 40% fall at 4-4.5 Giga Watts (GW) in the financial year 2019 from last year. It pointed out that the projected fall in capacity addition is mainly because of subdued trend in tendering of solar projects since June 2017 in the midst of several factors such as Goods and Services Tax (GST) roll-out, an upward pressure on PV module price levels internationally and continued uncertainty on safeguard duty and anti-dumping duty post the petitions filed by solar module manufacturer associations between June and Dec 2017.

According to the report, subdued trend in award of solar projects is also evident from the fact that only 4.5 GW capacity was auctioned and awarded in calendar year (CY) 2017 as against 7.3 GW in CY 2016. It also noted that with expected decline in PV module price level, long-term debt availability at cost competitive rate and aggressive bidding by independent power producers (IIPs), weighted average solar bid tariff during CY 2017 declined sharply to Rs 3 per unit from Rs 5 per unit in CY 2016.

Though, the rating agency stated that the declining solar bid tariffs levels remain favourable to state-owned distribution utilities, the hardening of module prices over the last 6 to 9 month period along with import duty incidence on module imports (to the extent of 7.5% since October 2017) has led to viability related concerns especially for the projects with tariff below Rs 3 per unit, also given the uncertainty on safeguard duty front. It added that in this context, the viability of such tariffs critically hinged on structuring of debt with longer tenures, competitive funding costs and the ability of the project developers to keep the cost of modules within the budgeted levels.

The CNX Nifty is currently trading at 10528.65, up by 0.30 points or 0.00% after trading in a range of 10519.00 and 10557.55. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 2.66%, Hindalco up by 1.80%, NTPC up by 1.55%, Tata Steel up by 1.34% and Mahindra & Mahindra was up by 1.17%. On the flip side, Sun Pharma down by 1.49%, Wipro down by 1.45%, Bharti Infratel down by 1.19%, Axis Bank down by 1.16% and Infosys was down by 1.14% were the top losers.

Asian market were trading mixed, FTSE Bursa Malaysia KLCI gained 3.16 points or 0.17% to 1,881.92, Jakarta Composite rose by 7.21 points or 0.11% to 6,293.96 and Nikkei 225 was up by 9.38 points or 0.04% to 21,844.91.

On the other side, Taiwan Weighted declined 144.1 points or 1.32% to 10,810.45, Hang Seng slipped 89.42 points or 0.29% to 30,226.17, KOSPI Index lost 5.74 points or 0.23% to 2,451.75 and Shanghai Composite was down by 20.36 points or 0.65% to 3,090.29.