Benchmarks trade flat; Nifty hovers near 10,550

Indian equity benchmarks, after making an optimistic start, turned flat in early deals amid lack of any major domestic cues. However, traders are getting some solace with International Monetary Fund’s (IMF) statement that India’s GDP growth will accelerate in the current and next fiscal years as structural reforms raise potential output. GDP is forecast to grow 7.4 percent in the current fiscal from 6.7 percent in FY18 and accelerate further in FY20 to 7.8 percent. Market participants are also getting some comfort with Commerce and Industry & Aviation Suresh Prabhu’s statement that the government is working with the US to resolve all trade issues even as America has decided to review India's eligibility to enjoy duty-free access for certain products under a tax benefit scheme. Meanwhile, the group of ministers (GoM) on Tuesday worked out a revamped return for goods and services tax (GST) to help ease the burden on businesses.

On the global front, Asian markets were trading mostly in green at this point of time, as investors’ confidence stayed firm on back of Wall Street’s advance following strong earnings. The US markets ended higher on Tuesday as traders reacted positively to a report from the Commerce Department showing a rebound in housing starts in the month of March.

Back home, stocks related to sugar sector edged lower despite report that India's sugar production has touched an all-time high of 29.98 million tonnes till April 15 in the current season on higher cane output, leading to a surge in arrears to farmers at over Rs 20,000 crore. In scrip specific developments, Cadila Healthcare surged on divesting entire stake in Bremer, while Future Consumer gained on making further investment in IFPPL.

The BSE Sensex is currently trading at 34387.51, down by 7.55 points or 0.02% after trading in a range of 34364.79 and 34505.19. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.10%, while Small cap index was up by 0.12%.

The top gaining sectoral indices on the BSE were FMCG up by 0.62%, Telecom up by 0.54%, Healthcare up by 0.36%, Realty up by 0.19% and Basic Materials was up by 0.15%, while Oil & Gas down by 0.29%, Consumer Durables down by 0.23%, Energy down by 0.23%, Capital Goods down by 0.22% and IT was down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.23%, ITC up by 0.95%, Yes Bank up by 0.89%, ONGC up by 0.75% and Adani Ports up by 0.61%. On the flip side, Mahindra & Mahindra down by 1.10%, Axis Bank down by 0.85%, Infosys down by 0.83%, Tata Motors - DVR down by 0.52% and Kotak Mahindra Bank down by 0.44% were the top losers.

Meanwhile, acknowledging structural reforms undertaken by the government in recent years, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) has maintained its forecast for India’s gross domestic product (GDP) growth at 7.4% for 2018 and 7.8% for 2019. It noted that India would re-emerge as one of the fastest growing major economies with growth picking up after falling sharply in the second quarter of 2017, due to factors such as demonetisation and goods and services tax (GST). However, the IMF growth rate projection is unchanged since October.

As per the WEO, the latest forecast is unchanged with the short-term firming of growth driven by a recovery from the transitory effects of the currency exchange initiative and implementation of the national GST, and supported by strong private consumption growth. It also stated that India has made progress on structural reforms in the recent past, including through the implementation of the GST, which will help reduce internal barriers to trade, increase efficiency, and improve tax compliance. It added that the medium-term growth outlook for India is strong, an important challenge is to enhance inclusiveness.

Expressing some caution, the IMF said that India’s high public debt and recent failure to achieve the budget’s deficit target call for continued fiscal consolidation into the medium term to further strengthen fiscal policy credibility. The main priorities for lifting constraints on job creation and ensuring that the demographic dividend is not wasted are to ease labour market rigidities, reduce infrastructure bottlenecks, and improve educational outcomes. It also said that growth in China and India last year was supported by resurgent net exports and strong private consumption, respectively, while investment growth slowed.

On the global growth, the report said that global economy is on course to grow 3.9% this year, the fastest pace since 2011, with every major economy poised to grow for the second year in a row. However, it warned that performance could be curtailed by trade barriers. Besides, it said China is forecast to slow from 6.9% in 2017 to 6.6% in 2018 and further to 6.4% in 2019.

The CNX Nifty is currently trading at 10555.95, up by 7.25 points or 0.07% after trading in a range of 10539.55 and 10579.40. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.79%, Cipla up by 2.59%, Wipro up by 1.67%, Ultratech Cement up by 1.15% and Yes Bank up by 1.12%. On the flip side, BPCL down by 1.72%, HPCL down by 1.68%, Indian Oil Corporation down by 1.08%, Mahindra & Mahindra down by 0.91% and Hindalco down by 0.88% were the top losers.

Asian markets are trading mostly in green; Jakarta Composite increased 20.27 points or 0.32% to 6,306.04, Taiwan Weighted gained 24.29 points or 0.22% to 10,834.74, KOSPI Index surged 26.8 points or 1.09% to 2,480.57, Hang Seng added 83.66 points or 0.28% to 30,146.41 and Nikkei 225 was up by 318.27 points or 1.46% to 22,165.86.

On the flip side, Shanghai Composite decreased 11.36 points or 0.37% to 3,055.44 and FTSE Bursa Malaysia KLCI was down by 3.95 points or 0.21% to 1,876.54.