Benchmarks add strength in morning session

Indian equity benchmarks added strength to trade with modest gains in morning session on account of buying in frontline blue chip counters. Investors are eyeing for corporate earnings to get further market direction. The rupee fell further on Wednesday to hit a fresh 7-month low against the dollar. The rupee is under pressure on worsening trade scenario and a fresh ripple of geopolitical tensions. Oil prices edged up, lifted by a reported fall in US crude inventories and the ongoing risk of supply disruptions. The sentiments were upbeat after the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) 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 demonetization and goods and services tax (GST). Separately, Union Minister Suresh Prabhu said that the commerce and industry ministry is working on different areas such as improving standards of products and identifying new markets and goods to promote the country’s exports. He said the ministry is also working on ways to promote shipments in Africa as the region holds huge potential.

Meanwhile, shares of hotel companies were buzzing in today’s trade amid expectations of the holiday season bringing in robust demand, which will result in higher room rates and increased occupancy. Oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) were trading in red as oil prices edged up. Majority of sugar stocks were trading in red after Indian Sugar Mills Association (ISMA) said that sugar production in the current season up to April 15, has crossed the expected levels and the Indian sugar industry has already produced 299.80 lakh tonne. It added that the actual sugar production up to April 15 is already 50 lakh tonne more than the estimated sugar consumption for the whole season up to September 30.

Traders were seen buying in FMCG, Telecom and Realty stocks, while selling was witnessed in Consumer Durables, Oil & gas and Energy sector stocks. In scrip specific development, Punjab and Sindh Bank (PSB) was trading in red after the Central Bureau of Investigation (CBI) on Tuesday said that it had filed a fresh case against the directors of three companies on the charge of cheating a consortium of five banks led by PSB to the tune of Rs 621 crore. The agency action came on Punjab and Sindh Bank complaint on April 11, wherein it was alleged that the loan was not used for the purpose it was sanctioned.

On the global front, Asian markets were trading mostly in green. China’s better-than-expected economic growth in the first quarter of this year was backed by a pickup in construction and manufacturing. According to data released by the National Bureau of Statistics, the construction and manufacturing sector grew 6.3% from a year earlier, accelerating from a 5.7% pace in the fourth quarter. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 34,400 and 10,550 levels, respectively. The market breadth on BSE was positive in the ratio of 1144:1027, while 107 scrips remained unchanged.

The BSE Sensex is currently trading at 34428.71, up by 33.65 points or 0.10% after trading in a range of 34364.79 and 34505.19. 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 0.17%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were FMCG up by 0.82%, Telecom up by 0.63%, Realty up by 0.46%, Healthcare up by 0.34% and Power up by 0.31%, while Consumer Durables down by 0.52%, Oil & Gas down by 0.37%, Energy down by 0.31%, IT down by 0.21% and Bankex down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.29%, Yes Bank up by 1.28%, Wipro up by 1.05%, Bharti Airtel up by 0.96% and ONGC up by 0.77%.

On the flip side, Mahindra & Mahindra down by 1.11%, Coal India down by 0.75%, Kotak Mahindra Bank down by 0.73%, Axis Bank down by 0.48% and IndusInd Bank down by 0.38% were the top losers.

Meanwhile, Commerce and Industry Minister Suresh Prabhu has said that the central government is actively working with the United States (US) to resolve all trade issues even as the US has decided to review India’s eligibility to enjoy duty-free access for certain products under a tax benefit scheme. He noted that the US treasury department also put India on a watch list of countries with potentially questionable foreign exchange and macroeconomic policies. Besides, he said that the US has dragged India to World Trade Organisation’s (WTO) dispute settlement mechanism challenging Indian export incentive schemes.

The minister has said that the US is an important trading partner of India. Noting that India’s largest trade surplus was with the US, he said that India enjoys a special relationship with the US, not just restricted to trade, but that is multi-dimensional and strategic. Further, he observed that more than four million Indians are living in the US and it is one of the major markets for goods and services exports. He noted that “In a situation like this, the US has taken certain unilateral actions. So we will follow the rules of WTO (World Trade Organisation) as well as we will talk to them. We are completely in the control of situation”.

Talking on the issue of slapping import tariffs of 25 percent on steel and 10 percent on aluminium by the US, Prabhu said India’s exports of these two commodities to America is not significant. He said “I can assure you one thing that the only guiding principle for engagement with the US is to protect India's commercial interest in its entirety”. He indicated that as many as 3,500 Indian products from sectors such as chemicals, medical devices and engineering get duty free access to the US market under the Generalized System of Preferences (GSP), introduced in 1976. He added that the review can impact exports of those 3,500 Indian products to the US market as removal of duty benefits would make those items uncompetitive.

The CNX Nifty is currently trading at 10559.80, up by 11.10 points or 0.11% after trading in a range of 10539.55 and 10579.40. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.47%, Cipla up by 2.38%, Indiabulls Housing up by 1.82%, ITC up by 1.53% and GAIL India up by 1.40%.

On the flip side, HPCL down by 2.36%, BPCL down by 1.42%, Titan Company down by 1.33%, Indian Oil Corporation down by 1.20% and HCL Tech down by 1.19% were the top losers.

The Asian markets were trading mostly in green; Jakarta Composite increased 19.97 points or 0.32% to 6,305.73, KOSPI Index increased 20.71 points or 0.84% to 2,474.48, Taiwan Weighted increased 29.13 points or 0.27% to 10,839.58, Hang Seng increased 134.35 points or 0.45% to 30,197.10 and Nikkei 225 increased 307.23 points or 1.41% to 22,154.82.

On the other hand, FTSE Bursa Malaysia KLCI decreased 3.75 points or 0.2% to 1,876.74 and Shanghai Composite decreased 3.44 points or 0.11% to 3,063.36.