Local bourses hold gains in early afternoon deals

Indian equity benchmarks held their gains in early afternoon session, on positive global leads and sustained buying by domestic institutional investors. Sentiments on the street remained positive 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. Some support also came 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. Moreover, optimism over corporate earnings along with positive monsoon forecast, also helped key indices to trade in green. In scrip specific development, Artson Engineering was up by over two and half percent on receiving LoI from Tata Projects of approximately Rs 13.53 crore for design, engineering, supply & commissioning of PGRU.

On the global front, Asian markets were trading mostly in green, following a rally on Wall Street as easing trade and Syria concerns allowed investors to concentrate on earnings and upbeat data, while fresh news on US-North Korea talks also provided support. Back home, the BSE Sensex is currently trading at 34473.21, up by 78.15 points or 0.23% after trading in a range of 34364.79 and 34505.19. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were FMCG up by 1.83%, Realty up by 0.82%, Telecom up by 0.79%, Basic Materials up by 0.46% and Capital Goods up by 0.39%, while Consumer Durables down by 0.46%, Energy down by 0.37%, Oil & Gas down by 0.29%, PSU down by 0.13% and IT down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 3.49%, Wipro up by 1.58%, Bharti Airtel up by 1.44%, Yes Bank up by 0.99% and Larsen & Toubro up by 0.68%. On the flip side, Coal India down by 1.03%, Kotak Mahindra Bank down by 0.79%, Mahindra & Mahindra down by 0.62%, Indusind Bank down by 0.41% and Asian Paints down by 0.39% 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 10568.50, up by 19.80 points or 0.19% 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 ITC up by 3.57%, Zee Entertainment up by 2.29%, Ultratech Cement up by 1.72%, Wipro up by 1.65% and Vedanta up by 1.59%. On the flip side, HPCL down by 2.48%, HCL Tech. down by 1.60%, Titan down by 1.25%, BPCL down by 1.08% and Tech Mahindra down by 1.07% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 22.47 points or 0.73% to 3,089.26, KOSPI Index was up by 26.21 points or 1.07% to 2,479.98, Jakarta Composite surged 26.44 points or 0.42% to 6,312.20, Taiwan Weighted added 37.44 points or 0.35% to 10,847.89, Hang Seng increased 230.66 points or 0.77% to 30,293.41 and Nikkei 225 rose 310.61 points or 1.42% to 22,158.20.

On the flip side, FTSE Bursa Malaysia KLCI was down by 3.95 points or 0.21% to 1,876.54.