Local bourses hold gains in early afternoon deals

Indian equity benchmarks held their gains in early afternoon session, on account of buying in frontline counters. Sentiments on the street remained positive with International Monetary Fund’s (IMF) statement that the debt level is relatively high in India, but the authorities are planning to bring it down over the medium term with the right policies. In fiscal year 2017-18, India is planning to continue with the consolidation in the current fiscal year and over the medium term. Investors’ sentiments were optimistic ahead of quarterly earnings of some key companies, including TCS, which will release its results later in the day. Traders took note of private report that India and Sweden have signed a joint innovation partnership and agreed on a joint action plan with a seed money of $6 million. Taking forward their defence cooperation including joint production the two sides decided to strengthen their defence partnership. However, further gains got restricted as traders remained cautious ahead of the release of Reserve Bank of India’s latest policy meeting minutes later in the day. In scrip specific development, Vascon Engineers surged over 2% on receiving Work Order from Adhiraj Constructions amounting to Rs 119 crore.

On the global front, Asian markets were trading in green, as improving optimism about the global economy helped investors shake off worries about geopolitical risks for the moment. Back home, the BSE Sensex is currently trading at 34414.40, up by 82.72 points or 0.24% after trading in a range of 34358.91 and 34478.82. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Metal up by 3.78%, Basic Materials up by 2.58%, IT up by 1.05%, TECK up by 0.97% and Realty up by 0.82%, while Consumer Durables down by 0.91%, Oil & Gas down by 0.86%, Energy down by 0.42%, PSU down by 0.25% and Power down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.27%, Yes Bank up by 2.02%, Bharti Airtel up by 1.99%, TCS up by 1.53% and ONGC up by 1.38%. On the flip side, Axis Bank down by 1.11%, HDFC down by 0.95%, Coal India down by 0.89%, ICICI Bank down by 0.60% and Tata Motors down by 0.60% were the top losers.

Meanwhile, International Monetary Fund (IMF) in its Fiscal Monitor report titled ‘Capitalising on Good times’, has said that India, which recovered from the adverse effects of demonetization and implementation of goods and services tax (GST) regime, should now fully implement the new nationwide indirect tax to avoid tax revenue underperformance resulting in cuts to capital expenditures. Besides, it said that relatively buoyant revenues supported by base-broadening efforts and lower capital expenditures were offset by higher spending and lower profit transfers from the Reserve Bank of India (RBI) due to costs incurred during the demonetisation exercise.

IMF has stated that emerging market and middle-income economies’ overall fiscal deficits fell marginally in 2017 for the first time after four years of steady increase, largely by fiscal adjustment among commodity exporters. It indicated that on average, the overall deficit dropped to 4.4 percent of GDP in 2017 as compared to 4.8 percent of GDP in 2016, with diverging fiscal developments across countries. Further, it pointed out that commodity exporters have continued to push through reform to adjust to ‘lower for longer’ oil prices. It added that the headline fiscal balances improved in most commodity exporters, backed by a pickup in commodity prices and by expenditure cuts.

According to the report, in emerging market and developing economies, fiscal policy is appropriately focused on consolidation, especially in those countries that are still adjusting to lower commodity prices. However, it said that the speed of adjustment could be fine-tuned and, in some cases, it can be more ambitious. It noted that several countries could step up the speed of their fiscal adjustment. It added that given the strength of the recovery, Brazil should quicken the pace of consolidation and front-load the fiscal effort.

The CNX Nifty is currently trading at 10560.15, up by 33.95 points or 0.32% after trading in a range of 10546.20 and 10568.90. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 6.55%, Vedanta up by 5.74%, Ultratech Cement up by 3.51%, Tata Steel up by 3.34% and HCL Tech. up by 2.12%. On the flip side, BPCL down by 5.31%, HPCL down by 4.21%, Indian Oil Corporation down by 3.52%, Titan down by 2.47% and HDFC down by 1.13% were the top losers.

The Asian markets were trading in green; KOSPI Index increased 6.12 points or 0.25% to 2,486.10, FTSE Bursa Malaysia KLCI was up by 8.9 points or 0.47% to 1,888.22, Jakarta Composite surged 13.84 points or 0.22% to 6,333.85, Shanghai Composite added 17.47 points or 0.57% to 3,108.87, Nikkei 225 rose 32.98 points or 0.15% to 22,191.18, Taiwan Weighted increased 123.33 points or 1.14% to 10,971.22 and Hang Seng inched up 262.71 points or 0.87% to 30,546.96.