Benchmarks trade flat in early deals

Indian equity benchmarks made cautious start and are trading flat in early deals, as traders remained on sidelines ahead of an informal meeting between Prime Minister Modi and China’s Xi Jinping and developments around the impeachment notice against Chief Justice of India Dipak Misra. However, market participants are getting some solace with Reserve Bank of India (RBI) Governor Urjit Patel’s statement that India’s real GDP growth is expected to expand at 7.4 per cent in 2018-19, with risks evenly balanced. HE added that several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained. Some support also came with Economic Affairs Secretary Subhash Chandra Garg’s statement that India is poised to remain as the fastest growing large economy in the world. In 2018, we expect India to grow at over 7.4 percent. He added that India’s GDP is expected to reach a volume of $5 trillion by FY2025 by leveraging on digitisation, globalisation, favourable demographics and structural reforms.

On the global front, all the Asian markets were trading in red at this point of time as investors kept an eye on rising U.S. Treasury yields and digested declines in technology stocks seen stateside. The US markets ended lower on Friday as traders remained on sidelines ahead of on reports on new and existing home sales, consumer confidence, durable goods orders and first quarter GDP.

Back home, stocks related to steel sector remained under pressure despite report that India’s crude steel output is expected to soar by 38 per cent to 140 million tonnes (MT) by the end of this year. In scrip specific developments, Amarjothi Spinning Mills edged higher on getting nod to sell 9.19 acres land and Dilip Buildcon surged on incorporating three new SPVs.

The BSE Sensex is currently trading at 34404.50, down by 11.08 points or 0.03% after trading in a range of 34259.27 and 34500.55. There were 12 stocks advancing against 19 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 0.33%.

The top gaining sectoral indices on the BSE were Realty up by 1.03%, IT up by 0.81%, TECK up by 0.70%, Oil & Gas up by 0.68% and Healthcare was up by 0.61%, while Metal down by 0.61%, Bankex down by 0.41%, Consumer Durables down by 0.18%, FMCG down by 0.08% and Utilities was down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.13%, Indusind Bank up by 1.57%, Yes Bank up by 1.13%, Sun Pharma up by 1.07% and Mahindra & Mahindra up by 0.75%. On the flip side, ICICI Bank down by 2.11%, Hero MotoCorp down by 1.04%, Axis Bank down by 0.92%, HDFC Bank down by 0.86% and Coal India down by 0.86% were the top losers.

Meanwhile, the Reserve Bank of India’s (RBI) Governor Urjit Patel has expressed hope that India’s pace of economic growth will accelerate in the fiscal year 2018-19. He noted that the country’s economy turned in a resilient performance in 2017-18. He also said that on the whole, real gross domestic product (GDP) growth is expected to expand at 7.4% in FY19, with risks evenly balanced and added that global demand has been improving, which should encourage exports and boost fresh investments.

Patel said that with the help of a turnaround in investment demand, there was a strong rebound in the second half of the year, even though the real gross domestic product (GDP) growth was moderated to 6.6% from 7.1% a year ago. He pointed out that the growth was also supported by acceleration in manufacturing, rising sales growth, a pick-up in capacity utilisation, strong activity in the services sector and a record agricultural harvest. He added that several factors are expected to help accelerate the pace of growth in FY19 and there are now clearer signs that the revival in investment activity will be sustained.

Talking about inflation, RBI Governor said that since November 2016, headline consumer price inflation had generally remained below the medium-term target of 4%. An unusual spike in vegetables prices pushed up inflation to a recent peak of 5.2% in December, but it eased in subsequent months to reach 4.3% in March. He added that several factors were likely to influence the inflation outlook, including a possible moderation in food prices if the monsoon turned out to be normal and was supported by an effective food supply management.

Highlighting that the government is committed to fiscal prudence, Patel said aided by buoyancy in tax revenues and rationalisation of subsidies, the gross fiscal deficit (GFD) of the central government has been steadily brought down since 2013-14 to 3.5% of GDP in 2017-18 without compromising on public investment requirements and social sector spending. He said that the GFD is budgeted lower at 3.3% in 2018-19. The government has accepted a debt rule that will bring down the debt-to-GDP ratio to 40% over a period of time by 2024-25.

The CNX Nifty is currently trading at 10573.60, up by 9.55 points or 0.09% after trading in a range of 10514.95 and 10592.80. There were 24 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were HPCL up by 2.93%, TCS up by 2.57%, BPCL up by 2.42%, Indian Oil Corporation up by 2.31% and Zee Entertainment up by 1.89%. On the flip side, ICICI Bank down by 2.20%, Bharti Infratel down by 1.69%, Hero MotoCorp down by 1.07%, Tata Steel down by 0.97% and Hindalco down by 0.90% were the top losers.

All the Asian markets are trading in red; Hang Seng decreased 108.11 points or 0.36% to 30,310.22, Taiwan Weighted declined 81.66 points or 0.76% to 10,697.72, Nikkei 225 slipped 51.36 points or 0.23% to 22,110.88, Jakarta Composite fell 25.81 points or 0.41% to 6,311.88, FTSE Bursa Malaysia KLCI shed 6.15 points or 0.33% to 1,881.60, KOSPI Index dipped 4.75 points or 0.19% to 2,471.58 and Shanghai Composite was down by 3.26 points or 0.11% to 3,068.28.