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. The sentiments were upbeat taking cue from the Reserve Bank of India (RBI) Governor Urjit Patel’s statement who 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. Separately, Economic Affairs Secretary Subhash Chandra Garg has said that India is poised to remain world’s fastest-growing large economy and it is on track to doubling the size of its economy to $5 trillion by the year 2025, as the economic reforms adopted over last few years and started yielding positive results. Additionally, a top IMF official said that global investors feel that the Indian elephant is ready to run after sustained economic reforms, but underlined the need for implementing these reforms and having a sound banking sector balance sheet for a steady growth path.

The street shrugged off a report which highlighted that high-octane trade dispute between the world’s two largest economies -- China and the US -- will harm global trade this year as it would give rise to protectionism. The report, however, noted that a full-blown trade war - where there is an exchange of tariff or non-tariff barriers that causes significant economic pain to both sides - will be averted, for both economic as well as political reasons. Separately, foreign investors have pulled out nearly Rs 8,000 crore from the Indian capital markets so far in April due to considerable volatility in global markets on account of the ongoing trade negotiations and firming up of bond yields. This comes following an inflow of Rs 11,654 crore in equities last month and an outflow of over Rs 9,000 crore from the debt markets.

Traders were seen buying in IT, Realty and TECK tocks, while selling was witnessed in Metal, FMCG and Consumer Durables sector stocks. In scrip specific development, IT bellwether TCS was trading firm after creating history by becoming the first Indian listed company to hit the coveted $100 billion m-cap figure. ICICI Bank was trading in red as the probe agencies are examining if the bank should have declared three companies - Pacific Capital Services; Supreme Energy (SEPL) and Pinnacle Energy - as related parties. These companies were involved in transfers of shareholdings in NuPower Renewables (NRPL), a company owned by Deepak Kochhar, husband of Chanda Kochhar, the bank’s CEO.

On the global front, Asian markets were trading in red. Japanese manufacturing activity expanded at a faster pace in April than the previous month as output and domestic demand picked up, in a sign the economy is recovering from an expected rough patch in the first quarter. Bank of Japan Governor Haruhiko Kuroda said that the central bank must continue with accommodative monetary easing for some time to meet its 2 percent inflation target. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 34,500 and 10,600 levels, respectively. The market breadth on BSE was positive in the ratio of 1273:904, while 133 scrips remained unchanged.

The BSE Sensex is currently trading at 34552.22, up by 136.64 points or 0.40% after trading in a range of 34259.27 and 34578.92. 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 0.39%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were IT up by 1.85%, Realty up by 1.67%, TECK up by 1.50%, Healthcare up by 0.63% and Energy up by 0.52%, while Metal down by 0.31%, FMCG down by 0.06% and Consumer Durables down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 4.10%, Yes Bank up by 2.35%, IndusInd Bank up by 1.79%, Mahindra & Mahindra up by 1.19% and SBI up by 1.14%.

On the flip side, ONGC down by 1.43%, Hero MotoCorp down by 1.33%, Tata Motors - DVR down by 0.86%, Hindustan Unilever down by 0.72% and Coal India down by 0.67% were the top losers.

Meanwhile, Economic Affairs Secretary Subhash Chandra Garg has said that India is poised to remain world’s fastest-growing large economy and it is on track to doubling the size of its economy to $5 trillion by the year 2025, as the economic reforms adopted over last few years and started yielding positive results. Looking at its steady growth rate, he said that India's economy could grow at over 7.4 percent in the year 2018. Giving an overview of the South Asian countries - Bhutan, Nepal, Bangladesh and Sri Lanka - he said that India continued to be a beacon of growth in the region.

Garg has stated that in the last few years, India has undertaken big bang structural reforms toward formalisation of the economy and fostering digital financial inclusion. He also indicated that India had expanded at an average of 7.2 percent per annum in the last four years and was continuing on the sustainable growth trajectory. Besides, he believed that transformational reforms such as Goods and Services Tax (GST), and initiatives such as Insolvency and Bankruptcy code, recapitalisation of banks, and unclogging of infrastructure investments will support such elevated growth. Elaborating further, he said that India has accorded high priority to addressing its infrastructure deficit to sustain economic growth. He mentioned that government has taken several steps to mobilise funds from various sources, including from capital market, for development of infrastructure, which includes, inter alia, launching of innovative financial vehicles.

Noting that India rolled out the GST regime in July 2017, Economic Affairs Secretary said that within a short span of eight months, monthly revenue collections from GST have crossed $12.7 billion. He also highlighted that the number of dealers registered in the GST database increased by about four million in the fiscal year of the roll-out which is about 60 per cent higher than unique assesses registered earlier in the VAT network in the country. Besides, he said that India’s massive leap in the Ease of Doing Business rankings from 142 in 2014 to 100 in 2017 is testimony to India’s commitment to long-term reforms for an open and vibrant economy. He added that this is also reflected in strong FDI inflows which have grown from $34.3 billion in 2012-13 to $60.1 billion in 2016-17.

The CNX Nifty is currently trading at 10611.50, up by 47.45 points or 0.45% after trading in a range of 10514.95 and 10619.90. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were TCS up by 4.27%, Yes Bank up by 2.37%, HCL Tech up by 1.94%, IndusInd Bank up by 1.87% and Indian Oil Corporation up by 1.72%.

On the flip side, Bharti Infratel down by 1.68%, ONGC down by 1.51%, Hero MotoCorp down by 1.33%, Hindustan Unilever down by 0.88% and Hindalco down by 0.61% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 104.18 points or 0.34% to 30,314.15, Taiwan Weighted decreased 80.51 points or 0.75% to 10,698.87, Nikkei 225 decreased 58.29 points or 0.26% to 22,103.95, Jakarta Composite decreased 26.45 points or 0.42% to 6,311.24, Shanghai Composite decreased 6.81 points or 0.22% to 3,064.73, FTSE Bursa Malaysia KLCI decreased 5.35 points or 0.28% to 1,882.40 and KOSPI Index decreased 5.01 points or 0.2% to 2,471.32.