Benchmarks trade with modest gains in morning session

Indian equity benchmarks continued their trade in green in morning session on account of buying in frontline blue chip counters. The rupee inched up against the dollar at the open on Thursday. Hit by a combination of higher oil prices, rising external vulnerabilities and a sharp slowdown in portfolio flows, the rupee is likely to remain prone to further depreciation pressures. The sentiments were upbeat after the Commerce Department data enlightened that India’s global trade increased by 16.32% to $767.9 billion in 2017-18. In 2016-17, the trade stood at $660.2 billion. The data further highlighted that while India’s global trade grew by 16.32% between 2016-17 and 2017-18, India’s total trade with LAC (Latin American countries) grew by 19.63%. It said that bilateral trade with LAC including Bolivia, Peru, Chile and Brazil has recorded healthy growth in 2017-18 as per the provisional numbers.  Separately, bolstering the government’s credentials on job creation, for the first time, payroll data released by the Employees’ Provident Fund Organisation (EPFO) and the National Pension System (NPS) showed at least 2.2 million formal jobs were added over the six months to February. The EPFO data shows 3.1 million new additions across age groups over this period. The data will provide comfort to the government which has been facing criticism over sluggish job creation.

Meanwhile, the upside was, however, capped after a foreign brokerage reported that the Reserve Bank of India (RBI) is expected to hike key policy rates by 25 basis points in June, largely on account of sharp increase in crude oil prices over the last few months. The report added that higher global crude oil prices are net negative for the Indian economy in almost all aspects - inflation, fiscal deficit, current account deficit, rupee etc. - and may need a pre-emptive response from the central bank to reduce pipeline risks and strengthen domestic and external macro stability. Mixed reactions were witnessed in banking stocks after RBI data showed that banks’ credit rose 11.52 percent year-on-year to Rs 84,78,459 crore in the fortnight ended April 13. In the same period ended April 14, 2017, banks advances were at Rs 76,01,970 crore. In the previous fortnight ended March 30, 2018, banks loans grew by 10.32 percent to Rs 86,50,714 crore from Rs 78,41,466 crore in the period ended March 31.

Traders were seen buying in Realty, IT and Energy stocks, while selling was witnessed in Telecom, PSU and Oil & Gas sector stocks. In scrip specific development, oil marketing companies (OMCs) - Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) were trading under pressure on rising crude prices. Oil prices rose supported by an expectation that the United States will re-impose sanctions against Iran, a decline in output in Venezuela and ongoing strong demand. Shah Alloys is locked at upper circuit on entering into settlement agreement with Assets Reconstruction Company India (ARCIL) in respect of credit facilities availed by the company and the settled amount to be paid up to December 31, 2020 and March 31, 2022 respectively.

On the global front, Asian markets were trading mostly in red. South Korea’s economy bounced back last quarter, buoyed by booming exports of data memory chips and a boost from government spending, although private consumption was sluggish. Bank of Korea GDP report showed the economy expanded 1.1 percent in the first quarter, rebounding after contracting by 0.2 percent in the fourth quarter. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 34,500 and 10,550 levels, respectively. The market breadth on BSE was negative in the ratio of 997:1137 while 104 scrips remained unchanged.

The BSE Sensex is currently trading at 34556.33, up by 55.06 points or 0.16% after trading in a range of 34522.31 and 34603.27. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.02%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Realty up by 1.21%, IT up by 0.66%, Energy up by 0.50%, FMCG up by 0.37% and TECK up by 0.28%, while Telecom down by 1.82%, PSU down by 0.54%, Oil & Gas down by 0.36%, Capital Goods down by 0.17% and Power down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.57%, TCS up by 1.33%, Mahindra & Mahindra up by 0.94%, Sun Pharma up by 0.85% and Hindustan Unilever up by 0.72%.

On the flip side, Wipro down by 2.86%, Axis Bank down by 1.69%, Hero MotoCorp down by 1.28%, Bharti Airtel down by 1.07% and ONGC down by 1.06% were the top losers.

Meanwhile, India’s global trade grew by 16.32 percent to $767.9 billion in the fiscal year 2017-18, as compared to trade of $660.2 billion in the year 2016-17. As per the Commerce Department’s latest data, the country’s bilateral trade with Latin American countries (LAC) including Bolivia, Peru, Chile and Brazil has recorded healthy growth in 2017-18.

According to the data, India’s total trade with LAC increased 19.62 percent to $29.33 billion in 2017-18 from $24.52 billion in the previous fiscal. In LAC region, Bolivia has emerged as a major trade partner of India with bilateral trade registering a growth of 205 percent to $772.44 million in 2017-18 from $253 million in 2016-17.

As per the provisional numbers, two-way commerce with Brazil has increased to $8.56 billion in the fiscal year 2017-18 from $6.51 billion in 2016-17. Besides, bilateral trade with Chile grew to $2.85 billion in 2017-18 from $1.90 billion in the previous fiscal.

The CNX Nifty is currently trading at 10582.65, up by 12.10 points or 0.11% after trading in a range of 10572.70 and 10596.10. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.77%, Reliance Industries up by 1.57%, TCS up by 1.26%, Mahindra & Mahindra up by 1.11% and Sun Pharma up by 1.03%.

On the flip side, Bharti Infratel down by 4.15%, Wipro down by 2.91%, HPCL down by 2.18%, BPCL down by 1.98% and Bajaj Finserv down by 1.72% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 202.13 points or 0.67% to 30,126.02, Jakarta Composite decreased 112.74 points or 1.85% to 5,967.11, Taiwan Weighted decreased 55.33 points or 0.52% to 10,504.64 and Shanghai Composite decreased 30.39 points or 0.97% to 3,087.58.

On the other hand, FTSE Bursa Malaysia KLCI increased 5.72 points or 0.31% to 1,857.65, KOSPI Index increased 26.31 points or 1.07% to 2,475.12 and Nikkei 225 increased 102.53 points or 0.46% to 22,317.85.