Benchmarks continue firm trade in morning session

Indian equity benchmarks continued their firm trade in morning session on account of buying in frontline blue chip counters. Oil prices edged lower as a rising rig count in the United States pointed to higher production, but prices held near more than three-year highs and were on track to rise for a second consecutive month. North Korean leader Kim Jong Un told his South Korean counterpart at their historic summit that his country would be willing to give up its nuclear weapons if the US commits to a formal end to the Korean War and a pledge not to attack the North. The sentiments were upbeat after Reserve Bank of India (RBI) further liberalized ECB policy. In a bid to facilitate cheaper access of overseas funds, RBI liberalized External Commercial Borrowings (ECB) Policy by including more sectors in the window.

Separately, after RBI forecast of India’s growth rate at 7.4% in FY19, more and more predictions are putting India’s expected growth rate between 7.3% and 7.5%. Fitch Ratings said that India’s economy will grow 7.3% in FY19 and 7.5% in FY20 as the temporary drag from demonetization and the goods and services tax fades away. Niti Aayog Vice Chairman Rajiv Kumar expects India’s economy to grow by at least 7.5 percent in 2018-19 on the back of improvement in investment cycle and capacity utilization. He added that the government should now concentrate on consolidating the reform initiatives undertaken in the last 47 months. Investors took note of report that the early trend in the March 2018 quarter results season looks encouraging though driven by large companies such as Reliance Industries, Tata Consultancy Services, Infosys, and Wipro. Net sales of a sample of 113 companies that declared results for the quarter grew by 16.9 per cent year-on-year while net profit rose by 3.9 per cent. Excluding banks and financial companies, sales growth improved to 17.5 per cent and net profit growth shot up to 9.6 per cent.

Traders were seen buying in IT, TECK and Realty stocks, while selling was witnessed in Energy and Oil & Gas sector stocks. In scrip specific developments, Jagran Prakashan was trading in green as the company approved buyback of shares. PC Jeweller was trading in green after the company said its board will meet on May 25 to consider a share buyback proposal. Select metal stocks were buzzing after data showed that India has registered a 2.46 per cent rise in crude steel production to 26.363 million tonnes (MT) in the last quarter of 2017-18. The country had produced 25.729 MT during the January-March period of 2016-17.

On the global front, Asian markets were trading in green as tensions in the Korean Peninsula eased and first-quarter earnings shone. China’s manufacturing activities slowed down slightly in April, but services industry picked up. The official Purchasing Managers’ Index (PMI) fell to 51.4 in April, compared to 51.5 in March. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 35,100 and 10,700 levels, respectively. The market breadth on BSE was positive in the ratio of 1355:806, while 109 scrips remained unchanged.

The BSE Sensex is currently trading at 35176.52, up by 206.82 points or 0.59% after trading in a range of 35004.00 and 35198.43. There were 27 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index up by 0.39%, while Small cap index was up by 0.73%.

The top gaining sectoral indices on the BSE were IT up by 1.43%, TECK up by 1.21%, Realty up by 1.10%, FMCG up by 0.88% and Capital Goods up by 0.88%, while Energy down by 1.44% and Oil & Gas down by 0.49% were the only losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.43%, SBI up by 2.41%, TCS up by 1.69%, Mahindra & Mahindra up by 1.64% and Wipro up by 1.63%.

On the flip side, Axis Bank down by 3.14%, Reliance Industries down by 2.59%, ICICI Bank down by 0.19% and Power Grid down by 0.02% were the top losers.

Meanwhile, Niti Aayog Vice Chairman Rajiv Kumar has said that India is likely to clock 7.5 percent Gross Domestic Product (GDP) growth in the financial year 2019, mainly due to improvement in investment cycle and capacity utilization. He also said that the government must now focus on consolidating the reform initiatives undertaken in the last 47 months.

Kumar further said that the economic environment is extremely positive and optimistic. He noted that the investment cycle has certainly turned upwards. He pointed out that the capacity utilization has increased at a rate of 74 percent and the inflation is still well below the target.

Talking on reform measures that the government should take in the next one year, NITI Aayog VC said “The government has taken so many reforms and so many initiatives that I think it is now time to consolidate rather than plan for new initiatives.”

The CNX Nifty is currently trading at 10748.55, up by 56.25 points or 0.53% after trading in a range of 10704.60 and 10755.90. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were SBI up by 2.49%, Yes Bank up by 2.36%, TCS up by 1.80%, HDFC up by 1.77% and Vedanta up by 1.77%.

On the flip side, Axis Bank down by 3.25%, Reliance Industries down by 2.83%, UPL down by 2.66%, Indiabulls Housing down by 0.46% and BPCL down by 0.40% were the top losers.

The Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 1.79 points or 0.1% to 1,865.26, KOSPI Index increased 16.43 points or 0.66% to 2,508.83, Jakarta Composite increased 37.03 points or 0.63% to 5,956.26, Taiwan Weighted increased 96.65 points or 0.92% to 10,650.08 and Hang Seng increased 460.58 points or 1.52% to 30,741.25.

Shanghai and Tokyo Stock Exchange were closed on account of National holiday.