Benchmarks trade slightly in green in early deals

Indian equity benchmarks made a positive start and are trading slightly in green in early deals on Monday with traders getting some encouragement with ADB Chief Economist Yasuyuki Sawada’s statement that India’s projected GDP growth of over 7 per cent for the current fiscal is amazingly fast and if this momentum is maintained the size of the economy can double within a decade. He also said that the country shouldn’t worry about not achieving 8 per cent growth but focus on increasing domestic demand by reducing the income inequality. Some support also came with Commerce and Industry Minister Suresh Prabhu’s statement that the government is working on a strategy to promote services exports which have the potential to boost overall foreign shipments and economic growth.

Global cues too remained supportive with Asian stock markets trading mostly higher at this point of time following the rally on Wall Street Friday after the release of mixed U.S. jobs data for the month of April. The US markets ended higher on Friday as investors reacted positively to the Labor Department's closely watched monthly employment report.

Back home, gains remained capped as traders remained cautious amid rising oil prices. Market-men also kept an eye on macro data on industrial output and inflation. Investors remained anxious after Srini Raju, Member of the ISB Executive Board, cautioning against the possibility of trade imbalances if corrective measures are not taken, said India may have to shell out huge forex reserves in the changing economic order.

The BSE Sensex is currently trading at 34996.20, up by 80.82 points or 0.23% after trading in a range of 34977.74 and 35061.56. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.06%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.49%, Metal up by 1.11%, Realty up by 0.75%, Basic Materials up by 0.63% and Telecom was up by 0.61%, while Healthcare down by 1.16%, Oil & Gas down by 0.09%, Power down by 0.08%, Utilities down by 0.04% and PSU was down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.73%, Bajaj Auto up by 1.71%, Tata Steel up by 1.33%, Mahindra & Mahindra up by 1.29% and Axis Bank up by 1.24%. On the flip side, Dr. Reddys Lab down by 1.98%, Sun Pharma down by 1.78%, Coal India down by 1.64%, Asian Paints down by 0.64% and TCS down by 0.61% were the top losers.

Meanwhile, terming India’s projected economic growth rate of over 7% for the current fiscal year as amazingly fast, the Asian Development Bank (ADB) Chief Economist Yasuyuki Sawada has said that if this momentum is maintained the size of the Indian economy can double within a decade. He added that gross domestic product (GDP) growth is driven more by domestic consumption than exports. He also said that the country should focus on increasing domestic demand by reducing the income inequality and it shouldn’t worry about not achieving 8% growth rate.

ADB Chief Economist has said that 7% growth is a very good number, but as of now, clocking 8% growth is a big challenge for India. Talking about whether export revival would be important for driving the economic growth, he said that half of India’s growth is driven by private consumption followed by investment and hence domestic market seems to play a major role in growth.

Sawada further said that inequality and poverty reduction would play a very important role in achieving higher growth because consumption can stimulate more production and that can absorb more employment. He also said that poor people, if their livelihood goes up, can be good consumers. He added that tapping the broadening market will be important to achieve higher growth and the services sector too would play a role in pushing up economic growth.

The ADB has projected India to remain the fastest growing Asian nation with 7.3% growth in 2018-19, and 7.6% growth in 2019-20. Moreover, the Indian economy is forecast to grow at 6.6% in the 2017-18 fiscal ended March 31, slower than 7.1% in 2016-17. Besides, the size of India’s economy is about $2.5 trillion currently, making it the sixth largest in the world.

The CNX Nifty is currently trading at 10644.05, up by 25.80 points or 0.24% after trading in a range of 10635.65 and 10659.80. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.70%, Bajaj Auto up by 1.84%, Bharti Airtel up by 1.65%, Tata Steel up by 1.42% and Vedanta up by 1.40%. On the flip side, Lupin down by 3.31%, Dr. Reddys Lab down by 2.07%, Sun Pharma down by 1.72%, Coal India down by 1.66% and HPCL down by 1.54% were the top losers.

Asian markets are trading mostly in green; Shanghai Composite surged 37.31 points or 1.21% to 3,128.34, Jakarta Composite jumped 68.55 points or 1.18% to 5,860.90, Taiwan Weighted added 94.07 points or 0.89% to 10,623.44 and Hang Seng up by 151.13 points or 0.51% to 30,077.63.

On the flip side, Nikkei 225 decreased 44.42 points or 0.2% to 22,428.36 and FTSE Bursa Malaysia KLCI down by 12.74 points or 0.69% to 1,829.09.