Benchmarks continue to trade in green in morning session

Indian equity benchmarks continued their firm trade in morning session on account of buying in frontline blue chip counters. After a firm opening, the Indian rupee turned negative as it touched the lowest level Since February 17, 2017. Oil markets held firm with prices near late-2014 highs as a decision looms on whether the United States walks away from a deal with Iran and instead re-imposes sanctions on Tehran. The sentiments were upbeat on report which highlighted that with the GST collection in April crossing the Rs 1-trillion-mark, the FY19 target of Rs 12.9 trillion mop-up seems feasible. It added that going forward, with government introducing anti- evasion measures like TDS, TCS and credit matching, these could be hopeful of very good GST collection for FY19. The Asian Development Bank (ADB) enlightened that India’s projected GDP growth of over 7 percent for the current fiscal is amazingly fast and if this momentum is maintained the size of the economy can double within a decade. ADB added that the country shouldn’t worry about not achieving 8 percent growth but focus on increasing domestic demand by reducing the income inequality. Separately, Commerce and Industry Minister Suresh Prabhu has said that the government is working on a strategy to promote services exports which have the potential to boost overall foreign shipments and economic growth. The commerce ministry is working on a strategy to boost share of services in the country’s trade.

Meanwhile, banking stocks were getting support from a report that the Reserve Bank of India (RBI) is likely to give banks yet another leeway in accounting for their losses in government securities, potentially saving them hundreds of crore in provisions which will eventually benefit their bottom line. This exemption could be the latest in a series of steps taken by the central bank to ease banks’ pain after a sharp rise in bond yields and continuing stress due to elevated non-performing assets. Separately, Indian Banks’ Association (IBA) has drawn a plan for measuring implementation of reforms agenda by public sector banks on six specified parameters, which include customer responsiveness, credit off-take and digitalization. This assumes significance as the capital infusion in the state-owned banks is directly linked to their performance on reforms front. Investors shrugged off a report that foreign investors have pulled out over Rs 15,500 crore from the Indian capital market in April, making it the steepest outflow in 16 months, due to surge in global crude prices and rise in yields of government securities here. This comes after an inflow of Rs 11,654 crore in equities in March and an outflow of over Rs 9,000 crore from the debt market during the same period.

Additionally, real estate stocks were buzzing on report that the performance of some of the listed real estate companies in terms of residential sales over the past one year indicates that things are looking up. The pent-up demand for housing is now getting converted into actual sales. While industry experts have been terming the scenario as buyers’ market for some time, home buyers themselves seem to have become more active now. Mixed reactions were witnessed in internet software stocks on report that as much as $2.1 billion worth of M&A (merger and acquisition) transactions were inked in 2017 in the booming Indian e-commerce industry, which may soon witness its largest-ever deal - the proposed Flipkart-Walmart nuptial.

Traders were seen piling position in Realty, Consumer Durables and Metal stocks, while selling was witnessed in Healthcare and IT sector stocks. In scrip specific developments, Vakrangee is locked at lower circuit limit as it has come under the radar of SEBI after auditor PwC has raised some concerns. Auditing major Price Waterhouse quit audit mandate of technology firm, flagging concerns to the corporate affairs ministry about the books of accounts, mainly related to its bullion and jewellery business, even as the company denied any irregularities.

On the global front, Asian markets were trading mostly in green. Chinese central bank governor said that China’s huge trade imbalance with the United States is a structural and long-term problem and should be viewed with rationality. Yi Gang, appointed to head the People’s Bank of China (PBOC) in March, also called for concerted efforts from the United States and China to resolve the trade dispute. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 35,000 and 10,650 levels, respectively. The market breadth on BSE was positive in the ratio of 1255:916, while 118 scrips remained unchanged.

The BSE Sensex is currently trading at 35017.71, up by 102.33 points or 0.29% after trading in a range of 34977.74 and 35061.56. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.24%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Realty up by 1.70%, Consumer Durables up by 1.66%, Metal up by 1.55%, Basic Materials up by 0.97% and FMCG up by 0.84%, while Healthcare down by 1.04% and IT down by 0.08% were the only losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.11%, Tata Steel up by 1.72%, Bajaj Auto up by 1.61%, Hindustan Unilever up by 1.44% and ITC up by 1.21%.

On the flip side, Sun Pharma down by 1.78%, Coal India down by 1.77%, Dr. Reddy’s Lab down by 1.69%, TCS down by 1.20% and Asian Paints down by 1.03% were the top losers.

Meanwhile, Commerce and Industry Minister Suresh Prabhu has said that his ministry is actively working on strategy that seeks to promote services exports, which have the potential to boost overall foreign shipments and India’s real gross domestic product (GDP) growth in the coming years. He noted that services are going to be a big dominant part of the Indian economy.

The minister highlighted that the government has approved an action plan for 12 ‘champion’ services sectors, including IT, tourism and hospitality, for realising their potential through establishment of a Rs 5,000 crore dedicated fund. Besides, he said that more services will be exported from India in the coming years.

Prabhu further said that certain countries are taking steps which are challenging the entire global trading system and India needs to gear up to face the issues. He also said that some countries are questioning the rationale of global trade and putting hurdles in trade. He also asked the Indian Institute of Foreign Trade (IIFT) to work on a strategy to deal with these issues.

The CNX Nifty is currently trading at 10655.45, up by 37.20 points or 0.35% after trading in a range of 10635.65 and 10659.80. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.81%, Vedanta up by 2.43%, Axis Bank up by 2.23%, Titan Company up by 1.95% and Tata Steel up by 1.90%.

On the flip side, Lupin down by 3.09%, Dr. Reddy’s Lab down by 1.75%, Coal India down by 1.73%, Sun Pharma down by 1.53% and TCS down by 1.28% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 38.7 points or 1.25% to 3,129.74, Jakarta Composite increased 49.06 points or 0.85% to 5,841.41, Taiwan Weighted increased 89.33 points or 0.85% to 10,618.70 and Hang Seng increased 149.56 points or 0.5% to 30,076.06.

On the other hand, Nikkei 225 decreased 24.7 points or 0.11% to 22,448.08 and FTSE Bursa Malaysia KLCI decreased 12.91 points or 0.7% to 1,828.92.

South Korea Stock Exchange was closed on account of National holiday.