Equity benchmarks continue to trade in positive territory

Domestic equity benchmarks continued their trade in positive territory in late morning session. Investors took some support from the 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. The government has approved Rs 5,000 crore plan to promote 12 champion services sectors such as IT, tourism and hospitality. Traders’ sentiments were also optimistic with a report highlighting that the FY19 target of Rs 12.9 trillion mop-up seems feasible, with the GST collection in April crossing the Rs 1 trillion mark. The report further stated that the CGST component stood at Rs 18,652 crore, SGST contributed Rs 25,704 crore, and the IGST component stood at Rs 50,548 crore. Some support also came after Asian Development Bank (ADB) projected that India will remain the fastest growing Asian nation with 7.3 per cent growth in 2018-19, and 7.6 per cent in 2019-20. The Indian economy is forecast to grow at 6.6 per cent in the 2017-18 fiscal ended March 31, slower than 7.1 per cent in 2016-17. 

Asian markets were trading mostly in green, after the release of mixed US jobs data for the month of April. While the Labor Department's report showed weaker than expected job growth in the month of April, the unemployment rate fell to its lowest level in over seventeen years. Back home, telecom stocks remained in limelight after a report stated that the government's plan to attract $100 billion (Rs 6.5 lakh crore) investment in the telecom sector by 2022 is conservative. The government draft of the new telecom policy (NTP) 'National Digital Communications Policy 2018' aims to create 40 lakh new jobs by 2022. In scrip specific development, Ashoka Buildcon gained with arm executing concession agreement with National Highways Authority of India. Besides, Power Grid surged on inking a MoU with the Ministry of Power to incur capital expenditure of Rs 25,000 crore for the current fiscal.

The BSE Sensex is currently trading at 35033.99, up by 118.61 points or 0.34% after trading in a range of 34977.74 and 35061.56. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.25%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.82%, Realty up by 1.66%, Metal up by 1.56%, Basic Materials up by 1.06% and Consumer Disc was up by 0.70%, while Healthcare down by 0.96%, IT down by 0.02% were the only losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.77%, Tata Steel up by 1.76%, Hindustan Unilever up by 1.45%, Bajaj Auto up by 1.44% and SBI was up by 1.32%. On the flip side, Coal India down by 1.95%, Dr. Reddys Lab down by 1.85%, Sun Pharma down by 1.73%, TCS down by 1.05% and Asian Paints was down by 0.67% were the top losers.

Meanwhile, the study, commissioned by the textiles ministry and conducted by the Indian Institute of Foreign Trade (IIFT), has stated that there is need to relax set of labour laws and boost incentives in order to promote India as most preferred sourcing destination in textiles sector. It also suggested that strengthening the eco-system for textile exports, integrating fragmented textile value chain and investing in skill up-gradation as measures required to boost India's sourcing potential.

According to the report, outdated labour laws within the textile sector hamper India from becoming labour competitive. It also said that India is not perceived to be a low cost labour destination. It observed that the incentives offered in India are much below that offered in China, thereby making Indian products lose out on being price competitive in the global markets. Besides, it called for innovation in terms of new products, new business models and collaborations; digitisation of entire supply chain from product development to delivery and ensuring compliances related to quality and legal issues, so that India is recognised for producing world class products.

The report further said that IIFT also believes that key to success is encouraging product as well as market diversification for varied textiles & apparel products and clear positioning of Indian Textiles in International Markets. As per the study, the poor state of roads and connectivity around weaver hubs have led to reduced number of personal visits by buyers, leading to greater dependence on buying agents. Moreover, it said that the high import cost of latest machines deter many small manufacturers from upgrading to the latest technology, thereby contributing to compromises on quality.

The CNX Nifty is currently trading at 10657.60, up by 39.35 points or 0.37% after trading in a range of 10635.65 and 10662.75. There were 31 stocks advancing against 18 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Hindalco up by 2.90%, Vedanta up by 2.22%, Titan Co up by 2.12%, Zee Entertainment up by 2.01% and Tata Steel was up by 1.89%. On the flip side, Lupin down by 3.01%, Dr Reddys Lab down by 1.92%, Coal India down by 1.84%, Sun Pharma down by 1.66% and TCS was down by 1.11% were the top losers.

Asian markets were trading mostly in green, Shanghai Composite surged 40.49 points or 1.31% to 3,131.53, Jakarta Composite gained 49.06 points or 0.85% to 5,841.41, Taiwan Weighted soared 75.54 points or 0.72% to 10,604.91 and Hang Seng was up by 130.8 points or 0.44% to 30,057.30.

On the other hand, Nikkei 225 slipped 15.7 points or 0.07% to 22,457.08 and FTSE Bursa Malaysia KLCI was down by 12.91 points or 0.7% to 1,828.92.