Local bourses hold gains in early afternoon deals

Indian equity benchmarks held their gains in early afternoon session, on sustained buying by domestic institutional investors. Sentiments on the street remained positive 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. The sentiments were also supported by broadly positive Asian indices coupled with expectations of healthy quarterly earning results. Adding the optimism among the investors, 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. In the currency front, the rupee dropped 24 paise to hit 15-month lows of 67.11 against the American currency in early deals on sustained dollar demand from importers and banks amid sharp rise in the greenback overseas. In scrip specific development, Reliance Infrastructure was up by over a percent with arm bagging the EPC contract for the prestigious Versova-Bandra Sea Link Project in Mumbai.

Asian markets were trading mostly in green, following strong gains on Wall Street after the US jobless rate hit an 18-year low, helping investors overlook unresolved trade tensions between Washington and Beijing. Back home, the BSE Sensex is currently trading at 35020.90, up by 105.52 points or 0.30% 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 was up by 0.23%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.70%, Metal up by 1.55%, Realty up by 1.52%, Basic Materials up by 1.03% and Bankex up by 0.76%, while Healthcare down by 0.79% and IT down by 0.07% were the only losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.28%, Tata Steel up by 1.82%, Hindustan Unilever up by 1.74%, ICICI Bank up by 1.52% and SBI up by 1.43%. On the flip side, Coal India down by 1.84%, Dr. Reddy’s Lab down by 1.71%, Sun Pharma down by 1.40%, TCS down by 1.11% and Asian Paints down by 1.05% 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 10659.35, up by 41.10 points or 0.39% after trading in a range of 10635.65 and 10662.75. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.13%, Axis Bank up by 2.33%, Vedanta up by 2.02%, Tata Steel up by 1.95% and GAIL India up by 1.90%. On the flip side, Lupin down by 3.02%, Coal India down by 1.79%, Dr. Reddy’s Lab down by 1.68%, Sun Pharma down by 1.29% and TCS down by 1.13% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 39.91 points or 1.29% to 3,130.94, Hang Seng rose 63.42 points or 0.21% to 29,989.92, Jakarta Composite was up by 65.31 points or 1.13% to 5,857.65 and Taiwan Weighted added 75.54 points or 0.72% to 10,604.91.

On the flip side, KOSPI Index decreased 25.87 points or 1.04% to 2,461.38, FTSE Bursa Malaysia KLCI was down by 12.72 points or 0.69% to 1,829.11 and Nikkei 225 shed 5.62 points or 0.03% to 22,467.16.