Sensex, Nifty turn volatile

Key Indian benchmarks turned volatile in late afternoon session, with the Sensex and Nifty altering between green and red terrain, amid mixed cues from European markets. Traders got cautious with the United Nations’ (UN) latest report stating that the Goods and Services Tax (GST) as well as protracted issues of corporate and bank balance sheet problems pushed India's economic growth downward in 2017. However the report said a gradual recovery is expected and the country's economy is forecast to grow at 7.2 per cent in 2018. Some concerns also came with private report stating that India has said that the US’ move to impose higher tariffs on steel and aluminium products on grounds of national security are an abuse of global trade provisions that could spiral into a trade war. Besides, heavy selling in Consumer Durables and Capital Goods stocks along with sluggish broader markets, too weighed on the domestic sentiments. However, the further downside were restricted with Union Minister Suresh Prabhu’s statement that the commerce ministry has decided to formulate a comprehensive action plan to boost India's trade with Africa which is relatively small at present. A series of engagements have been lined up in different parts of Africa to discuss ways to promote trade and investments between the two regions. Some support also came with a private report stating that India is the only major world economy with a potential for talent surplus. The report further said that India may even challenge America's position in technology, media and telecommunications (TMT) sector.

On the global front, European markets were trading mixed, as investors await an announcement by US President Donald Trump on whether he would withdraw from a landmark nuclear deal with Iran. Asian markets were trading in green. Back home, in scrip specific development, NBCC (India) gained after the company secured total business of around Rs 2392 crore in the month of April, 2018. The company had secured total Business of around Rs 769.96 crore in March, 2018.

The BSE Sensex is currently trading at 35191.16, down by 16.98 points or 0.05% after trading in a range of 35136.01 and 35388.87. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.23%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Bankex up by 1.08%, Realty up by 0.88%, PSU up by 0.77%, FMCG up by 0.31% and Utilities up by 0.25%, while Consumer Durables down by 1.43%, Capital Goods down by 1.07%, Consumer Disc down by 0.49%, Auto down by 0.45% and Metal down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 7.14%, Power Grid Corporation up by 1.55%, SBI up by 1.38%, Axis Bank up by 1.01% and TCS up by 0.86%. On the flip side, Mahindra & Mahindra down by 2.64%, Indusind Bank down by 2.03%, Larsen & Toubro down by 1.97%, Infosys down by 1.44% and Yes Bank down by 1.41% were the top losers.

Meanwhile, pointing out the various factors like the recently introduced Goods and Services Tax (GST) as well as protracted issues of corporate and bank balance sheet problems, the United Nations (UN) in its latest report has said that Indian economic growth slowed down in 2017 to 6.6% from 7.1% in 2016, but a gradual recovery is expected and noted that the country is forecast to grow at 7.2% in 2018 and 7.4% in 2019.

UN report also expects revival in private investment as the country’s corporate sector adjusts to GST, infrastructure spending increases and corporate and bank balance sheets improve with government support. Further it said that the government’s reform measures such as new bankruptcy code and the recapitalization package for public sector banks would also support a gradual recovery in private investment ad highlighted that consumption is also strengthened, with faded impacts of note ban.

However, the report also pointed out the issue of rising non-performing assets, saying that bad loans in India have got doubled, and defaults on corporate bonds and syndicated loans have surged in recent years. By mid-2017, distressed bank loans reached a record high of 9.5 trillion rupees ($ 148 billion), but more recent revelations suggest that the actual figure may be higher. In view of this, UN expressed need to address this problem effectively and if it does not happen then India will continue to face weak private investment and modest economic growth.

The CNX Nifty is currently trading at 10711.80, down by 3.70 points or 0.03% after trading in a range of 10689.40 and 10758.55. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 6.97%, HPCL up by 3.16%, Eicher Motors up by 2.12%, Power Grid Corporation up by 1.89% and Grasim Industries up by 1.67%. On the flip side, Mahindra & Mahindra down by 2.57%, Indusind Bank down by 2.29%, Larsen & Toubro down by 2.03%, Bajaj Finance down by 1.82% and Infosys down by 1.44% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 17.35 points or 0.95% to 1,845.55, Shanghai Composite increased 24.85 points or 0.79% to 3,161.50, Nikkei 225 increased 41.53 points or 0.18% to 22,508.69, Taiwan Weighted increased 86.47 points or 0.82% to 10,691.38 and Hang Seng increased 408.55 points or 1.36% to 30,402.81. On the flip side, Jakarta Composite decreased 128.74 points or 2.19% to 5,756.36 and KOSPI Index decreased 11.57 points or 0.47% to 2,449.81.

European Markets were trading mixed; UK’s FTSE 100 increased 9.88 points or 0.13% to 7,577.02 and Germany’s DAX decreased 79.1 points or 0.61% to 12,869.04. On the flip side, France’s CAC decreased 20.3 points or 0.37% to 5,511.12.