Bourses continue to hold small gains in afternoon deals

Indian equity benchmarks continued to hold on to small gains in early afternoon session on the back of buying in front line blue chip counters. Sentiment on the street remained positive with a report stating that India’s economy is forecast to grow at 7.2 per cent in 2018 and private investment in India is expected to revive as the corporate sector adjusts to Goods and Services Tax (GST), infrastructure spending increases and corporate and bank balance sheets improve with government support. However, gains were limited as anxiety remained among the traders with report that India slipped to the 6th position globally in the business optimism index for the first quarter of this year. The business sentiment in India has been the weakest since 2014 in the first quarter, the report also stated that the confidence has been shaken since the third quarter of 2017 with weakening currency and a surge in oil prices. Separately, the government will come out with a Producers Price Index (PPI) next month for 10 services including telecom and railways on experimental basis. The move will help to track inflation in these services, which will also include ports, postal, insurance, banking, transportation and air travel. In scrip specific development, Tata Elxsi was up by around two percent on licensing FalconEye to pan-European Media and Telecommunications Company.

On the global front, Asian markets were trading mixed, following President Donald Trump's announcement that the US would pull out of the Iran nuclear deal. Back home, the BSE Sensex is currently trading at 35264.69, up by 48.37 points or 0.14% after trading in a range of 35134.20 and 35296.45. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.38%, while Small cap index was up by 0.08%.

The top gaining sectoral indices on the BSE were Telecom up by 0.91%, Capital Goods up by 0.67%, IT up by 0.51%, TECK up by 0.51% and Industrials was up by 0.46%, while PSU down by 0.67%, Oil & Gas down by 0.58%, Utilities down by 0.29%, Power down by 0.27% and Healthcare was down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.28%, Tata Motors - DVR up by 3.03%, Asian Paints up by 1.53%, Bharti Airtel up by 1.47% and Tata Steel up by 1.09%. On the flip side, SBI down by 1.20%, Mahindra & Mahindra down by 0.94%, HDFC down by 0.88%, Maruti Suzuki down by 0.57% and Adani Ports &SEZ down by 0.41% were the top losers.

Meanwhile, Credit ratings agency, Crisil Ratings in its latest report has said that India’s fast moving consumer goods (FMCG) sector is likely to post a net revenue growth of 11-12 percent in fiscal 2019, up 300-400 basis points compared with 8 percent in fiscal 2018, on the back of a revival in rural demand and new product launches. It noted that this will lead to a significant improvement in the operating performance of FMCG companies and benefit their credit profiles.

The ratings agency has stated that the rural economy may get a leg-up from the government’s decision of increasing the minimum support price (MSP) for pulses, oil seeds and paddy for the upcoming kharif season. Besides, a favourable monsoon rainfalls and a more non-agriculture rural employment, will increase the disposable income of the farmers and consumption demand. From the marketers’ side, it said that continuing product launches and greater acceptance of ayurvedic and herbal products will also help. Therefore, it pointed out that revenue growth from the rural segment which contributes 40-45 percent of the total income of the sector, will improve to 15-16 percent in fiscal 2019 compared to 10 percent estimated for fiscal 2018.

According to the report, growth had recovered partially from the 5-percentage point range during fiscals 2016 and 2017, a period that saw sluggish rural demand resulting from weak monsoons, intense competition and demonetisation. On the other hand, it noted that revenue growth from the urban segment is likely to stay steady at 8 percent in FY19. It also said that while mid-sized and medium-sized firms will have an edge because of better operating efficiencies in the GST regime and may clip at 15-17 percent, large firms are seen growing topline by 300-400 bps to 11-12 percent.

The CNX Nifty is currently trading at 10726.65, up by 8.85 points or 0.08% after trading in a range of 10689.85 and 10734.10. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.45%, Bharti Infratel up by 1.64%, Titan Co up by 1.54%, Bharti Airtel up by 1.50% and Asian Paints up by 1.12%. On the flip side, BPCL down by 2.70%, Ultratech Cement down by 2.29%, HPCL down by 2.18%, Indian Oil Corp. down by 1.65% and SBI down by 1.26% were the top losers.

Asian markets were trading mixed; Taiwan Weighted increased 11.97 points or 0.11% to 10,703.35, Hang Seng was up by 28.49 points or 0.09% to 30,431.30 and Jakarta Composite added 45.56 points or 0.79% to 5,820.28.

On the flip side, Nikkei 225 decreased 99.81 points or 0.44% to 22,408.88, Shanghai Composite shed 15.66 points or 0.5% to 3,145.83 and KOSPI Index was down by 5.83 points or 0.24% to 2,443.98.