Markets extend gains in last leg of trade

Indian equity benchmarks extended their gains and are trading in fine fettle in last leg of trade as traders continue to take support with report where International Monetary Fund (IMF) in its latest Asia and Pacific Regional Economic Outlook report has restated that the country will be the fastest growing major economy in 2018, with a growth rate of 7.4%, and will grow further to 7.8% in 2019. Firm opening in European counters too aided sentiments helped by a rally for energy stocks as oil prices gained. Back home, broader indices continue to have a day of underperformance to the benchmarks on report that India slipped to the 6th position globally in the business optimism index for the first quarter of this year. Business optimism is however at an all-time high globally with the index at net 61%, the highest figure recorded in 15 years of research. In scrip specific developments, Tata Motors advanced with arm reporting retail sales of 45,180 units in April 2018, however, Godrej Consumer Products slips despite reporting 59% rise in Q4 consolidated net profit.

The BSE Sensex is currently trading at 35327.04, up by 110.72 points or 0.31% after trading in a range of 35134.20 and 35404.83. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.57%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were IT up by 0.77%, Consumer Durables up by 0.76%, TECK up by 0.66%, Telecom up by 0.54% and Capital Goods up by 0.44%, while Power down by 0.59%, Utilities down by 0.52%, Healthcare down by 0.36%, PSU down by 0.33% and Basic Materials was down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 3.67%, Tata Motors up by 3.15%, TCS up by 1.50%, Asian Paints up by 1.35% and Tata Steel up by 1.32%. On the flip side, ICICI Bank down by 0.87%, Sun Pharma down by 0.78%, HDFC down by 0.70%, Bajaj Auto down by 0.62% and Maruti Suzuki down by 0.56% 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 10744.25, up by 26.45 points or 0.25% after trading in a range of 10689.85 and 10766.25. There were 27 stocks advancing against 22 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Tata Motors up by 3.27%, Titan Co up by 2.20%, Bharti Infratel up by 1.67%, UPL up by 1.46% and TCS up by 1.42%. On the flip side, Ultratech Cement down by 1.93%, BPCL down by 1.86%, Bajaj Finance down by 1.04%, Wipro down by 0.99% and Lupin down by 0.95% were the top losers.

Asian markets were trading mixed; Taiwan Weighted rose 11.97 points or 0.11% to 10,703.35, Jakarta Composite gained 133.22 points or 2.31% to 5,907.94 and Hang Seng was up by 133.33 points or 0.44% to 30,536.14.

On the flip side, Nikkei 225 decreased 99.81 points or 0.44% to 22,408.88, KOSPI Index shed 5.83 points or 0.24% to 2,443.98 and Shanghai Composite was down by 2.35 points or 0.07% to 3,159.15.

European markets were trading in green; France’s CAC rose 0.39 points or 0.01% to 5,522.32, Germany’s DAX increased 37.22 points or 0.29% to 12,949.43 and UK’s FTSE 100 was up by 46.12 points or 0.61% to 7,611.87.