Benchmarks trade in fine fettle in early deals

Indian equity benchmarks made an optimistic start and are trading in fine fettle in early deals amid firm global cues. Frontline gauges recaptured their crucial 35,400 (Sensex) and 10,750 (Nifty) levels, as traders took some encouragement with India Ratings’ report that the Indian economy is gradually coming out of the twin shock of demonetisation and GST which temporarily derailed growth. The ratings agency, however, cautioned on the possible widening of the current account deficit (CAD) due to rising oil prices which was creating pressure on the currency. Traders shrugged off Assocham’s statement that President Donald Trump’s announcement of the US pulling out from the Iran deal and his decision to re-impose sanctions on the key crude oil producer will exert pressure on fuel prices and affect the Indian economy on the downside.

Global cues remained supportive with Asian markets rallying at this point of time with energy shares leading the way as crude oil prices bolted higher. The US markets ended in green on Wednesday partly due to a sharp increase by the price of crude oil following President Donald Trump’s decision to withdraw from the Iran nuclear deal.

Back home, stocks related to insurance sectors remained buzzing on report that the government is considering allowing 100 per cent foreign direct investment (FDI) in insurance intermediaries with a view to give a boost to the sector and attracting more funds. In scrip specific developments, Welspun Enterprises gained on emerging as lowest bidder for Sattanathapuram to Nagapaftinam project and Cipla edged higher on entering into agreement with MannKind Corporation for Afrezza.

The BSE Sensex is currently trading at 35455.65, up by 136.30 points or 0.39% after trading in a range of 35353.96 and 35500.76. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index shed 0.17%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were Telecom up by 0.84%, TECK up by 0.70%, IT up by 0.62%, Capital Goods up by 0.50% and Bankex was up by 0.30%, while Power down by 0.10%, Consumer Durables down by 0.10%, Utilities down by 0.08% and Basic Materials was down by 0.05% were the few losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.21%, Mahindra & Mahindra up by 1.05%, ONGC up by 0.98%, ICICI Bank up by 0.94% and Larsen & Toubro up by 0.87%. On the flip side, Dr. Reddys Lab down by 0.91%, Power Grid Corporation down by 0.83%, Tata Motors down by 0.32%, Adani Ports down by 0.13% and Tata Steel down by 0.12% were the top losers.

Meanwhile, a day after President Donald Trump withdrew the US from the Iran nuclear deal and decided to re-impose sanctions on the key crude oil producer, the industry chamber Associated Chambers of Commerce and Industry of India (ASSOCHAM) has said that this move will exert pressure on fuel prices and affect the Indian economy on the downside.

ASSOCHAM Secretary General D S Rawat has said that while there are other imponderables like Saudi Arabia trying to increase crude output along with major OPEC producers and the US allies like France not being on board, the global economy does face bouts of uncertainty and volatility. He added that in the short term, it is not a good news for the Indian economy, which meets bulk of its crude oil requirements from imports.

Trump had said that he was withdrawing the US from what he called the ‘decaying and rotten’ Iran nuclear deal signed by the Obama regime in 2015, putting him on a collision course with America’s closest allies. Moments later he signed fresh set of sanctions against Iran and warned countries against any cooperation with Tehran on its controversial nuclear weapons programme. The nuclear deal was negotiated and agreed to by Iran and the P5+1 (the US, UK, France, China, Russia, and Germany), granting Iran sanctions relief and returning frozen assets in exchange for restrictions on its nuclear programme and international inspections.

The CNX Nifty is currently trading at 10768.10, up by 26.40 points or 0.25% after trading in a range of 10763.80 and 10785.55. There were 28 stocks advancing against 21 stocks declining on the index, while on stock remained unchanged.

The top gainers on Nifty were Tech Mahindra up by 2.02%, Bharti Airtel up by 1.94%, Zee Entertainment up by 1.77%, ONGC up by 1.34% and Lupin up by 1.06%. On the flip side, HPCL down by 1.26%, Cipla down by 1.13%, Power Grid Corporation down by 1.09%, Dr. Reddys Lab down by 1.08% and Grasim Industries down by 0.97% were the top losers.

All the Asian markets are trading in green; KOSPI Index gained 5.13 points or 0.21% to 2,449.11, Shanghai Composite increased 5.96 points or 0.19% to 3,165.11, Taiwan Weighted rose 46.32 points or 0.43% to 10,749.67, Nikkei 225 jumped 69.86 points or 0.31% to 22,478.74 and Hang Seng up by 269.74 points or 0.88% to 30,805.88.