Benchmarks trade slightly in green in early deals

Indian equity benchmarks have made a positive start and are trading slightly in green in early deals on Friday amid firm global cues. Traders are getting some support with External Affairs Ministry Spokesperson Raveesh Kumar’s statement that India was closely monitoring the situation arising out of Trump’s announcement to pull the US out of the Iran deal. India will take necessary measures to offset any adverse impact on its interests due to US President Donald Trump’s decision to dump the Iran nuclear deal. However, gains remained capped with a report highlighting that continuing fall in the rupee will push trade deficit up to a four-year high of $178.1 billion or 6.4 per cent of GDP this fiscal year. The estimate comes amid a depreciation in the rupee against the dollar, wherein it has shed over 5 per cent to breach the Rs 67-mark to the dollar.

Global cues remained supportive with most of the Asian markets trading in green at this point of time, as signs of thawing relationships in the Korean peninsula and expectations that expansionary monetary policies will likely be in place for some more time helped fuel demand for riskier assets. The US markets ended in green on Thursday following the release of a Labor Department report showing a slightly smaller than expected increase in consumer prices in the month of April.

Back home, Telecom stocks remained under pressure after Reliance Jio launched a new postpaid plan starting at Rs 199 per month that will redefine postpaid services in the country. In scrip specific developments, Sharon Bio-Medicine touched the roof on receiving consent to operate API plant at Raigad and Jubilant Life Sciences surged on issuing Commercial Papers worth Rs 80 crore.

The BSE Sensex is currently trading at 35295.58, up by 49.31 points or 0.14% after trading in a range of 35262.06 and 35389.40. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.13%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were IT up by 0.68%, Consumer Durables up by 0.51%, Oil & Gas up by 0.49%, Capital Goods up by 0.39% and FMCG was up by 0.37%, while Telecom down by 2.66%, Healthcare down by 0.85%, Utilities down by 0.16%, Auto down by 0.15% and Realty was down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 4.33%, Coal India up by 1.08%, Adani Ports up by 0.82%, Infosys up by 0.75% and Larsen & Toubro up by 0.70%. On the flip side, Bharti Airtel down by 4.69%, Sun Pharma down by 2.62%, Tata Motors - DVR down by 1.49%, Tata Motors down by 0.69% and SBI down by 0.46% were the top losers.

Meanwhile, the India Ratings and Research (Ind-Ra), a subsidiary of Fitch Ratings, has stated that India’s trade deficit will widen to a four-year high of $178.1 billion or 6.4% of Gross Domestic Product (GDP) in 2018-19 (FY19), due to rupee depreciation coupled with higher crude and gold imports. Besides, trade deficit had stood at $156.8 billion or 6% of GDP in FY18. The estimate comes amid depreciation in the rupee against the dollar, wherein it has shed over 5% to breach the Rs 67-mark to the dollar.

The rating agency has said that factors which are putting pressure on the rupee include escalation in commodity prices, particularly crude, coupled with expectation of the US Fed raising its rates further. It also said that due to sluggish growth in export markets and rising protectionism for the dip, contribution of trade as a percentage of GDP has slid to 40.6% in FY18 from a high of 55.8% in FY13.

Talking about exports, Ind-Ra said that the recent Reserve Bank of India (RBI) ban on letter of undertakings will not significantly hurt the overall export performance. It added that the ban will impact those export items where inputs or intermediates are imported, due to higher import financing cost and cited the example of the fraud-hit gems and jewellery sector exporters, as the ones who will be highly affected by the LoU/LC ban.

The CNX Nifty is currently trading at 10738.20, up by 21.65 points or 0.20% after trading in a range of 10724.45 and 10762.50. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 4.44%, HPCL up by 3.31%, Indian Oil Corporation up by 2.62%, BPCL up by 2.01% and UPL up by 1.19%. On the flip side, Bharti Airtel down by 4.66%, Sun Pharma down by 2.45%, Tata Motors down by 0.81%, Cipla down by 0.68% and Hindalco down by 0.50% were the top losers.

Asian markets were trading mostly in green; KOSPI Index gained 13.99 points or 0.57% to 2,478.15, Jakarta Composite surged 89.61 points or 1.52% to 5,997.55, Taiwan Weighted jumped 100.25 points or 0.93% to 10,860.46, Nikkei 225 added 202.58 points or 0.9% to 22,699.76 and Hang Seng was up by 389.29 points or 1.26% to 31,198.51.

On the flip side, Shanghai Composite was down by 3.75 points or 0.12% to 3,170.66.