Markets trade slightly in green in early deals

Indian equity benchmarks made a positive start and are trading slightly in green in early deals on Friday amid firm global cues. Sentiments remained up-beat on Fitch’s report stating that India’s economic growth will accelerate to 7.3 per cent in the current fiscal and 7.5 per cent in the next as money supply has recovered to its pre-demonetisation level and disruptions related to the rollout of GST have diminished. Some support also came from a report which highlighted that the Finance Ministry has cleared FDI proposal last month which will bring total foreign investment worth Rs 3,250 crore. However, gains remained capped on report that Industrial output grew by 4.4 per cent in March, the slowest in five months, due to a fall in capital goods production and deceleration in mining activity. Industrial growth measured by the Index of Industrial Production (IIP) in 2017-18 too decelerated to 4.3 per cent from 4.6 per cent in the previous fiscal.

On the global front, Asian markets are trading mostly in green at this point of time on signs the United States and China were toning down their trade war rhetoric, while Malaysian Ringgit hit a four-month trough in the first onshore trade since a shock election result last week. The US markets ended mostly higher on Friday benefited from the upward momentum seen in the two previous sessions, but gains remained capped as buying interest waned as traders seemed wary of continuing to pick up stocks

Back home, continuing downward trend, the country’s foreign exchange reserves fell by $1.426 billion to $418.940 billion in the week to May 4, due to decrease in foreign currency assets. In the previous week, the reserves had fallen by $3.216 billion to $420.366 billion. In scrip specific developments, Godrej Agrovet surged on hiking stake in GTFL to 49.90%, JBM Auto gained on entering into agreement to form JVC and Ahluwalia Contracts jumped on bagging orders worth Rs 389.81 crore.

The BSE Sensex is currently trading at 35614.22, up by 78.43 points or 0.22% after trading in a range of 35506.34 and 35620.66. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index slipped 0.01%, while Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.22%, Oil & Gas up by 0.51%, Utilities up by 0.39%, Power up by 0.38% and Realty up by 0.37%, while Consumer Durables down by 1.04%, IT down by 0.29%, Telecom down by 0.22% and TECK down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 2.50%, Sun Pharma up by 2.46%, NTPC up by 1.70%, Bajaj Auto up by 1.12% and Kotak Mahindra Bank up by 0.90%. On the flip side, Tata Motors - DVR down by 1.13%, ICICI Bank down by 1.11%, Coal India down by 1.11%, Adani Ports down by 0.63% and Bharti Airtel down by 0.61% were the top losers.

Meanwhile, global rating agency Fitch has said that India’s economic growth is likely to accelerate to 7.3 percent in FY19 and 7.5 percent in FY20 on the back of recovery in money supply to its pre-demonetisation level. Moreover, disruptions related to the rollout of GST have also eased and will support in the growth of Indian economy. The rating agency has said the country’s ratings “balance a strong medium-term growth outlook and favourable external balances against a weak fiscal position and difficult business environment”. However, the business environment is likely to improve gradually on the back of implementation of the government’s structural-reform agenda.

The Indian economy continued making recovery in the last quarter of 2017, growing 7.2 percent. The influence of one-off, policy-related factors, which had been a drag on growth, has now diminished. The money supply recovered to its pre-demonetisation level in mid-2017 and is now growing progressively alike to the previous trend.

The government plans to adopt a ceiling of 40 percent of GDP for central government debt, as recommended by the Fiscal Responsibility and Budget Management Review Committee in January 2017, compared with an estimated 50 percent of GDP for FY18. This would be a positive step towards a more prudent fiscal framework, even if debt is unlikely to fall below the ceiling by FY23, as recommended by the committee.

The Indian government’s last full budget before general elections has left much of the task of addressing the country’s relatively weak public finances to the next government. The budget deficit target for FY19 is set at 3.3 percent of GDP, down from an expected 3.5 percent in FY18, implying fiscal slippage of 0.3 percent of GDP in both FY18 and FY19 relative to last year’s budget targets.

The CNX Nifty is currently trading at 10829.55, up by 23.05 points or 0.21% after trading in a range of 10801.50 and 10831.05. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Lupin up by 2.70%, Dr. Reddys Lab up by 2.54%, Sun Pharma up by 2.32%, NTPC up by 1.55% and Bajaj Auto up by 1.09%. On the flip side, Titan Company down by 1.73%, Coal India down by 1.40%, ICICI Bank down by 0.98%, Bharti Airtel down by 0.92% and Adani Ports down by 0.90% were the top losers.

Asian markets are trading mostly in green; FTSE Bursa Malaysia KLCI gained 7.4 points or 0.4% to 1,853.91, Shanghai Composite increased 17.53 points or 0.55% to 3,180.80, Nikkei 225 rose 87.52 points or 0.38% to 22,846.00, Taiwan Weighted surged 102.97 points or 0.95% to 10,961.95 and Hang Seng up by 399.76 points or 1.28% to 31,521.82.

On the flip side, Jakarta Composite decreased 54.38 points or 0.91% to 5,902.45 and KOSPI Index down by 4.59 points or 0.19% to 2,473.12.