Markets trade higher as trends see BJP leading in Karnataka

Indian equity benchmarks gained traction despite a cautious start and are trading with a gain of over half a percent, recapturing their crucial 35,900 (Sensex) and 10,900 (Nifty) levels, as trends see that the ruling party BJP leading in Karnataka. A high-stakes battle for the Karnataka Assembly ended on Saturday evening, with over 35 million voting in an election crucial for the ruling Congress as well as the BJP and the JD-S. Investors ignored a private report stating that the Reserve Bank of India is expected to begin its rate hike cycle from December quarter, and may go for three rate hikes by 2019 taking the key policy rate to 6.75 per cent. Market participants shrugged off a report which stated that India’s Retail inflation, measured by the consumer price index (CPI) rose to 4.58% in April 2018 as compared to 4.28% in March 2018, while rural inflation increased to 4.67% and urban inflation surged to 4.42% in April 2018. However, CPI food inflation for April eased marginally to 2.80% versus 2.81% in last month.

On the global front, Asian markets are trading mostly in red as investors still focused on U.S.-China trade ties ahead of second round of negotiations expected this week. The US markets ended higher on Monday amid easing trade tensions ahead of a second round of trade talks between the U.S. and China this week.

Back home, NITI Aayog CEO Amitabh Kant said that India needs to grow at about 10 per cent annually for the next three decades to be able to meet the ever-rising demands of its growing population. In scrip specific developments, NALCO advanced on inking MoU with Government of India for FY 2018-19 and Bharti Airtel gained on concluding acquisition of Telenor India.

The BSE Sensex is currently trading at 35906.45, up by 349.74 points or 0.98% after trading in a range of 35498.83 and 35921.02. There were 29 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.56%, while Small cap index was up by 0.87%.

The top gaining sectoral indices on the BSE were Metal up by 1.68%, Power up by 1.53%, Utilities up by 1.46%, Capital Goods up by 1.36% and Bankex was up by 1.13%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Power Grid Corporation up by 2.77%, Tata Steel up by 2.72%, HDFC Bank up by 1.52%, Larsen & Toubro up by 1.41% and Hindustan Unilever up by 1.40%. On the flip side, Tata Motors - DVR down by 2.70%, Tata Motors down by 1.43%, Infosys down by 0.18%, Bajaj Auto down by 0.13% and Dr. Reddys Lab down by 0.05% were the top losers.

Meanwhile, reversing the easing trend of last three months, India’s retail inflation inched up to 4.58% in the month of April 2018, as compared to 4.28% in March 2018 and 2.99% in April 2017. Inflation based on Consumer Price Index (CPI) firmed up due to faster rises in prices of food and fuel products. Besides, consumer food price inflation, a metric to gauge changes in monthly kitchen costs, remained almost flat at 2.80% in the first month of current fiscal from 2.81% in the previous month, while it surged from 0.61% in April 2017.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the CPI (Rural, Urban, Combined) on Base 2012=100 for April 2018, stood at 4.67%, 4.42% and 4.58% respectively, compared to 3.02%, 3.03% and 2.99% respectively in April 2017. The index value of CPI for combined stood at 137.1. The data also showed that Consumer Food Price Index (CFPI) for all India Rural and Urban for April 2018 stood at 3.56% and 1.29%, respectively, compared to 0.69 % and 0.46%, respectively in April 2017. The index value of CFPI for combined stood at 135.8 for the month of April.

According to the data, inflation of food and beverages eased to 3.00% in April 2018 from 3.08% in March 2018. Within the food items, the inflation fell for vegetables to 7.29%, sugar and confectionery (-) 4.05%, milk and products 3.21% and egg 6.26%. However, the inflation jumped for fruits 9.65%, cereals and products to 2.56%, pulses and products (-) 12.35%, spices 1.25%, prepared meals, snacks, sweets etc 4.85%, oils and fats 2.11% and meat and fish 3.59% in April 2018. Besides, the inflation for housing rose to 8.50% in April 2018. The inflation for clothing and footwear was higher at 5.11%, while the CPI inflation of fuel and light eased to 5.24% in April 2018.

The CNX Nifty is currently trading at 10902.65, up by 96.05 points or 0.89% after trading in a range of 10789.80 and 10904.10. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.79%, Power Grid Corporation up by 2.65%, Titan Company up by 1.97%, HDFC Bank up by 1.94% and Axis Bank up by 1.83%. On the flip side, Tata Motors down by 1.27%, HPCL down by 1.06%, Bharti Infratel down by 0.76%, Cipla down by 0.62% and Indian Oil Corporation down by 0.62% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 284.76 points or 0.9% to 31,256.32, Jakarta Composite declined 84.55 points or 1.42% to 5,862.60, Taiwan Weighted shed 48 points or 0.44% to 10,904.39, Nikkei 225 slipped 16.29 points or 0.07% to 22,849.57, KOSPI Index decreased 15.45 points or 0.62% to 2,460.66 and Shanghai Composite was down by 6.87 points or 0.22% to 3,167.16. On the flip side, FTSE Bursa Malaysia KLCI was up by 5.32 points or 0.29% to 1,855.74.