Benchmarks trade in fine fettle in early deals

Indian equity benchmarks made a cautious start, but gained traction and are trading in fine fettle in early deals on Tuesday as traders took some encouragement with ICRA expecting GDP growth to improve to 7.4 per cent in January-March 2017-18 from 7.2 per cent in the third quarter, on account of good rabi crop harvest and improved corporate earnings. The Central Statistics Office (CSO) is scheduled to come out with GDP estimate for the fourth quarter (Q4) of fiscal 2017-18 and provisional annual estimates for the year 2017-18 on May 31. Some support also came with NITI Aayog’s vice-chairman Rajiv Kumar exuding confidence that Indian economy will achieve 9 per cent growth rate on sustained basis by 2022 on the back of reforms like GST, demonetisation and the Insolvency and Bankruptcy Code (IBC).

On the global front, Asian markets are trading mostly in red at this point of time amid holidays in Hong Kong and South Korea. The dollar hovered near four-month highs on renewed optimism about global growth while oil prices held steady after hitting their highest levels in three and a half years overnight on concerns over U.S. sanctions targeting Venezuela. The US markets ended higher on Monday amid optimism about a positive outcome from trade talks between the U.S. and China.

Back home, Gems and jewellery related stocks remained in focus on report that India's gems and jewellery exports have declined 22 per cent to $2.6 billion in April on account of demand slowdown in major markets including the UAE. In scrip specific developments, SAIL surged on delivering 10,500 tonne steel for Kishanganga Hydroelectric Power Project and PPAP Automotive catched speed on reporting 64% rise in Q4 net profit.

The BSE Sensex is currently trading at 34716.58, up by 100.45 points or 0.29% after trading in a range of 34550.22 and 34724.77. There were 18 stocks advancing against 12 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.40%, while Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.89%, Capital Goods up by 0.82%, Industrials up by 0.72%, Bankex up by 0.62% and Auto was up by 0.60%, while IT down by 0.44%, TECK down by 0.38%, Realty down by 0.10%, Telecom down by 0.07% and Basic Materials was down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.83%, Bajaj Auto up by 1.78%, Yes Bank up by 1.54%, Tata Motors up by 1.30% and ICICI Bank up by 1.26%. On the flip side, Adani Ports down by 0.83%, SBI down by 0.65%, Hero MotoCorp down by 0.63%, Sun Pharma down by 0.54% and Asian Paints down by 0.52% were the top losers.

Meanwhile, ahead of the Central Statistics Office’s (CSO’s) Gross Domestic Product (GDP) estimate for the fourth quarter of fiscal 2017-18, domestic rating agency, Indian Credit Rating Agency (ICRA) in its latest report has forecasted that India’s GDP growth is expected to improve to 7.4% in January-March quarter of 2017-18 (Q4FY18) from 7.2% in Q3FY18. It added that the growth will be supported by good rabi crop harvest and improved corporate earnings. It also said that this will exceed the implicit forecast of 7.1% embedded in the CSO's Second Advance Estimate of National Income for FY18.

As per the report, the growth of the Indian gross value added (GVA) at basic prices in year-on-year (Y-o-Y) terms is likely to record a considerable recovery to 7.3% in the fourth quarter of FY18 from 6.7% in the third quarter of FY18, thereby rebounding above 7% after a gap of five quarters. The report stated that this revival in Q4, relative to the previous three months, is expected to be broad-based, supported by an uptick in industry (to 7.7% from +6.8%), agriculture, forestry and fishing (to 4.5% from 4.1%), and services (to 7.8% from +7.7%).

ICRA said that the uptick in economic activity that set in during the second half of 2017 is expected to have strengthened in Q4 FY18, led by a healthy rabi harvest, robust volume growth in various sectors, an improvement in corporate earnings and a favourable base effect. It further said it expects a mild pickup in growth in the services sector, reflecting the improvement in diesel and petrol consumption, service sector exports, passengers carried by domestic airlines, cargo handled at major ports and railway revenue carrying freight.

The CNX Nifty is currently trading at 10555.00, up by 38.30 points or 0.36% after trading in a range of 10490.55 and 10556.80. There were 29 stocks advancing against 20 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Bajaj Finance up by 2.45%, Indiabulls Housing up by 2.18%, Bajaj Finserv up by 2.13%, Dr. Reddys Lab up by 1.86% and Bajaj Auto up by 1.84%. On the flip side, Ultratech Cement down by 2.50%, Bharti Infratel down by 1.55%, Tech Mahindra down by 1.22%, Grasim Industries down by 1.17% and Indian Oil Corporation down by 0.91% were the top losers.

Asian markets are trading mostly in red; Shanghai Composite decreased 12.73 points or 0.4% to 3,201.11, Nikkei 225 slipped 11.44 points or 0.05% to 22,990.93, FTSE Bursa Malaysia KLCI shed 3.15 points or 0.17% to 1,850.43 and Taiwan Weighted down by 2.13 points or 0.02% to 10,964.07. 

On the flip side, Jakarta Composite up by 73.42 points or 1.28% to 5,807.28.