Firm trade persists on Dalal Street

Key barometer gauges continued their firm trade in early afternoon session, on the back of strong gains in Oil & Gas, Utilities and IT stocks. The sentiments remained positive with Care Ratings expecting that India’s GDP to grow by 7.5% in 2018-19. This growth will be contingent upon favourable monsoon, pick up in investment and increased private sector spending supported by continued government spending. The markets also drew some solace with Union Oil Minister Dharmendra Pradhan’s statement that the Centre is deliberating on an ‘immediate solution’ to deal with rising fuel prices. The broader indices too were trading in line with larger counterparts with gains in the range of 0.60-1%. In the currency front, the rupee emerged strong in early trade, and was trading at 68.25 against US Dollar, higher by 9 paise. In scrip specific development, GAIL India surged by around 4% on reporting around 4-fold jump in its net profit at Rs 1020.92 crore for the quarter ended March 31, 2018 as compared to Rs 260.16 crore for the same quarter in the previous year.

On the global front, Asian markets were exhibiting mixed trend, amid cautious trades after US President Donald Trump cancelled the planned historic summit with North Korean leader Kim Jong Un and accused North Korea of displaying 'tremendous anger and open hostility'. Lingering worries about trade wars also weighed on investor sentiment. Back home, the BSE Sensex is currently trading at 34829.61, up by 166.50 points or 0.48% after trading in a range of 34700.52 and 34869.60. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.98%, while Small cap index was up by 0.65%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.67%, Utilities up by 1.52%, IT up by 1.14%, Metal up by 1.13% and TECK up by 1.08%, while FMCG down by 0.10% and Healthcare down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.67%, ONGC up by 2.30%, Yes Bank up by 2.27%, Infosys up by 1.79% and Hero MotoCorp up by 1.66%. On the flip side, SBI down by 1.82%, ITC down by 1.36%, Coal India down by 0.96%, Asian Paints down by 0.48% and HDFC down by 0.27% were the top losers.

Meanwhile, credit rating agency, Care Ratings in its latest report titled ‘Indian Economy Prognosis: 2018-19’ has forecasted that India’s gross domestic product (GDP) growth will accelerate to 7.5% in 2018-19, from 6.6% in the last fiscal. It added that the growth will be dependent on favorable monsoon, pick up in investment and increased private sector spending supported by continued government spending. However, it pointed out that some areas of concerns are headline inflation, lending rates, fiscal prudence, current account deficit (CAD) and exchange rates.

The rating agency estimated that CAD will widen up to 2.5% of GDP for FY19, from the 1.7% for the first nine months of FY18, due to wider trade deficit, an estimated slowdown in the portfolio flows and increased oil prices. It also expects that farm sector growth to inch up to 4%, from the 3% in the year-ago period, and industrial output growth to go up to 6%, from 4.3% in the previous year. Besides, it noticed that meeting the wider 3.3% target on the fiscal deficit will be difficult and adherence will depend on achievement of the Rs 80,000 crore divestment target, goods and services tax (GST) collections and tax receipts. 

On the inflation front, the report said that the consumer price inflation will go up to 5.5% for the fiscal, from the 3.6% in FY18, which may result in rate hikes of up to 0.50% by the inflation-focused Reserve Bank of India during the year. For the banking sector, it said that it will have an ‘upward bias’ with credit growth estimated to increase to 12% and deposits to expand by 10% and added that non-performing assets (NPAs) will be a major challenge for lenders.

Care Ratings has said that the estimates in the report have been made assuming that crude oil does not spiral over the present $80 per barrel and settles down at up to $75. It also said that the exchange rate will slip further to the 67-68 levels against the US dollar by the end of FY19 and added that the reserves will grow marginally to $435 billion, from $425 billion at present.

The CNX Nifty is currently trading at 10568.00, up by 54.15 points or 0.52% after trading in a range of 10524.00 and 10578.30. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.93%, GAIL India up by 3.18%, Tata Steel up by 2.88%, Bajaj Finserv up by 2.78% and Yes Bank up by 2.41%. On the flip side, Vedanta down by 2.37%, SBI down by 1.82%, Bharti Infratel down by 1.66%, ITC down by 1.29% and Coal India down by 1.00% were the top losers.

Asian markets were exhibiting mixed trend; Taiwan Weighted increased 5.37 points or 0.05% to 10,942.30, Nikkei 225 rose 13.78 points or 0.06% to 22,450.79, FTSE Bursa Malaysia KLCI surged 19.26 points or 1.08% to 1,794.92 and Jakarta Composite was up by 35.02 points or 0.59% to 5,981.55.

On the flip side, Hang Seng decreased 156.14 points or 0.51% to 30,604.27, Shanghai Composite shed 17.44 points or 0.55% to 3,137.21 and KOSPI Index was down by 5.21 points or 0.21% to 2,460.80.