Benchmarks continue to trade in green

Mirroring Asian counterparts, Indian equity benchmarks continued to show a positive trend in morning session, with gains of over half a percent each. Traders remained optimistic with a private report stating that India’s economy may have expanded by 7.1-7.5% in the January-March quarter - driven by manufacturing and construction - compared with 7.2% in the third quarter. The report came ahead of the release of official data later this week. Some support also came with a report from Industry chamber CII stating that businesses across several key sectors are seeing firm growth in sales and orders, indicating that the economy is on a recovery path and investments will pick up. Traders took encouragement from Union Minister Suresh Prabhu’s statement that the commerce and industry ministry will work on several areas, including formulation of a comprehensive action plan to boost exports and give special thrust on industrial corridors in the last one year of the NDA government. Besides, the finance ministry is planning to set up a fund under the National Investment and Infrastructure Fund (NIIF) dedicated for strategic investments. Traders overlooked a private report stating that India’s Coal import in April 2018 stood at 17.32 MT, about 9% lower than 19.08 MT recorded for April 2017, the report also highlighted the import demand from thermal power plants remained low due to ample supply from domestic sources.

On the global front, Asian markets were trading mostly in green, following positive weekend news regarding US and North Korea relations. Investors also digested the extended slide in oil prices after top producers indicated output could increase.  Back home, in scrip specific development, National Aluminium Company is trading in green with report that it is preparing a game-changing business model that will bring an additional Rs 935 crore net profit to the company. The model provides for focusing operation of Utkal-D coal block, commissioning of 1 million tonne alumina refinery, setting up of Wire Rod Mill 3, bringing into stream Caustic Soda Plant and others.

The BSE Sensex is currently trading at 35133.85, up by 208.98 points or 0.60% after trading in a range of 35006.50 and 35152.86. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 0.98%, while Small cap index was up by 1.16%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.31%, Oil & Gas up by 1.93%, PSU up by 1.75%, Capital Goods up by 1.41% and Realty was up by 1.24%, while IT down by 1.52%, TECK down by 1.19% and Consumer Durables was down by 0.35% were the few losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 7.81%, Coal India up by 2.19%, Maruti Suzuki up by 1.74%, Asian Paints up by 1.73% and NTPC was up by 1.45%. On the flip side, TCS down by 1.64%, Infosys down by 1.03%, Wipro down by 0.55%, ONGC down by 0.54% and Indusind Bank was down by 0.44% were the top losers.

Meanwhile, terming the Modi government’s performance as ‘miraculous’, NITI Aayog vice chairman Rajiv Kumar has said that all the macroeconomic parameters including growth, inflation and fiscal deficit have significantly improved in the last four years. He noted that the government has done well on all fronts considering that India plunged into a state of policy paralysis and was on a standstill mode during the final years of the UPA regime. He pointed out that with that kind of legacy, it is quite miraculous that the country has come to where it is at this moment in terms of macroeconomics.

Kumar further stated that Indian economy was on decline in 2014, non-performing assets (NPAs) of banks had increased already. Besides, he said that inflation is down now, foreign exchange reserves are high, fiscal deficit is in control and growth has accelerated. However, he admitted that some areas to concern still remain. For example, he said that NPAs of banks are still high, the current account deficit (CAD) has not improved much, but it is still better than 2014.

Apart from this, NITI Aayog vice chairman has pointed out that “Oil prices, which had given us comfort, have increased, which means that we will have to look at macroeconomics all over again to make sure that we can sustain and maintain growth rate, which I think we will be able to do”. Besides, he emphasised on the need to look at corporate governance in the banking sector to improve investment flows. He also expressed the hope that headline inflation won’t go up and core inflation will remain subdued.

The CNX Nifty is currently trading at 10679.45, up by 74.30 points or 0.70% after trading in a range of 10640.55 and 10682.90. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 8.07%, HPCL up by 5.35%, BPCL up by 5.29%, Indian Oil Corporation up by 4.83% and Lupin was up by 3.13%. On the flip side, Tech Mahindra down by 4.95%, TCS down by 1.84%, HCL Tech down by 1.81%, Hindalco down by 1.26% and Infosys was down by 0.94% were the top losers.

Asian markets were trading mostly in green, Shanghai Composite surged 5.55 points or 0.18% to 3,146.85, Nikkei 225 gained 6.56 points or 0.03% to 22,457.35, KOSPI Index soared 16.65 points or 0.68% to 2,477.45, Taiwan Weighted advanced 44.16 points or 0.4% to 10,986.46, Jakarta Composite strengthened 76.05 points or 1.27% to 6,051.79 and Hang Seng was up by 170.45 points or 0.56% to 30,758.49.

On the other side, FTSE Bursa Malaysia KLCI was down by 11.33 points or 0.63% to 1,786.07.