Benchmarks continue to trade in positive territory

Mirroring strong global cues, Indian equity benchmarks continued their trade in positive territory in morning session, with gains of over three fourth of a percent. Traders remained optimistic as Oil Minister Dharmendra Pradhan vowed to not allow petrol and diesel prices go out of reach of the common man, saying the government is working on a holistic solution to price volatility without going back on reforms. The markets also took support from the RBI Governor Urjit Patel’s statement that there are no implications on non-performing assets (NPAs) of banks because of farm loan waivers provided by various states. Investors also took encouragement from World Bank’s report that it has forecast a growth rate of 7.3% for India this year and 7.5% for the next two years, making it the fastest growing country among major emerging economies. However, traders shrugged off a report stating that Foreign Direct Investment (FDI) to India declined to $40 billion in 2017 from $44 billion in the previous year. FDI inflows to South Asia contracted by 4% to $52 billion, owing to a drop in inflows to India.

On the global front, Asian market were trading in green, following a rally on Wall Street as remarks by a European Central Bank board member eased worries about the new Italian government's spending plans. The traders overlooked ICRA Ratings’ report which stated that China has turned away from the feed-in tariff regime and restricted new capacity addition of distributed generation solar projects to 10 GW in 2018. It has also removed the target-based system for utility scale solar projects. While these may lower costs for Indian developers, higher imports would put added pressure on domestic module and cell manufacturers. Back home, in scrip specific development, EID Parry strengthened on reporting 0.51 LMT sugar and 66 LL Alcohol sales in May 2018.

The BSE Sensex is currently trading at 35464.29, up by 285.41 points or 0.81% after trading in a range of 35278.38 and 35473.90. There were 28 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 1.13%, while Small cap index was up by 1.68%.

The top gaining sectoral indices on the BSE were Realty up by 1.97%, Basic Materials up by 1.75%, Metal up by 1.69%, Industrials up by 1.31% and Capital Goods was up by 1.23%, while there were no losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.36%, Tata Steel up by 1.91%, ICICI Bank up by 1.73%, Adani Ports & SEZ up by 1.42% and ONGC was up by 1.20%. On the flip side, Power Grid down by 0.57%, Coal India down by 0.46% and SBI was down by 0.11% were the top losers.

Meanwhile, the World Bank in its latest report has forecast that India will retain its world’s fastest-growing major economy tag. It has forecast a growth rate of 7.3 per cent for current financial year (FY19) and 7.5 per cent for the next two years, reflecting robust private consumption and strengthening investment. It also said that India’s economy is robust, resilient and has potential to deliver sustained growth. However, it expected the global growth rate to go down to 3 per cent in 2019 and 2.9 per cent in 2020.

The report further highlighted that India’s growth potential is about 7 per cent, and it is currently growing at a pace above its potential, attributing it to the major economic reforms and fiscal measures undertaken by the government. Besides, it pointed out that India’s GDP growth bottomed out in the middle of 2017 after slowing for five consecutive quarters, and has since improved significantly, with momentum carrying over into 2018 on the back of a recovery in investment.

The World Bank added that in India there has been a further deterioration in trade and current account balances on account of accelerating import grown amid strengthening domestic demand and higher energy prices. The global economic picture painted by the bank is not as rosy as it is for India. India has overcome the temporary disruptions caused by the implementation of the Goods and Services Tax (GST) by mid-2017 and manufacturing output and industrial production have continued to firm.

The CNX Nifty is currently trading at 10774.25, up by 89.60 points or 0.84% after trading in a range of 10722.60 and 10774.30. There were 41 stocks advancing against 8 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Vedanta up by 2.62%, Hindalco up by 2.38%, Axis Bank up by 2.29%, Tata Steel up by 2.00% and ICICI Bank was up by 1.88%. On the flip side, Tech Mahindra down by 0.83%, Titan Company down by 0.79%, IOC down by 0.51%, Power Grid down by 0.47% and Coal India was down by 0.41% were the top losers.

Asian market were trading in green, Shanghai Composite surged 1.84 points or 0.06% to 3,117.02, Taiwan Weighted soared 11.16 points or 0.1% to 11,212.99, FTSE Bursa Malaysia KLCI advanced 18.7 points or 1.05% to 1,795.83, KOSPI Index strengthened 19.17 points or 0.78% to 2,472.93, Jakarta Composite rose 27.67 points or 0.46% to 6,097.38, Hang Seng gained 173.27 points or 0.55% to 31,432.37 and Nikkei 225 was up by 180.22 points or 0.8% to 22,805.95.