Bourses off day’s low

Key Indian benchmarks trimmed some of their losses in late afternoon session to come off their intraday low points. The markets took solace with global credit rating agency Fitch Ratings raising India’s gross domestic product (GDP) growth forecast to 7.4 per cent for FY19 as against a growth estimation of 7.3 per cent earlier. The rating agency has also projected a GDP growth of 7.5 per cent for FY20. Some relief also came with Commerce and industry minister Suresh Prabhu's statement that India’s purchases of commercial aircraft and gas from the US would help bridge the trade deficit between the two countries even as they agreed to hold official talks soon to address trade and economic irritants between them. However, weak macro-economic data along with heavy selling in IT, TECK and PSU stocks kept the key indices in the red terrain. Wholesale price inflation climbed to 4.43 percent in May 2018 from 3.18 percent in April 2018 and 2.26 percent during the corresponding month of the previous year, while India’s Current account deficit (CAD), has jumped over three times to $48.7 billion, or 1.9% of the country’s GDP, in the last financial year (FY18) from $14.4 billion or 0.6% in the previous year on account of higher trade deficit ($41.6 billion) brought about by a larger increase in merchandise imports relative to exports. Sentiments remained pessimistic with State Bank of India’s (SBI) latest report stating that India has only a decade to get into the developed country tag.

On the global front, European markets were trading in red, after the US Federal Reserve lifted short-term interest rate a quarter percentage point and forecast two additional rate hikes this year, citing a strengthening economy. Asian markets were also trading in red. Back home, in scrip specific development, Alembic Pharmaceuticals was trading higher after the company received an approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for Doxycycline Hyclate Capsules USP, 50 mg and 100 mg.

The BSE Sensex is currently trading at 35637.35, down by 101.81 points or 0.28% after trading in a range of 35488.55 and 35749.88. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.22%, while Small cap index was down by 0.01%.

The lone gaining sectoral index on the BSE was Healthcare up by 1.33%, while IT down by 1.41%, TECK down by 1.31%, PSU down by 1.22%, Consumer Durables down by 0.84% and Oil & Gas down by 0.78% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.14%, Yes Bank up by 1.13%, Indusind Bank up by 0.84%, Dr. Reddy’s Lab up by 0.69% and Kotak Mahindra Bank up by 0.59%. On the flip side, Infosys down by 3.02%, ICICI Bank down by 2.01%, SBI down by 1.79%, Adani Ports & SEZ down by 1.52% and Tata Motors - DVR down by 1.38% were the top losers.

Meanwhile, the global credit rating agency Fitch Ratings has raised India’s gross domestic product (GDP) growth forecast to 7.4 per cent for FY19 as against a growth estimation of 7.3 per cent earlier. The rating agency has also projected a GDP growth of 7.5 per cent for FY20. However, it mentioned that there are concern regarding higher finance costs and rising oil prices. The rating agency has protected global oil price to stay around $70 per barrel in 2018, up from $54.9 a barrel last year. It is expecting oil price to ease at around $65 a barrel next year. Moreover, the rating agency has cited that the rupee has been among the worst performers vis-a-vis Asian currencies this year, although the depreciation was more muted than during the 2013 taper-tantrum episode.

The Indian economy grew at 6.7 per cent in 2017-18. In the fourth quarter (January-March) the GDP grew at 7.7 per cent. The global rating agency said that India has better macroeconomic fundamentals than in 2013 and very low foreign ownership rates in the domestic government bond market, but the current account deficit has been widening as a result of rising oil prices, reviving domestic demand and poor manufacturing export performance.

In addition, Fitch projected retail inflation to be five per cent by the end of 2018. It said inflation has picked up since mid-2017, despite food inflation being muted. The rise in the oil price and the INR depreciation should add to price pressure in the coming months, although it expects inflation to be contained within the upper band of the RBI's target range.

Further, Fitch retained the global growth forecast at 3.3 per cent in 2018 and 3.2 per cent for 2019, reflecting the disappointment over the distribution of growth, with shortfalls in a number of smaller economies. It said however that expansion will be on-track or slightly better in the world’s two largest economies the US and China. It also said the near-term global growth prospects remain robust despite rising trade tensions and political risks.

The CNX Nifty is currently trading at 10812.30, down by 44.40 points or 0.41% after trading in a range of 10773.55 and 10833.70. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Lupin up by 2.59%, Sun Pharma up by 2.16%, HCL Tech up by 1.43%, Yes Bank up by 1.11% and Indusind Bank up by 0.98%. On the flip side, Infosys down by 2.99%, Tech Mahindra down by 2.65%, Adani Ports & SEZ down by 2.10%, ICICI Bank down by 1.93% and Indiabulls Housing Finance down by 1.81% were the top losers.

All the Asian markets were trading in red; Hang Seng decreased 284.98 points or 0.93% to 30,440.17, Nikkei 225 decreased 227.77 points or 0.99% to 22,738.61, Taiwan Weighted decreased 159.23 points or 1.43% to 11,013.98, KOSPI Index decreased 45.35 points or 1.84% to 2,423.48, Shanghai Composite decreased 5.64 points or 0.18% to 3,044.16 and FTSE Bursa Malaysia KLCI decreased 1.79 points or 0.1% to 1,761.78.

All the European Markets were trading in red; Germany’s DAX decreased 44.92 points or 0.35% to 12,845.66, UK’s FTSE 100 decreased 42.75 points or 0.55% to 7,660.96 and France’s CAC decreased 26.14 points or 0.48% to 5,426.59.