Markets trade in fine fettle in early deals

Indian equity benchmarks made an optimistic start and are trading in fine fettle in early deals as traders took some encouragement with Economic Affairs Secretary Subhash Chandra Garg’s statement that it is a plausible aspiration for India to become a $10 trillion economy by 2030. He also said that current account deficit (CAD) at 2.5% of GDP won't be a worry as the government has the required instruments to deal with any imbalance created due to foreign fund outflow. Traders reacted positively to the global rating agency, Moody’s latest report that non-financial corporates in the country may show modest improvement in their leverage levels in the current financial year, supported by higher revenue and earnings growth.

On the global front, Asian markets are trading mostly in green at this point of time, as traders opted to buy beaten down but fundamentally strong stocks. Earlier, Asian markets were trading mixed in early deals, as traders anticipated the next development in US-China trade tensions after a ratcheting up of rhetoric sparked a global sell-off on Tuesday. The US markets ended sharply lower on Tuesday on fears that the United States and China may be veering toward an all-out trade war.

Back home, state-run banks stocks remained in focus on meeting the credit demands of 4,500 good borrowers besides micro, small and medium enterprises (MSMEs) as the government looks to these lenders to help revive growth. However, the aviation related stocks edged lower despite the Directorate General of Civil Aviation’s (DGCA) data indicating that domestic air passenger traffic grew 16.53% to 11.86 million in May this year over the same period a year ago. It added that 12 domestic airlines together flew 11.85 million passengers as compared to 10.17 million passengers in May 2017.

The BSE Sensex is currently trading at 35376.21, up by 89.47 points or 0.25% after trading in a range of 35329.51 and 35431.67. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.05%, while Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.62%, Realty up by 0.57%, Bankex up by 0.34%, Metal up by 0.33% and Consumer Disc up by 0.17%, while Oil & Gas down by 0.63%, PSU down by 0.44%, Capital Goods down by 0.26%, Industrials down by 0.18% and Energy down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 1.54%, Axis Bank up by 1.40%, Hindustan Unilever up by 0.88%, Mahindra & Mahindra up by 0.84% and HDFC up by 0.80%. On the flip side, Adani Ports down by 0.99%, ONGC down by 0.97%, Coal India down by 0.97%, Sun Pharma down by 0.65% and Wipro down by 0.63% were the top losers.

Meanwhile, expressing confidence over India’s growth, Economic Affairs Secretary Subhash Chandra Garg has said that it is a plausible aspiration for India and the country has also potential to become a $10 trillion economy by 2030. He added that this target is likely to be achieved with the help of a sustained average growth of 8% coupled with an assumed devaluation of Indian rupee vis-a-vis US dollar at Re one per year.

Garg further on the fiscal management has said that the fiscal situation will not be allowed to deteriorate even though this is an election year. Besides, he also said that India would shortly achieve the targeted 3% fiscal deficit level and that it will be more permanent and sustainable in nature. On the country’s macroeconomic indicators, he said that tax to gross domestic product (GDP) ratio has improved from 10% to 11.6%, and fresh private capital investment is likely as capacity utilisation has increased.

Talking about the banking sector, the Minister said that great level of financialisation of economy has happened since demonetisation where mutual funds have become a major non-banking investor. He projected that the economy will rebalance from bank based to financial markets based lending. He added that GST has changed the way corporates interact with the tax infrastructure. Expressing satisfaction over job creation in the economy, he pointed out that more needs to be done in infrastructure and manufacturing sector.

The CNX Nifty is currently trading at 10731.50, up by 21.05 points or 0.20% after trading in a range of 10725.95 and 10756.75. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.84%, Zee Entertainment up by 1.42%, Axis Bank up by 1.30%, Vedanta up by 1.27% and Bajaj Finance up by 1.24%. On the flip side, UPL down by 1.87%, Indian Oil Corporation down by 1.63%, GAIL India down by 1.25%, Dr. Reddys Lab down by 1.11% and HPCL down by 1.05% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 108.19 points or 0.48% to 22,386.67, Straits Times gained 10.07 points or 0.30% to 3,311.42, Hang Seng jumped 120.25 points or 0.41% to 29,588.40, Taiwan Weighted advanced 15.53 points or 0.14% to 10,919.72 and KOSPI up by 26.19 points or 1.11% to 2,366.30.

On the flip side, Shanghai Composite declined 17.16 points or 0.59% to 2,890.66 and Jakarta Composite down by 150.85 points or 2.58% to 5,842.78.