Sensex, Nifty add gains; Realty index leads

Indian equity benchmarks added gains in late morning session, with both Sensex and Nifty rising around 200 and 50 points, tracking firm Asian markets. In line with the larger peers, the broader markets were also trading firm. Further, Realty index gained the most among all the sectoral indices, followed by Energy and Metal, while Reliance Industries was leading the industry majors with the gains of more than 2%. Traders continued to take encouragement with Economic Affairs Secretary Subhash Chandra Garg’s statement 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. Some optimism also came with Niti Aayog CEO Amitabh Kant’s statement that the Centre has saved Rs 90,000 crore by digitally transferring money to beneficiaries of 440 government schemes. Adding some support, a private report stated that advancing gender parity could contribute $770 billion to India’s GDP by 2025. On the sectoral front, banking stocks were trading in green, supported by a report stating that the Centre decided to adopt a two-pronged approach to improve functioning of public sector banks (PSBs) by ‘ironing out issues of consortium-based lending’ and identifying ‘good borrowers.’

On the global front, Asian markets were trading in green, as investors sought bargains, a day after the spectre of a US-China trade war drove down bond yields, and share and commodity prices. Back home, in scrip specific development, Capital First gained on entering into a Share Subscription Agreement and Shareholders Agreement on June 18, 2018 (hereinafter referred to as ‘Investment Agreement’), with Digikredit Finance (Digikredit) along with Promoter of Digikredit, to acquire 402,455 Equity Shares of Rs 10 each comprising around 14.24% of the Share Capital of Digikredit.

The BSE Sensex is currently trading at 35467.02, up by 180.28 points or 0.51% after trading in a range of 35329.51 and 35480.74. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.24%, while Small cap index was up by 0.30%.

The top gaining sectoral indices on the BSE were Realty up by 1.07%, Energy up by 0.84%, Metal up by 0.79%, Bankex up by 0.73% and Telecom up by 0.63%; while Capital Goods down by 0.40%, PSU down by 0.33%, Oil & Gas down by 0.31%, Industrials down by 0.18% and FMCG down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.14%, Vedanta up by 2.01%, Axis Bank up by 1.40%, Yes Bank up by 1.38% and Bharti Airtel up by 1.12%. On the flip side, Coal India down by 1.68%, Wipro down by 1.15%, Larsen & Toubro down by 0.84%, ITC down by 0.83% and ONGC down by 0.82% were the top losers.

Meanwhile, global rating agency, Moody’s Investors Service in its latest report has said that leverage levels for non-financial Indian companies will improve modestly in the financial year 2019, aided by higher revenue and earnings growth. It noted that revenue for such companies will rise 10 percent, while EBITDA will increase 8 percent in FY19. It added that these companies reported strong financial results for FY18, with revenue and EBITDA increasing 13 percent and 12 percent, respectively.

According to the report, strong demand and production efficiencies will help the companies preserve their profitability against the backdrop of increasing commodity prices and aggregate leverage for rated companies will fall modestly in FY19. It also said that the acquisitions and capital spending financed by debt will cause the debt levels of its rated companies to rise by 5 percent in fiscal 2019. However, it stated that leverage for the telecommunications sector will remain elevated on relentless competition, which will in turn hurt the companies’ profitability.

The rating agency further said that metals and mining companies are taking on more debt to fund capital spending and acquisitions, prompting a spike in leverage. It said that high commodity prices will benefit the metals and mining, and oil and gas sectors, but are negative for end-user industries such as the auto, chemicals and real-estate sectors unless they can pass on the cash burden on to the customers. Adding further, it said that tightening regulations and trade tariffs globally will strain export-oriented sectors such as IT services and auto, but the weakening rupee will somewhat mute this impact.

The CNX Nifty is currently trading at 10757.60, up by 47.15 points or 0.44% after trading in a range of 10724.05 and 10763.00. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.11%, Vedanta up by 1.94%, Zee Entertainment up by 1.57%, Cipla up by 1.56% and Hindalco up by 1.48%. On the flip side, Coal India down by 1.67%, UPL down by 1.57%, Indian Oil Corporation down by 1.45%, HPCL down by 1.23% and Dr. Reddy’s Lab down by 1.14% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 was up 276.95 points or 1.23% to 22,555.43, Straits Times gained 30.69 points or 0.92% to 3,332.04, Hang Seng jumped 321.71 points or 1.08% to 29,789.86, Taiwan Weighted advanced 23.25 points or 0.21% to 10,927.44, KOSPI up by 28.43 points or 1.20% to 2,368.54 and Shanghai Composite was up by 15.71 points or 0.54% to 2,923.53. On the flip side, Jakarta Composite lost 151.47 points or 2.59% to 5,842.16.