Indian bourses continue to trade in positive territory

Key benchmark indices continued to trade in positive territory in afternoon session, led by gains in index heavyweights such as ITC and HDFC. Sentiments remained positive with Employees’ Provident Fund Organisation’s (EPFO) payroll data showing that as many as 41.26 lakh new jobs were created in the eight months till April this year, with largest ever addition of 6.85 lakh in April alone. Some solace also came in with interim finance minister Piyush Goyal’s statement that the country is on a ‘safe wicket’ as far as the rupee is concerned and the currency will be stable in the long-term. However, further up move got restricted as anxiety remained among the local traders with the Reserve Bank of India’s (RBI) report that Indian companies’ investments into their overseas subsidiaries/joint ventures fell by 63% to $1.17 billion in May this year. On the sectoral front, shares of cement companies were trading higher as the goods and services tax (GST) Council will consider a proposal to reduce GST rates on more items used in construction to 18% from 28%.

On the global front, Asian markets are trading mostly in red, amid rising fears of a global trade war between the U.S. and other leading economies. The Trump administration's plans regarding investment restrictions have heightened risk aversion. Back home, the BSE Sensex is currently trading at 35549.68, up by 79.33 points or 0.22% after trading in a range of 35338.09 and 35577.56. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.08%, while Small cap index was down by 0.28%.

The top gaining sectoral indices on the BSE were FMCG up by 0.99%, Telecom up by 0.92%, TECK up by 0.57%, IT up by 0.42% and Basic Materials up by 0.41%, while Energy down by 0.58%, Healthcare down by 0.34%, Industrials down by 0.30%, Realty down by 0.24% and Metal down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.61%, Coal India up by 1.56%, ITC up by 1.20%, TCS up by 1.16% and HDFC up by 1.13%. On the flip side, Tata Motors down by 2.28%, Reliance Industries down by 1.55%, ICICI Bank down by 1.30%, Tata Motors - DVR down by 0.74% and Tata Steel down by 0.71% were the top losers.

Meanwhile, keeping in view the government’s policy for cooperative federalism, the finance ministry has simplified the process of granting additional borrowing limits to the states. It would process each proposal along with complete information independently as and when it is received in contrast to the earlier process of bunching all proposals into a single proposal.

As per recommendation of the 14th Finance Commission, the states have the access to additional borrowing limits subject to fulfilment of certain conditions. Fiscal deficit of all states is required be anchored to an annual limit of 3 percent of Gross State Domestic Product (GSDP). The states are eligible for flexibility of 0.25 percent over and above 3 percent for any given year for which the borrowing limits are to be fixed if their debt-GSDP ratio is less than or equal to 25 percent in the preceding year. 

States are further eligible for an additional borrowing limit of 0.25 percent of GSDP in a given year for which the borrowing limits are to be fixed if the interest payments are less than or equal to 10 percent of the revenue receipts in the preceding year. The flexibility in availing the additional limit under either of the two options or both is be available to a state only if there is no revenue deficit in the year in which borrowing limits are to be fixed and the immediately preceding year.

The CNX Nifty is currently trading at 10788.05, up by 25.60 points or 0.24% after trading in a range of 10732.55 and 10795.85. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.78%, Grasim Industries up by 1.87%, Hindalco up by 1.76%, Coal India up by 1.68% and Bharti Airtel up by 1.42%. On the flip side, Tata Motors down by 2.23%, Cipla down by 1.60%, Reliance Industries down by 1.59%, ICICI Bank down by 1.31% and Bajaj Finance down by 0.99% were the top losers.

Asian markets are trading mostly in red; Hang Seng dropped 84.85 points or 0.29% to 28,876.54, Taiwan Weighted slipped 44.29 points or 0.41% to 10,742.17, KOSPI decreased 6.96 points or 0.30% to 2,350.92 and Shanghai Composite was down by 28.01 points or 0.99% to 2,831.33.

On the flip side, Straits Times was up by 2.93 points or 0.09% to 3,263.77, Nikkei 225 added 3.85 points or 0.02% to 22,342.00 and Jakarta Composite increased by 13.27 points or 0.23% to 5,872.35.