Benchmarks continue to trade in green

Domestic equity benchmarks continued to show positive trend in morning session, with gains of over half a percent, ending two consecutive days of losses, tracking sharp recovery in Asian markets. The markets took support from a private report stating that the second quarter of calendar year 2018 saw the biggest ever private equity (PE) investments in India. The PE firms have invested a record $8.2 billion during the quarter ended June 2018, an increase of 60% compared with $5.1 billion in the same period last year. Traders took encouragement from International Monetary Fund report which highlighted that to sustain the high growth rate India has achieved, the country should carry out banking sector reforms; continue with fiscal consolidation, simplify and streamline GST; and renew impetus on reforms. Traders also took note of a report that India has indicated that it may withdraw the notification imposing additional duties on 29 US products, to be effective from August 4, if both the sides are able to sort out the differences over tariffs. However, investors overlooked a report from World Bank that climate change could cost India 2.8% of GDP, and depress living standards of nearly half of its population by 2050, as average annual temperatures are expected to rise by 1-2% over three decades.

On the global front, Asian markets are trading in green, after China eased foreign investment limits. On Thursday, China released details of a long-anticipated easing on foreign investment curbs on sectors including banking, automobiles, heavy indUS try and agriculture, as it moved to open its domestic markets. Back home, telecom stocks were buzzing with a report that Telecom Commission, the highest decision-making body in the Department of Telecommunications (DoT), is expected to meet on June 29 and take up the National Digital Communications Policy (NDCP), which charts the road map for development of the telecom and digital space.

The BSE Sensex is currently trading at 35230.11, up by 192.47 points or 0.55% after trading in a range of 35099.65 and 35271.20. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index advanced 1.06%, while Small cap index was up by 1.11%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.96%, Metal up by 1.95%, Energy up by 1.83%, PSU up by 1.79% and Capital Goods was up by 1.65%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 2.37%, SBI up by 2.34%, Bajaj Auto up by 2.04%, Reliance Industries up by 1.96% and ONGC was up by 1.95%. On the flip side, Asian Paints down by 0.82%, Axis Bank down by 0.80%, Indusind Bank down by 0.79%, Mahindra & Mahindra down by 0.69% and HDFC Bank was down by 0.50% were the top losers.

Meanwhile, amid uncertainty on the possible impact on the expenditure if government decides to enhance the Minimum Support Price to farmers on some crops, Secretary of the Department of Expenditure under Finance Ministry Ajay Narayan Jha has said that the fiscal deficit, which is the difference between total revenue and expenditure, for the current financial year (FY19), will be maintained at 3.3% of the gross domestic product (GDP) and the fiscal consolidation of the country is as per the ‘commitment’.

Jha said ‘India’s fiscal consolidation path is absolutely as we are committed to. We were keeping fiscal deficit number at 3.3%, there is no slippage’. The government had budgeted to cut fiscal deficit to 3.3% of GDP in current financial year, from 3.53% of GDP in previous financial year. Fiscal deficit in the first month of the current financial year had touched 24.3% the budget estimates due to higher revenue and lower expenditure. During the month, the government had received Rs 71,450 crore (3.93% of corresponding budget estimates (BE) for FY19 for total receipts).

Besides, India’s fiscal deficit in the year ended March 2018 came in at 3.53% of GDP, in line with the revised estimates. India revised its fiscal deficit target in February to 3.5% of GDP from 3.2% of GDP for the financial year 2018. The shortfall for the last fiscal year was Rs 5.9 lakh crore ($87.53 billion). India got Rs 12.4 lakh crore in net tax receipts during the fiscal year.

The CNX Nifty is currently trading at 10643.75, up by 54.65 points or 0.52% after trading in a range of 10612.35 and 10665.20. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.39%, GAIL India up by 3.08%, Titan Company up by 2.38%, ONGC up by 2.25% and SBI was up by 2.22%. On the flip side, Tech Mahindra down by 3.54%, Dr Reddys Lab down by 1.66%, Indusind Bank down by 1.17%, Asian Paints down by 1.04% and Mahindra & Mahindra was down by 1.04% were the top losers.

Asian markets are trading in green; Nikkei 225 increased 22.05 points or 0.10% to 22,292.44, Straits Times gained 21.93 points or 0.67% to 3,279.50, Hang Seng surged 395.63 points or 1.37% to 28,892.95, Taiwan Weighted jumped 163.96 points or 1.52% to 10,818.24, KOSPI advanced 8.56 points or 0.37% to 2,322.80, Jakarta Composite added 53.56 points or 0.94% to 5,720.88 and Shanghai Composite was up by 41.05 points or 1.45% to 2,827.95.