Benchmarks trade with marginal gains in morning deals

Indian equity benchmarks have made a flat-to-positive start and are trading with marginal gains in early deals with traders getting some support with Finance Minister Piyush Goyal’s statement that India will be able to restrict the fiscal deficit below the budgeted level of 3.3 per cent of GDP in 2018-19, which has hit 55 per cent of the annual target in the first two months of the financial year. Traders also took some encouragement with Commerce Minister Suresh Prabhu’s statement that early data indicate that exports have registered a good performance in June despite volatility in global markets. However, gains remained capped with report that growth in output of the crucial eight core industries declined to a 10-month low of 3.6 per cent in May due to a fall in the pace of growth of steel, cement as well as contraction in crude and natural gas. This might have an adverse impact on the index of industrial production (IIP) as core industries have 40 per cent weightage in the index.

Global cues remained subdued with all the Asian markets trading in red at this point of time with greater China markets extending their declines as investor worries over Beijing’s trade relations with the U.S. soured sentiment in the region. The US markets ended higher on Monday following the release of a report from the Institute for Supply management showing growth in U.S. manufacturing activity unexpectedly accelerated in the month of June.

Back home, retail inflation for industrial workers remained flat at 3.96 per cent in May compared to 3.97 per cent in April this year. Meanwhile, India has agreed to provide tariff concessions on 3,142 products to the six member nations of the Asia Pacific Trade Agreement (APTA) effective from July 1. In scrip specific development, Tata Power strengthened with arm commissioning 100 MW solar capacity in AP and Dr. Reddy’s gained on launching Repatha in India.

The BSE Sensex is currently trading at 35325.29, up by 60.88 points or 0.17% after trading in a range of 35195.63 and 35351.72. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.06%, while Small cap index was down by 0.09%.

The top gaining sectoral indices on the BSE were Energy up by 0.85%, Oil & Gas up by 0.62%, IT up by 0.43%, TECK up by 0.36% and Auto was up by 0.29%, while Realty down by 0.69%, Metal down by 0.61%, Power down by 0.51%, Basic Materials down by 0.33% and Utilities was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.76%, Hero MotoCorp up by 1.53%, Bajaj Auto up by 1.11%, Reliance Industries up by 1.10% and Axis Bank up by 1.04%. On the flip side, Vedanta down by 3.02%, Power Grid Corporation down by 1.30%, ICICI Bank down by 0.83%, HDFC down by 0.70% and Wipro down by 0.38% were the top losers.

Meanwhile, ahead of June exports data release, the Commerce Minister Suresh Prabhu has said early data indicate that exports have registered a good performance in the month of June despite huge volatility in global markets. He further said that merchandise exports recorded 20.18% growth in May. He also stated that the government is also involving state governments in its plans to promote overseas shipments.

In order to boost exports, Prabhu said that they are working on a holistic, comprehensive strategy. Besides, in the last fiscal, the country’s total merchandise exports grew by about 10% to $303 billion. Higher growth in outbound shipments helps create employment opportunities, earn foreign exchange and boost economic activities.

Earlier, the minister said that the government has planned to spend $1 billion to boost export of services from the country as trade in services is growing faster than trade in goods. Further, talking on the Nikkei India Manufacturing Purchasing Managers Index (PMI), he said that many steps initiated by them to increase manufacturing at all levels. Manufacturing PMI improved to 53.1 in June from 51.2 in May, led by robust domestic and external demand.

The CNX Nifty is currently trading at 10678.75, up by 21.45 points or 0.20% after trading in a range of 10630.25 and 10680.10. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.57%, Hero MotoCorp up by 1.48%, Reliance Industries up by 1.42%, Bajaj Auto up by 1.25% and Bajaj Finserv up by 1.24%. On the flip side, Vedanta down by 3.31%, Bharti Infratel down by 1.99%, Grasim Industries down by 1.30%, Power Grid Corporation down by 1.27% and Cipla down by 1.04% were the top losers.

All the Asian markets are trading in red; Nikkei 225 declined 161.07 points or 0.74% to 21,650.86, Straits Times fell 16.23 points or 0.50% to 3,222.71, Hang Seng dropped 789.19 points or 2.80% to 28,165.92, Taiwan Weighted slipped 18.34 points or 0.17% to 10,759.60, KOSPI dropped 15.92 points or 0.71% to 2,255.62 and Jakarta Composite was down by 79.91 points or 1.41% to 5,666.86.