Bourses pare gains but continue to trade in positive territory

Key benchmark indices pared some of their initial gains in afternoon deals but continued to trade in positive territory, led by Realty, Auto, Industrials and Capital Goods stocks. The indices remained positive with private report that a lower base in the previous year’s quarter and likely good show by select companies in sectors such as automobiles, capital goods, FMCG, IT, and metals should help the Nifty 50 companies report a double-digit growth in aggregate sales and profits for the June 2018 quarter. Some support also came in with a report that the government was working on a comprehensive strategy to boost exports amid ‘challenging times’. The total exports including services from India touched $500 billion last year, registering a growth of 13.5%. However, the markets pared some gains with report that the increase in minimum support prices (MSP) by the government is set to bump up the Reserve Bank of India’s already heightened inflation forecast and will likely lead to higher interest rates at the next monetary policy review on August 1 and possibly another before the year ends. On the sectoral front, textile sector remained in limelight after the Indian Textiles Accessories and Machinery Manufacturers (ITAMMA) has said India is poised to overtake China in the textile sector by capitalizing on factors such as cheaper labour and modernisation and Tamil Nadu will have a major role to play in it.

On the global front, Asian markets were trading mostly in green, as investors responded with calm to increased U.S. tariffs on Chinese imports that took effect midnight Washington time. Back home, the BSE Sensex is currently trading at 35683.68, up by 109.13 points or 0.31% after trading in a range of 35532.21 and 35799.46. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index was up by 0.38%.

The top gaining sectoral indices on the BSE were Realty up by 1.70%, Auto up by 1.42%, Industrials up by 1.31%, Capital Goods up by 1.13% and Energy up by 1.05%, while Consumer Durables down by 0.42%, Telecom down by 0.19%, Healthcare down by 0.12%, FMCG down by 0.10% and TECK down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 3.84%, Tata Motors up by 3.40%, Bajaj Auto up by 2.83%, Tata Motors - DVR up by 2.41% and Yes Bank up by 2.02%. On the flip side, ICICI Bank down by 1.07%, Infosys down by 0.96%, Wipro down by 0.68%, Sun Pharma down by 0.56% and Mahindra & Mahindra down by 0.52% were the top losers.

Meanwhile, as India aims to double exports from agricultural sector by the year 2022, Commerce Secretary Rita Teaotia has said that her ministry is working on an institutional mechanism for addressing market access barriers and to deal with sanitary and phyto sanitary issues, which certainly are the biggest barriers in global food trade. Besides, she said that they are trying to focus on high value products, the value added agricultural products, focusing on some perishable commodities that need to be stored and transported properly. She added that they are also looking at the indigenous, ethnic and some non-ethnic categories.

The Secretary further said that there is a need to look at the issue of disproportionate large subsidies to agriculture by developed countries and the product-specific concentration of subsidies that the measures of support permit under the WTO agreement on agriculture. She noted that under the global trade norms, a WTO member country's food subsidy bill should not breach the limit of 10 percent of the value of production based on the reference price of 1986-88. She said 'when we looked at the prices, the prices that are obtained by Indian consumers whether less or high, this also factors in the effect on global prices of distortionary policies of other countries, so global prices are a function of that as well.'

According to Teaotia, recent times have witnessed very perverse efforts to target minimal support extended to poorest farmers in developing countries and to make efforts to undermine the core principles of special and differential treatment for such countries, which is at the heart of multilateralism. She pointed out that these short-sighted efforts would further aggravate the kind of imbalances they have already seen in the agreement on agriculture and also undercut one of the key objectives of WTO which is to improve living standards of populations around the world.

The CNX Nifty is currently trading at 10777.80, up by 28.05 points or 0.26% after trading in a range of 10735.05 and 10815.95. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 3.72%, HPCL up by 3.65%, Tata Motors up by 3.44%, Bajaj Auto up by 2.97% and Yes Bank up by 2.08%. On the flip side, Tech Mahindra down by 1.96%, Zee Entertainment down by 1.75%, Bharti Infratel down by 1.29%, Titan Co down by 1.27% and ICICI Bank down by 1.05% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 increased 241.15 points or 1.11% to 21,788.14, Hang Seng rose 51.74 points or 0.18% to 28,233.83, KOSPI added 15.32 points or 0.67% to 2,272.87 and Shanghai Composite was up by 23.63 points or 0.86% to 2,757.51.

On the flip side, Taiwan Weighted decreased 3.24 points or 0.03% to 10,608.57, Straits Times shed 69.84 points or 2.19% to 3,186.87 and Jakarta Composite dipped 36.05 points or 0.63% to 5,703.28.