Markets trade jubilantly in early deals; Sensex surpasses 36,100 mark

Indian equity benchmarks have made an optimistic start and are trading jubilantly in early deals with frontline gauges surpassing their crucial 10,900 (Nifty) and 36,100 (Sensex) levels, taking cues from their global peers. Sentiments remained up-beat with rating agency Crisil’s latest report stating that India Inc will deliver the highest quarterly revenue growth in three years at 12.8% in the April-June period, but high oil prices will narrow profit margins by 0.20%. Traders also took some encouragement with NITI Aayog vice-chairman Rajiv Kumar making a case for promoting Zero Budget Natural Farming (ZBNF) in states, saying it would help in doubling farmers’ income by 2022.

Global cues too provided support to the domestic markets with Asian markets trading in green in early trade on Tuesday, as recent trade-related concerns seemed to have faded for now. The US markets ended higher on Monday,  as investors set aside concern about escalating trade tensions and rising political tension abroad to focus on the coming earnings season.

Back home, banking sector stocks edged higher despite a private report that banking sector woes are expected to continue in the first quarter of the financial year with weak profits despite a pickup in retail-backed credit growth and easing of fresh bad loans. In scrip specific developments, Gayatri Projects surged on emerging as lowest bidder for two Expressway projects and SRF gained as its arm gets approval to setup BOPET film line & Resin plant in Thailand.

The BSE Sensex is currently trading at 36135.08, up by 200.36 points or 0.56% after trading in a range of 36019.63 and 36154.39. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.67%, while Small cap index was up by 0.83%.

The top gaining sectoral indices on the BSE were Realty up by 1.99%, Telecom up by 1.47%, Energy up by 1.16%, TECK up by 0.91% and IT was up by 0.91%, while Healthcare down by 0.38% was the lone losing index on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.74%, Adani Ports up by 1.68%, Yes Bank up by 1.66%, Bajaj Auto up by 1.36% and Bharti Airtel up by 1.22%. On the flip side, Sun Pharma down by 1.02%, Asian Paints down by 0.41%, Kotak Mahindra Bank down by 0.36%, Power Grid Corporation down by 0.35% and Vedanta down by 0.31% were the top losers.

Meanwhile, ahead of Q1 earnings, rating agency Crisil in its latest report has said that India Inc’s revenue in the first quarter of the current financial year is expected to grow at a 12-quarter high of 12.8%. It added that this would be the third consecutive quarter of double digit growth, but the jump in performance in the earlier two quarters could have been attributed to a low base on account of demonetisation and Goods and Service Tax (GST) implementation slump. The report is based on an analysis of 350 companies excluding those in the banking, finance, insurance and oil sectors, which comprise over 50% of the National Stock Exchange (NSE).

The report further said 15 of the 21 key sectors will report a double-digit growth for Q1FY19 and the pick-up in volumes is expected to have sustained in both consumption- and commodity-linked sectors. On the profitability front, it said the pre-tax margins will crimp by 0.20%, but the slide will be narrower than the 1-2.50% contraction seen in the past quarters.

On the sectoral front, volume growth will lead to automobiles, retail and airline services to log a revenue growth in excess of 15%. Among the commodity sectors, natural gas and cement are expected to post robust growth led by volumes, while petrochemicals and steel products would benefit from continued higher prices. It added that revenue of export linked sectors like information technology and pharma will be aided by the 4% rupee depreciation.

According to the report, automobiles, steel products and pharmaceuticals are expected to log improvement in operating margins, but the margins for airline services, cement, natural gas, sugar and telecom services will be impacted by higher commodity prices. Besides, the telecom sector, which has had a bad time since the launch of deep-pocketed Reliance Jio, is expected to continue showing signs of pricing pressures.

The CNX Nifty is currently trading at 10912.65, up by 59.75 points or 0.55% after trading in a range of 10876.65 and 10916.15. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.25%, HCL Tech up by 2.23%, UPL up by 2.04%, Adani Ports up by 1.78% and Reliance Industries up by 1.74%. On the flip side, HPCL down by 1.21%, Dr. Reddys Lab down by 0.96%, Sun Pharma down by 0.75%, Indian Oil Corporation down by 0.57% and Lupin down by 0.55% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 208.21 points or 0.94% to 22,260.39, Straits Times soared 43.65 points or 1.33% to 3,272.47, Hang Seng jumped 118.59 points or 0.41% to 28,807.09, Taiwan Weighted added 14.23 points or 0.13% to 10,734.51, KOSPI gained 11.11 points or 0.48% to 2,296.91 and Jakarta Composite was up by 53.98 points or 0.92% to 5,861.36. On the flip side, Shanghai Composite was down by 1.40 points or 0.05% to 2,813.71.