Benchmarks trade in fine fettle in early deals

Indian equity benchmarks gained traction despite cautious start as traders opted to buy beaten down but fundamentally strong stocks after two days of continuous decline. However, traders continued to remain cautious with report stating that the International Monetary Fund (IMF) trimmed India’s growth projection by 0.1 percentage point to 7.3% for 2018-19 against the earlier estimate of 7.4%, owing to high oil prices and a tight monetary policy regime. IMF said that India’s growth rate is expected to rise to 7.3% in 2018 (2018-19) and 7.5% in 2019 (2019-20), the projection is 0.1 and 0.3 percentage point lower for 2018 and 2019, respectively. Traders also remained concern about the IHS Markit Business Outlook survey stating that the Indian business sentiment regarding future activity remained subdued in June amid intense competition, high fuel prices and strong cost pressures.

On the global front, Asian markets are exhibiting mixed trend at this point of time as investors assess whether corporate earnings can deliver on high expectations against a backdrop of trade tensions. The US markets ended mostly lower on Monday, as investors looked ahead to a busy week of corporate earnings results.

Back home, stocks related to auto components sector remained in focus with Crisil’s latest report that the growth prospects for the Indian auto components sector are bright over the next two-three years. It said that the ancillary industry will clock healthy growth steered by product changes (replacing metal with plastic or high-grade and lighter metals, increasing electronic content) and regulations (emission and safety norms).

The BSE Sensex is currently trading at 36373.44, up by 49.67 points or 0.14% after trading in a range of 36261.78 and 36470.76. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.75%, while Small cap index up by 0.33%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.70%, Energy up by 1.15%, PSU up by 0.93%, Basic Materials up by 0.81% and Metal was up by 0.78%, while FMCG down by 0.44% was the lone losing index on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.90%, ICICI Bank up by 1.87%, Tata Motors up by 1.71%, Vedanta up by 1.63% and Yes Bank up by 1.12%. On the flip side, Hindustan Unilever down by 2.79%, Kotak Mahindra Bank down by 1.02%, Indusind Bank down by 0.95%, HDFC down by 0.93% and NTPC down by 0.90% were the top losers.

Meanwhile, citing high oil prices and faster-than-anticipated monetary policy tightening due to higher expected inflation, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) update has trimmed India’s Gross Domestic Product (GDP) projection by 0.1 percentage point to 7.3% for 2018 as against 7.4% forecasted earlier. Earlier, it also projected that the economy to grow 7.8% by 2019, but now the projection stood at 7.5%, lower by 0.3 percentage points.

However, IMF said that growth will rise from the 6.7% in 2017 as the drag in the currency exchange initiative and the introduction of the Goods and Services Tax (GST) fades. It noted that India is still the fastest growing economy, well ahead of 6.6% and 6.4% growth for China.

As per the report, among emerging market and developing economies, growth prospects are also becoming more uneven, amid rising oil prices, higher yields in the United States, escalating trade tensions, and market pressures on the currencies of some economies with weaker fundamentals. Besides, forecast for global growth remains unchanged at 3.9% with oil producers gaining at the expense of consumers.

The CNX Nifty is currently trading at 10967.40, up by 30.55 points or 0.28% after trading in a range of 10925.60 and 10989.65. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were HPCL up by 4.07%, Indian Oil Corporation up by 2.92%, BPCL up by 2.21%, GAIL India up by 2.05% and ICICI Bank up by 1.83%. On the flip side, Hindustan Unilever down by 2.58%, Kotak Mahindra Bank down by 0.95%, Indusind Bank down by 0.91%, Eicher Motors down by 0.78% and NTPC down by 0.77% were the top losers.

Asian markets are trading mixed; Taiwan Weighted decreased 35.16 points or 0.33% to 10,782.29, Jakarta Composite declined 44.41 points or 0.76% to 5,860.75, Hang Seng tumbled 284.81 points or 1.01% to 28,254.85 and Shanghai Composite was down by 28.29 points or 1.02% to 2,785.75.

On the flip side, Nikkei 225 increased 210.92 points or 0.92% to 22,808.27, Straits Times increased 14.66 points or 0.45% to 3,247.45 and KOSPI was up by 1.52 points or 0.07% to 2,303.51.