Benchmarks make gap-up opening; Sensex reclaims 36,600 mark

Supported by firm global cues, Indian equity benchmarks have made a gap-up opening and are trading in fine fettle in early deals with Sensex recapturing its crucial 36,600 mark. Sentiments remained up-beat with Confederation of Indian Industry’s (CII) president Rakesh Bharti Mittal’s statement that GDP growth at 7.5% plus was a very healthy and positive sign for Indian economy, noting that impact of sustained structural reforms is now being felt on the ground. Traders took some support with a private report that inflation based on wholesale prices, which touched a 4-year high in June, seems to have peaked for this financial year, and is expected to glide down to around 4.1% by March 2019. Though, traders pared some of their initial gains on report that India’s import bill of crude oil and petroleum products swelled 57% to $12.73 billion in June as compared to the same month last year.

Global cues remained supportive with most of the Asian counters trading in green terrain at this point of time after an upbeat assessment on the US economy from Federal Reserve Chairman Jerome Powell comforted investors wary of a blowout in protectionism. The US markets ended higher on Tuesday, as investors took Federal Reserve chairman Jerome Powell’s comments to suggest that the central bank is willing to slow down the pace of interest-rate increases if needed.

Back home, stocks related to PSU banking space edged higher with report that the finance ministry is likely to infuse about Rs 10,000 crore within a few days in some state-owned lenders including PNB, Corporation Bank and Central Bank of India, to help them meet regulatory capital requirement. Textile sector stocks surged with report that the government doubling import duty on over 50 textile products -- like jackets, suits and carpets -- to 20%, a move that is aimed at promoting domestic manufacturing.

The BSE Sensex is currently trading at 36610.55, up by 90.59 points or 0.25% after trading in a range of 36607.09 and 36747.87. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined by 0.26%, while Small cap index was up by 0.16%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.87%, IT up by 0.50%, Energy up by 0.42%, TECK up by 0.33% and Capital Goods was up by 0.32%, while Telecom down by 1.15%, Metal down by 0.62%, Basic Materials down by 0.30%, Power down by 0.17% and Realty was down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports up by 1.66%, ONGC up by 1.31%, Coal India up by 1.10%, Sun Pharma up by 1.03% and HDFC Bank was up by 0.89%. On the flip side, Bharti Airtel down by 1.39%, Vedanta down by 1.28%, Tata Steel down by 1.05%, Tata Motors down by 0.95% and Axis Bank was down by 0.81% were the top losers.

Meanwhile, expressing confidence over India’s economic growth, the Confederation of Indian Industry (CII) president Rakesh Bharti Mittal has said that Gross Domestic Product (GDP) growth at 7.5% plus in the last quarter was a very healthy and positive sign for Indian economy. He said the impact of sustained structural reforms is now being felt on the ground as a mammoth economy is turning around. He added that the trends and signals of the economy are on the recovery path. He also said that the CII is looking at 8% growth for next year.

Mittal said ‘If you look at IMF, World Bank and other multi-lateral agencies including CII’s own projection, we are looking at GDP growth of 7.3-7.7% in 2018-19. So, $2.6 trillion economy growing at that rate.. If we are going to grow at a healthy rate of 8-9% year-on-year in future years, then by 2030, we are looking at India becoming a 10 trillion economy’. He also said sectors like consumer non-durables, two-wheelers and tractors are witnessing strong rural consumption. He added that structural reforms are settling down including Goods and Services Tax (GST) regime.

CII president further said ‘We have suggested to the Finance Ministry to start now looking at rationalising the tariff lines as well as rationalise the rates, which are in five brackets. I personally feel and believe that in India we cannot have single GST rate, but probably 2-3 rates should be good enough’. He also said another recommendation which the industry body has made to the Centre is to bring four sectors which are left out--petroleum, power, alcohol and real estate-- under the GST regime.

The CNX Nifty is currently trading at 11039.40, up by 31.35 points or 0.28% after trading in a range of 11034.85 and 11076.20. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 2.46%, Ultratech Cement up by 1.84%, Zee Entertainment up by 1.81%, Adani Ports up by 1.80% and ONGC up by 1.50%. On the flip side, Lupin down by 2.47%, UPL down by 1.92%, Hindalco down by 1.59%, Bharti Airtel down by 1.49% and Tata Motors was down by 1.30% were the top losers.

Asian markets are trading in green; Taiwan Weighted gained 46.19 points or 0.43% to 10,825.18, Straits Times rose 11.12 points or 0.34% to 3,250.76, Jakarta Composite jumped 21.89 points or 0.37% to 5,883.40, KOSPI advanced 3.89 points or 0.17% to 2,301.81, Shanghai Composite surged 14.21 points or 0.51% to 2,812.34, Nikkei 225 added 154.40 points or 0.68% to 22,851.76 and Hang Seng was up by 87.11 points or 0.31% to 28,268.79.