Benchmarks trade in fine fettle in early deals

Indian equity benchmarks are trading in fine fettle in early deals with Sensex and Nifty inching towards their crucial levels of 36,500 and 11,000 respectively. Sentiments remained upbeat with industry body Ficci’s statement that despite short-term challenges, India’s economic growth story remains intact and the country’s GDP is expected to grow around 7.5% in the current financial year. Traders also took some encouragement with Asian Development Bank’s (ADB) new report stating that South Asia continues to be the fastest growing sub-region, led by India, whose economy is on track to meet fiscal year 2018 projected growth of 7.3% and further accelerating to 7.6% in 2019, as measures taken to strengthen the banking system and tax reform boost investment.

On the global front, Asian markets are trading mostly in red at this point of time, as caution prevailed amid concerns about the European Union imposing retaliatory tariffs on US goods, while US President Donald Trump’s criticism of Federal Reserve policy knocked the dollar. The US markets ended lower on Thursday, as a deal to toughen foreign-investment reviews stoked trade tensions and a round of lukewarm corporate-earnings reports weighed on sentiments.

Back home, traders shrugged off ICRA’s report that India’s current account deficit (CAD) is set to widen and the first quarter print may come in at $16-17 billion or 2.5% of Gross Domestic Product (GDP) and added that for the full year the gap may scale a six-year high of $67-72 billion. Investors also remained on sidelines ahead the Goods and Services Tax (GST) Council meeting to be held on July 21, where it will consider to cut tax rate on 30-40 items across multiple slabs.

The BSE Sensex is currently trading at 36476.73, up by 125.50 points or 0.35% after trading in a range of 36335.61 and 36494.70. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were IT up by 1.26%, TECK up by 1.09%, Capital Goods up by 0.80%, Energy up by 0.64% and Industrials was up by 0.50%, while Metal down by 0.57%, PSU down by 0.45%, Oil & Gas down by 0.35%, Basic Materials down by 0.30% and Power was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.22%, Infosys up by 2.08%, Adani Ports up by 1.94%, Reliance Industries up by 1.64% and Larsen & Toubro up by 1.17%. On the flip side, Vedanta down by 2.26%, HDFC down by 1.21%, ONGC down by 1.12%, Power Grid Corporation down by 0.90% and Asian Paints down by 0.89% were the top losers.

Meanwhile, expressing confidence over growth of Indian economy, the industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) has said that the country’s economic growth story remains intact with the Gross Domestic Product (GDP) expected to grow around 7.5% in the current financial year, despite short-term challenges. It also said that growth will improve further in the coming years.

FICCI said the short-term challenges are slowing down of the industrial output in May to 3.2% and the inching up of the retail inflation in June to 5%. It further said that these challenges are being pro-actively tackled by the government and the Reserve Bank of India (RBI) observing that these indicators should not be seen as hurting the signs of revival in the economy significantly. It added that the industrial output growth is expected to rebound in the next few months.

The industry body also said that the Goods and Services Tax (GST) will play the role of a catalyst in this. While the GST collection trends clearly indicate towards a positive sentiment in the economy, the national integrated indirect tax structure will also bring down inflation, going ahead. It said with the GST Council and the central government open to taking measures for rationalising the GST rate structure, bringing in the excluded items and simplifying the tax administration, GST is all set to boost the GDP growth further.

Along with this, FICCI said the reform measures like Insolvency and Bankruptcy Code (IBC) and Real Estate (Regulation and Development) Act, 2016, which have already started yielding good results, will help in strengthening the revival of animal spirits and take the GDP growth beyond 8%.

The CNX Nifty is currently trading at 10993.60, up by 36.50 points or 0.33% after trading in a range of 10946.20 and 10994.95. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 2.18%, Infosys up by 2.05%, Bajaj Finance up by 1.99%, Bajaj Finserv up by 1.96% and Tech Mahindra up by 1.85%. On the flip side, BPCL down by 2.94%, Vedanta down by 2.23%, HPCL down by 2.20%, Indian Oil Corporation down by 1.87% and UPL down by 1.36% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 155.89 points or 0.69% to 22,608.79, Jakarta Composite decreased 23.48 points or 0.4% to 5,847.60, Hang Seng shed 152.63 points or 0.55% to 27,858.23, KOSPI slipped 3.15 points or 0.14% to 2,279.14 and Shanghai Composite was down by 3.35 points or 0.12% to 2,769.20.

On the flip side, Taiwan Weighted increased 79.49 points or 0.73% to 10,914.87 and Straits Times was up by 14.04 points or 0.43% to 3,291.62.