Bourses maintain upbeat mood in afternoon deals

Indian equity indices maintained their upbeat mood in afternoon session, as buying momentum in the equities persisted. Jubilation continued on Dalal Street on hopes of Narendra Modi Government winning the no-trust vote brought in by TDP and other Opposition parties. Some encouragement also came in 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. Moreover, gains in heavyweights, including Larsen & Toubro, Reliance Industries and ICICI Bank were keeping the benchmark indices up. Meanwhile, the proposed new industrial policy, to be released soon, would focus on areas such as promotion of digital ports and use of big data to boost India's exports and manufacturing sector. On the sectoral front, textile sector remained in limelight after the central government hinted at taking proactive decisions in favour of the man-made fabric (MMF) sector in order to resolve the issues and problems under the goods and service tax (GST) latest by July 21.

On the global front, Asian markets were trading mostly in green. However, gains were limited amid concerns about the European Union imposing retaliatory tariffs on US goods. Back home, the BSE Sensex is currently trading at 36549.48, up by 198.25 points or 0.55% after trading in a range of 36335.61 and 36553.09. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.63%, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were IT up by 1.79%, TECK up by 1.60%, Capital Goods up by 1.37%, Telecom up by 0.82% and Industrials up by 0.78%, while Metal down by 0.62%, Oil & Gas down by 0.51%, Basic Materials down by 0.30% and PSU down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.09%, Larsen & Toubro up by 2.25%, Reliance Industries up by 1.91%, ICICI Bank up by 1.63% and Sun Pharma up by 1.36%. On the flip side, Vedanta down by 2.42%, ONGC down by 2.20%, HDFC down by 0.86%, Power Grid down by 0.82% and Kotak Mahindra Bank down by 0.77% were the top losers.

Meanwhile, Commerce Secretary Rita Teaotia has said that there is a real possibility that India may lose the battle with the US on trade disputes relating to export subsidy at the World Trade Organisation (WTO), as the country’s income levels had crossed the threshold for exports to be subsidised. However, she said that India has been responding very strongly to the US allegations. She also assured that while direct subsidy to exports cannot be given, the government can legitimately support regulatory compliances required in other countries.

Teaotia has stated that benefits to services exports will remain untouched, and GST refunds to exporters will continue as well. She also said that support for input subsidy is also legitimate. However, she noted that incentive only for exports is not eligible and there must be a cost incurred and then compensation. Besides, she indicated that the government has already set up an expert group to look at WTO-compliant support to exports, and a draft set of schemes will be announced for discussion. She added that the existing export subsidy schemes were continuing, as the dispute was yet to be resolved.

In March 2018, the U.S. dragged India into the WTO’s dispute settlement mechanism over export subsidies, saying that these incentives were harming American companies. The US challenged India's export subsidy programmes such as Merchandise Exports from India Scheme in the WTO, asserting that these initiatives harm its companies by creating an uneven playing field. US said that thousands of Indian companies are receiving benefits totalling over $7 billion annually under various export promotion programmes.

The CNX Nifty is currently trading at 11015.20, up by 58.10 points or 0.53% after trading in a range of 10946.20 and 11017.95. There were 29 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 5.21%, Bajaj Finserv up by 4.92%, Infosys up by 3.04%, Larsen & Toubro up by 2.09% and Tech Mahindra up by 1.99%. On the flip side, HPCL down by 2.65%, ONGC down by 2.50%, Vedanta down by 2.40%, BPCL down by 2.32% and Indian Oil Corp. down by 2.23% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted increased 96.73 points or 0.88% to 10,932.11, Hang Seng rose 158.84 points or 0.56% to 28,169.70, KOSPI surged 6.90 points or 0.3% to 2,289.19, Shanghai Composite added 63.00 points or 2.22% to 2,835.55 and Straits Times was up by 18.29 points or 0.55% to 3,295.87.

On the flip side, Nikkei 225 decreased 66.80 points or 0.29% to 22,697.88 and Jakarta Composite was down by 26.74 points or 0.46% to 5,844.34.