Barometer gauges escalate to trade near intra-day highs

Indian bourses escalated in the early noon session, with Sensex and Nifty trading near intra-day highs due to sharp buying in Consumer Durables, Industrials and Basic Materials stocks. Hefty buying in blue-chip stocks such as Tata Motors, Tata Steel and ONGC were lifting the markets higher. Sentiments were up-beat on report that Foreign Institutional Investors (FIIs) bought shares worth Rs 314.83 crore on August 7, 2018, as per provisional data from the stock exchanges. Besides, broader indices were delivering good performance and the market breadth on BSE was in the favour of advances. Traders’ confidence also got some boost with International Monetary Fund (IMF) stating India is a source of growth for the global economy for the next few decades and it could be what China was for the world economy. Meanwhile, IMF also said that Reserve Bank of India will need to gradually tighten monetary policy further due to rising inflation, driven mainly driven by higher oil prices and a falling rupee.

On the global front, Asian markets were trading mixed. Back home, Power sector was trading lower despite report that the number of power plants facing coal shortages has reduced in the last four months as state-owned CIL and the railways worked jointly to augment the supplies. Meanwhile, a private report stated that Public sector banks' non-performing assets declined by Rs 1,28,229 crore in FY18 due to write-offs, including compromise settlement. This is about 60 per cent higher vis-a-vis the year ago period.

The BSE Sensex is currently trading at 37819.63, up by 153.83 points or 0.41% after trading in a range of 37641.40 and 37838.82. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.23%, while Small cap index up by 0.61%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.28%, Industrials up by 0.83%, Basic Materials up by 0.74%, Bankex up by 0.74% and Metal up by 0.72%, while IT down by 0.28%, TECK down by 0.26%, Power down by 0.12%, Telecom down by 0.11% and Healthcare down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.01%, Tata Motors - DVR up by 1.93%, ONGC up by 1.74%, Tata Steel up by 1.49% and Asian Paints up by 1.41%. On the flip side, Bharti Airtel down by 1.38%, Infosys down by 0.69%, Wipro down by 0.65%, Maruti Suzuki down by 0.64% and Bajaj Auto down by 0.46% were the top losers.

Meanwhile, the International Monetary Fund (IMF) has said that India is a source of growth for the global economy for the next few decades and it could be what China was for the world economy. It noted that the country now contributes, in purchasing power parity measures, 15% of the growth in the global economy, which is substantial. It added that spillovers from India are not that big because it is not a very open economy. The IMF views India as a ‘long run source of global growth’. Besides, the Fund suggested the country to take steps towards more structural reforms. It stated that steps to structural reforms have to continue and, in some ways, have to even take a step further up, and identified some key areas for continued reforms like labour reforms, improving the business climate and enhancing infrastructure.

The IMF said India has three decades before it hits the point where the working age population starts to decline. So that's a long time. This is India’s window of opportunity in Asia. It's somewhat only a few other Asian countries have this. It also said that the Indian economy is recovering from the two shocks that started from late 2016: demonetisation and then the kind of implementation issues related to the Goods and Services Tax (GST). Generally, India is benefiting from good macroeconomic policies; stability-oriented policies as well as some important reforms that have been done in recent years.

The IMF Executive Board in its report of annual consultations with India has forecasted the country’s growth to rise to 7.3% in FY2018/19 and 7.5% in FY2019/20, on strengthening investment and robust private consumption. Although there are short term issues, the IMF views that as a long-term major gain for India by implementing a national GST. It said in India it’s much more complex because the country has 29 states and union territories and it need agreement. It added that this was a great achievement.

The report stated that Insolvency and the bankruptcy code is the other big achievement. It said ‘We are seeing certain positive steps there and we hope that can continue’. The third big achievement is the inflation targeting framework that India now has in the Reserve Bank of India, formally adopted in 2016 but informally even earlier. It added that they have seen the benefits of that have lower inflation and inflation expectations. And then there are some of the key smaller steps like things to improve the business climate, steps to further liberalised FDI

The CNX Nifty is currently trading at 11430.90, up by 41.45 points or 0.36% after trading in a range of 11379.30 and 11435.90. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.09%, Tata Steel up by 1.60%, ONGC up by 1.55%, GAIL India up by 1.17% and Asian Paints up by 1.10%. On the flip side, Bharti Airtel down by 1.51%, HPCL down by 1.25%, HCL Tech. down by 0.91%, BPCL down by 0.89% and Wipro down by 0.79% were the top losers.

Asian markets were trading mixed; Straits Times decreased 26.89 points or 0.81% to 3,313.11, Hang Seng declined 8.69 points or 0.03% to 28,240.19, Shanghai Composite slipped 22.47 points or 0.82% to 2,756.90, Nikkei 225 was down 18.43 points or 0.08% to 22,644.31.

On the contrary, KOSPI increased 0.57 points or 0.02% to 2,300.73, Jakarta Composite increased 11.84 points or 0.19% to 6,103.09 and Taiwan Weighted increased 91.81 points or 0.83% to 11,075.25.