Bulls tighten grip on Dalal Street; Markets at record highs

Bulls tighten their grip on Dalal Street and frontline gauges hit record highs in early deals, surpassing their crucial 38,200 (Sensex) and 11,500 (Nifty) for the first time ever. Sentiments remained up-beat with former chief economic advisor Arvind Virmani’s statement that India’s economic growth seems to be back on a recovery path and the country will be on a firm 7.5% plus growth track this fiscal. He also said the US-China tariff war provides an opportunity to increase India’s exports to the US. Traders also took some encouragement with the Central Board of Direct Taxes’ (CBDT) statement that income Tax collection in the country stood at a record Rs 10.03 lakh crore during 2017-18. It also said during 2017-18, a record number of 6.92 crore I-T returns were filed, which was 1.31 crore more than 5.61 crore returns filed in 2016-17.

Global cues too remained supportive with most of the Asian markets trading in green at this point of time following a higher finish on Wall Street last Friday as investors awaited developments on proposed Sino-US trade talks, while keeping a wary eye on the Chinese yuan and Turkish lira. The US markets ended higher on Friday, as optimism that the US and China will eventually resolve their trade standoff offset fears about Turkey’s currency crisis.

Back home, aviation related stocks flied higher with the Airports Council International in its latest study released this month showed that India led the Asia Pacific region in posting the highest growth in air passenger traffic in May at 13.3%. Insurance sector stocks remain in focus with report that public sector general insurance firms are losing market share because of delayed merger plans and appointments.

The BSE Sensex is currently trading at 38210.11, up by 262.23 points or 0.69% after trading in a range of 38050.69 and 38216.89. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.79%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.91%, Industrials up by 1.84%, Oil & Gas up by 1.20%, Energy up by 1.19% and PSU was up by 1.18%, while IT down by 0.98% and TECK was down by 0.85% were the only losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 4.71%, ONGC up by 3.31%, Yes Bank up by 2.48%, Coal India up by 2.45% and Tata Motors up by 2.20%. On the flip side, Infosys down by 2.38%, Bharti Airtel down by 0.69%, ITC down by 0.49%, TCS down by 0.17% and Axis Bank down by 0.07% were the top losers.

Meanwhile, expressing optimism on the growth of India, former chief economic advisor Arvind Virmani has said that the country’s economic growth seems to be back on a recovery path and India will be on a firm 7.5 percent plus growth track this fiscal. He also said the US-China tariff war provides an opportunity to increase the country’s exports to the US.

Virmani stated that economic growth, which has been subject to many ups and downs over the past seven years, seems to be back on a recovery path. He elaborated that domestically, the main risk to macro stability is politically driven government consumption spending at the cost of investment and fiscal prudence. If this temptation is resisted, the country will be back on a firm 7.5 percent plus growth track this year (fiscal). However, he noted that the rise in oil prices due to geopolitical factors like sanctions on Iran by the US is a concern.

Talking about the US-China tariff war, former chief economic advisor said it will have some short term disruptive effects on the global economy. He projected that the country will become a great economic power by 2035. He said that historically every government pushes up what are referred to as populist expenditure in the year leading up to the election and added that the test is if they keep it modest and don’t disturb the trend in fiscal responsibility. Therefore, he said there is always a risk of fiscal slippage.

The CNX Nifty is currently trading at 11539.70, up by 68.95 points or 0.60% after trading in a range of 11499.65 and 11540.55. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 4.79%, ONGC up by 3.34%, Yes Bank up by 2.37%, Coal India up by 2.29% and Tata Motors up by 2.09%. On the flip side, Infosys down by 1.74%, Titan Company down by 1.24%, Tech Mahindra down by 1.02%, GAIL India down by 0.81% and Grasim Industries down by 0.75% were the top losers.

Asian markets are trading mostly in green; Straits Times increased 7.59 points or 0.24% to 3,217.03, Jakarta Composite soared 93.12 points or 1.58% to 5,876.92, Hang Seng surged 244.25 points or 0.89% to 27,457.66, KOSPI added 0.08 points to 2,247.13 and Shanghai Composite was up by 2.96 points or 0.11% to 2,671.93.

On the flip side, Nikkei 225 decreased 64.05 points or 0.29% to 22,206.33 and Taiwan Weighted was down by 1.22 points or 0.01% to 10,689.74.