Local equities continue to trade with traction

Local equity benchmarks continued their trade with traction in the morning section, as Nifty trading above 11,500 mark for the first time, while Sensex is up around 270 points. Besides, the Indian rupee recovered sharply from its all-time low to trade at 69.83 to the dollar, up 33 paise in morning on fresh selling of the greenback by exporters. Sentiments remained upbeat with a report that India’s economic growth seems to be back on a recovery path and the country will be on a firm 7.5 per cent plus growth track this fiscal. US-China tariff war provides an opportunity to increase India’s exports to the US. Traders took encouragement from a report that Indian economy clocked over 10% growth in two years of the UPA government, before and after the global financial meltdown of 2008. Indian economy clocked 10.23% and 10.78% growth in 2007-08 and 2010-11 respectively. Traders shrugged off a report that India’s current account deficit (CAD) will widen to 2.5% of the GDP in the current fiscal due to higher oil prices that has been accentuated by rupee depreciation.

On the global front, Asian markets were trading in mostly in green, as investors awaited developments on proposed China-US trade talks and the Chinese yuan rallied away from dangerous lows. As per a report, China and the US will hold lower-level trade talks in August, offering hope that they might resolve an escalating tariff war. Back on domestic turf, in scrip specific development, Vedanta strengthens on getting approvals for expansion of Odisha refinery. Besides, Jubilant Life Sciences surges on earmarking Rs 550 crore for capital expenditure in FY19.

The BSE Sensex is currently trading at 38226.86, up by 278.98 points or 0.74% after trading in a range of 38050.69 and 38266.95. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.71%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Capital Goods up by 3.55%, Industrials up by 2.17%, Energy up by 1.72%, Metal up by 1.07% and Oil & Gas was up by 1.00%, while IT down by 0.86%, TECK down by 0.74%, Utilities down by 0.13% and Consumer Durables was down by 0.07% were the few losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 5.94%, Tata Motors up by 2.88%, ONGC up by 2.67%, Tata Motors - DVR up by 2.21% and Yes Bank was up by 2.14%. On the flip side, Infosys down by 2.11%, Bharti Airtel down by 0.63%, ITC down by 0.61%, Power Grid down by 0.40% and Axis Bank was down by 0.31% were the top losers.

Meanwhile, international agency Moody’s has said that India’s current account deficit (CAD) is likely to widen to 2.5% of the GDP in the current fiscal (FY19) as compared to 1.5% of GDP in last financial year (FY18) on account of the higher oil prices that has been accentuated by rupee depreciation. The current account is the net difference between inflows and outflows of foreign currencies. The rupee recently slid to a record low of 70.32 to a U.S. dollar as political turmoil in Turkey and concerns about China’s economic health continued to support safe-haven assets and weighed on emerging market currencies.

Moody’s underlined while the weaker rupee will benefit exports at the margins, it is unlikely to reverse the trade deficit, which hit a five-year high of $18.02 billion in July. Net oil imports accounted for 2.6% of GDP in FY18 and will increase further in fiscal 2019.

Besides, Moody’s Investor Services had cut India’s growth forecast to 7.3% for calendar year 2018. However, it has maintained the estimate for 2019 at 7.5%. The agency stated “The Indian economy is in cyclical recovery led by both investment and consumption. However, higher oil prices and tighter financial conditions will weigh on the pace of acceleration. We expect GDP growth of about 7.3 per cent in 2018, down from our previous forecast of 7.5%. Our growth expectation for 2019 remains unchanged at 7.5%”.

The CNX Nifty is currently trading at 11537.35, up by 66.60 points or 0.58% after trading in a range of 11499.65 and 11545.30. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 5.70%, ONGC up by 3.16%, Tata Motors up by 2.65%, Yes Bank up by 2.17% and Coal India was up by 2.13%. On the flip side, GAIL India down by 2.61%, Infosys down by 2.07%, Titan Co down by 1.59%, Eicher Motors down by 1.21% and UPL was down by 1.02% were the top losers.

Asian markets were trading in mostly in green; Straits Times rose 7.65 points or 0.24% to 3,217.09, Hang Seng strengthened 192.03 points or 0.7% to 27,405.44, Shanghai Composite gained 2.96 points or 0.11% to 2,671.93, Jakarta Composite surged 99.17 points or 1.69% to 5,882.97 and KOSPI was up by 1.85 points or 0.08% to 2,248.90.

On the other side; Taiwan Weighted decreased 19.05 points or 0.18% to 10,671.91 and Nikkei 225 was down by 47.34 points or 0.21% to 22,223.04.