Indian bourses trade marginally higher in afternoon deals

In an extremely choppy session, the local barometer gauges were trading marginally higher in afternoon session, as Capital Goods, Healthcare, FMCG and IT shares witnessed buying. Investors took support with the SBI’s latest research report ‘Ecowrap’ stating that the country’s GDP is expected to grow by 7.7 percent in the April-June quarter on the back of pick up in leading indicators like cement production, sale of vehicles and bank credit. Meanwhile, finance ministry said that the government will meet the fiscal deficit target for the current fiscal although there could be some slippages in the current account deficit (CAD) because of high crude oil prices. However, gains remained capped as anxiety remained among the local traders with NITI Aayog Vice-Chairman Rajiv Kumar’s statement that he was more concerned about the rising trade deficit than the falling rupee, and called for efforts to push exports. On the sectoral front, insurance sector remained in focus with the Insurance Regulatory Authority (IRA) releasing a draft of new regulations that are expected to tighten the grip on the insurance sector. The new rules will require insurance firm to establish an actuary and cash and carry policy for insurance buyers.

The BSE Sensex is currently trading at 38329.10, up by 43.35 points or 0.11% after trading in a range of 38227.36 and 38487.63. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.06%, while Small cap index was down by 0.17%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.18%, Healthcare up by 1.05%, FMCG up by 0.85%, IT up by 0.82% and TECK up by 0.67%, while Metal down by 1.53%, PSU down by 0.95%, Basic Materials down by 0.80%, Oil & Gas down by 0.78% and Bankex down by 0.76% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.41%, NTPC up by 1.52%, TCS up by 1.02%, Power Grid up by 0.93% and Maruti Suzuki up by 0.78%. On the flip side, Tata Motors down by 3.31%, Tata Motors - DVR down by 2.87%, Vedanta down by 2.19%, SBI down by 1.84% and Kotak Mahindra Bank down by 1.77% were the top losers.

Meanwhile, calling for efforts to push exports, Niti Aayog vice chairman Rajiv Kumar has said that India’s widening trade deficit, which touched a five-year high of over $18 billion in July, was a greater cause for concern than depreciating rupee. He also said that there is a constituency which benefits from strong rupee but it needs to be put on the back foot. He said ‘I don’t believe in strong rupee... Rupee should remain in its natural value, some countries depreciate their currency deliberately, this is wrong. It will be very difficult for India to try and push up the rupee’.

Arguing that large countries like USA, China and European Union do not give much significance to fiscal deficit, Kumar said economic policy making should not focus only on fiscal deficit number. He also pointed out that at a time when private investment is low, then the aggregate demand can be brought up by public spending. However, he noted that some revenue expenditure can be just be brought to zero. He said ‘I think it will be much better to try and push exports, as our share in world trade is low. Even our share in services sector in world trade is lower than China’s’.

Niti Aayog vice chairman also argued that under the current circumstances, tightening fiscal and monetary policy at the same time would be asking for trouble. He suggested that India should not boast of being a big economy while negotiating trade deals as the country’s per capita income is still low. Besides, he predicted that India will be in better position while negotiating trade deal when the country starts growing at 9-10%. He stressed on the need for the government and the private sector to work in consonance to bring exports at the centre of economic activity to take advantage of external demand conditions.

The CNX Nifty is currently trading at 11574.55, up by 3.65 points or 0.03% after trading in a range of 11546.70 and 11620.70. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 2.53%, Larsen & Toubro up by 2.38%, Lupin up by 2.03%, NTPC up by 1.77% and Tech Mahindra up by 1.71%. On the flip side, Tata Motors down by 3.26%, BPCL down by 3.02%, HPCL down by 2.85%, Indian Oil Corp. down by 2.76% and Hindalco down by 2.34% were the top losers.

Asian markets are trading mostly in green; Straits Times increased 48.67 points or 1.5% to 3,248.56, KOSPI rose 9.27 points or 0.41% to 2,282.60, Taiwan Weighted added 58.93 points or 0.54% to 10,863.13, Shanghai Composite surged 15.00 points or 0.55% to 2,729.61, Jakarta Composite was up by 12.79 points or 0.21% to 5,957.09 and Nikkei 225 increased 48.27 points or 0.22% to 22,410.82.

On the flip side, Hang Seng was down by 126.73 points or 0.46% to 27,800.85.