Benchmarks trade slightly in green in morning deals

Indian equity benchmarks made a cautious start and are trading slightly in green in early deals, as traders took some solace with report that India will explore opportunities to increase exports of petroleum products, cars and motorcycles, and mobile phones to Kenya during the joint trade committee meeting of the two countries. Traders also took note of the Commerce Ministry’s statement that a National Logistics Portal is being developed to ensure ease of trading in the international and domestic markets, as India eyes lowering logistics cost from 14% of GDP to less than 10% by 2022. However, gains remained capped, as investors stayed cautious after rupee opened below the crucial $70-mark again and amid other global developments. Traders remained concerned about a report that the government has imposed standard conditions for as many as 25 sectors like steel, coal and oil, seeking environment clearance (EC) for expansion of existing projects or new projects.

Global cues too remained sluggish, with most of the Asian counters trading in red at this point of time after US-China trade talks ended without progress, with the markets braced for a speech by Federal Reserve Chairman Jerome Powell for hints on the direction of US monetary policy. The US markets ended lower on Thursday as an ongoing trade war between the US and China and worries of renewed legal issues for President Donald Trump dampened investors’ sentiments.

Back home, some concern persist with a private report that the Goods and Services Tax (GST) collections may come in as a surprise for the government as collections for the month of July are likely to be lower on both year-on year basis and a month-on-month basis. Sugar stocks remained in sweet spot with the food ministry extending the deadline for exporting 2 million tonne of sugar by three months to December as only a fourth of it has been shipped so far.

The BSE Sensex is currently trading at 38367.34, up by 30.58 points or 0.08% after trading in a range of 38276.59 and 38429.50. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.20%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were Power up by 0.66%, Utilities up by 0.51%, Metal up by 0.47%, PSU up by 0.44% and Basic Materials up by 0.40%, while FMCG down by 0.43%, IT down by 0.17%, TECK down by 0.07% and Oil & Gas down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.44%, Axis Bank up by 1.42%, Power Grid Corporation up by 1.32%, NTPC up by 1.00% and SBI up by 0.83%. On the flip side, ICICI Bank down by 0.99%, Indusind Bank down by 0.71%, Sun Pharma down by 0.45%, Infosys down by 0.44% and Yes Bank down by 0.40% were the top losers.

Meanwhile, Moody’s Investors Service in its Global Macro Outlook for 2018-19 has forecasted that India’s gross domestic product (GDP) growth is likely to be around at 7.5% in 2018 and 2019 as it is largely resilient to external pressures like those from higher oil prices. It said the run-up in energy prices over the last few months will raise headline inflation temporarily but the growth story remains intact as it is supported by strong urban and rural demand and improved industrial activity.

The report stated that robust activity is shown in the industrial sector, a normal monsoon together with the increase in the minimum support prices for Kharif crops should support rural demand. Thus, despite external headwinds from higher oil prices and tightening financing conditions, growth prospects for the remainder of the year remain in line with the economy’s potential.

Moody’s said the Reserve Bank of India (RBI) in July raised the benchmark repo rate by 25 basis points for the second time in two months to 6.5 per cent. It added that two concerns behind the tightening cycle are rising core inflation and vulnerability to tightening external financial conditions. The impact on food inflation from increased procurement prices to farmers will be mitigated somewhat by the expected rise in farm output because of a good harvest. Moody’s expect the RBI to continue on a steady tightening path into 2019.

For G-20 economies, the rating agency projected growth at 3.3% in 2018 and 3.1% in 2019. It said the advanced economies will grow 2.3% in 2018 and 2% in 2019, while G-20 emerging markets will remain the growth drivers at 5.1% in both 2018 and 2019. It also said growth prospects for many of the G-20 economies remain solid, but there are indications that the synchronous acceleration of growth heading into 2018 is now giving way to diverging trends.

The CNX Nifty is currently trading at 11596.90, up by 14.15 points or 0.12% after trading in a range of 11558.65 and 11604.60. There were 25 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were UPL up by 3.18%, Grasim Industries up by 1.67%, Power Grid Corporation up by 1.66%, Coal India up by 1.47% and Axis Bank up by 1.45%. On the flip side, Cipla down by 1.31%, ICICI Bank down by 0.95%, Indiabulls Housing down by 0.90%, Titan Company down by 0.82% and Bharti Airtel down by 0.82% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted decreased 56.75 points or 0.53% to 10,806.38, Straits Times declined 20.15 points or 0.62% to 3,229.74, Jakarta Composite shed 16.83 points or 0.28% to 5,966.16, Hang Seng dropped 191.00 points or 0.69% to 27,599.46 and Shanghai Composite was down by 9.64 points or 0.36% to 2,714.98. On the flip side, Nikkei 225 increased 151.18 points or 0.67% to 22,562.00 and KOSPI was up by 0.02 points to 2,282.62.