Local bourses hold gains in afternoon deals

Indian equity benchmarks held their gains in afternoon session, on positive global leads and sustained buying by domestic institutional investors. The indices remained in green with taking support from Economic policy think-tank, the National Council of Applied Economic Research (NCAER) in its latest report retaining India’s growth forecast for the current fiscal at 7.4%, citing comfortable agricultural sector outlook and a marked improvement in the external sector. The sentiments were also supported by Department of Industrial Policy and Promotion’s (DIPP) latest data showing that foreign direct investment (FDI) in India grew by 23% to $12.75 billion during the April-June quarter of 2018-19, as compared to foreign fund inflows of $10.4 billion in April-June 2017-18. The broader markets were too broadly in line with the firm benchmark indices. On the sectoral front, select textile stocks were trading higher on quick estimates by DGCI&S showing that the worst seems to be over for the textile exports, as it increased 11% year-on-year (y-o-y) to Rs 19,636 crore in July. While textile exports grew by a robust 15% y-o-y to Rs 10,879 crore during the month, apparel exports advanced by a modest 6% y-o-y to Rs 8,757 crore. 

Asian markets were trading mostly in green, following yet another day of record highs on Wall Street as the U.S. and Mexico announced a new trade agreement. Back home, the BSE Sensex is currently trading at 38818.45, up by 124.34 points or 0.32% after trading in a range of 38760.58 and 38920.14. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.00%, while Small cap index up by 0.61%.

The top gaining sectoral indices on the BSE were Metal up by 1.29%, Energy up by 1.09%, Power up by 0.98%, Utilities up by 0.76% and Basic Materials up by 0.70%, while Consumer Durables down by 1.28%, Realty down by 0.61%, Bankex down by 0.46%, Capital Goods down by 0.22% and PSU down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 2.24%, NTPC up by 1.87%, Reliance Industries up by 1.37%, Tata Motors up by 1.26% and Coal India up by 1.16%. On the flip side, Yes Bank down by 3.47%, SBI down by 0.89%, Axis Bank down by 0.86%, Bajaj Auto down by 0.83% and ICICI Bank down by 0.81% were the top losers.

Meanwhile, State Bank of India’s (SBI) research report Ecowrap has stated that India’s current account deficit (CAD) is likely to touch 2.8% of the Gross Domestic Product (GDP) in the current fiscal (FY19) on account of surge in crude oil prices and moderate growth in exports. It also said that even merchandise trade imbalance is expected to increase to Rs 188 billion in FY19 as against Rs 160 billion in FY18. It indicated that India’s trade deficit, or the gap between exports and imports, in July 2018 widened to $18 billion, the most in more than five years, on the back of tepid export performance amidst higher import bill.

Oil imports registered an annual growth of 57.4% to Rs 12.4 billion, from Rs 7.8 billion in July 2017, and the report attributed the rise in the import bill to increase in oil price and rise in quantity of oil imported. Had the oil price remained the same as in 2017, it estimated that crude oil import bill would have been 31.7% lower in the first quarter of FY19. It also noted that whereas if the volume of crude oil import had remained the same as in previous year, crude import bill would have been 5.5% lower, thereby showing that price effect reigns supreme.

According to the report, the huge increase in trade deficit is more linked to the average export performance so far in FY19. It noted that the CAD is still expected to be majorly financed by non-debt creating (FDI and FPI) capital inflows, which constitute around 44% of the total capital flows. It said that the debt creating inflows which increased in the last fiscal year are expected to remain on the higher side this year as well, which will imply pressures on rupee in case there is a sudden reversal of capital flows.

The CNX Nifty is currently trading at 11733.10, up by 41.15 points or 0.35% after trading in a range of 11710.50 and 11760.20. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.28%, Hindalco up by 2.26%, NTPC up by 1.84%, Reliance Industries up by 1.79% and Tata Motors up by 1.28%. On the flip side, Yes Bank down by 3.22%, Titan Co down by 1.90%, GAIL India down by 0.85%, Axis Bank down by 0.85% and Bharti Infratel down by 0.76% were the top losers.

Asian markets were trading mostly in green; Straits Times increased 26.64 points or 0.82% to 3,252.26, Taiwan Weighted rose 87.34 points or 0.79% to 10,989.55, Jakarta Composite was up by 8.25 points or 0.14% to 6,034.22, Hang Seng increased 21.46 points or 0.08% to 28,292.73, KOSPI added 3.82 points or 0.17% to 2,303.12 and Nikkei 225 inched up 13.83 points or 0.06% to 22,813.47.

On the flip side, Shanghai Composite was down by 8.36 points or 0.3% to 2,772.54.