Markets trade in fine fettle in early deals

Indian equity benchmarks made a cautious start but soon gained traction to trade in fine fettle in early deals on Friday, with frontline gauges conquering their crucial 11,700 (Nifty) and 38,800 (Sensex) levels. Sentiments remained upbeat with Finance Minister Arun Jaitley’s statement that India is likely to surpass the UK to become the world’s fifth largest economy next year on growing consumption and strong economic activity. Traders also took some encouragement with a private report that the economic growth is expected to rise to 7.6% in the April-June quarter of 2018-19 from a sub-6% figure in the year-ago period mainly due to a low-base effect. However, some cautiousness persisted on the street with Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta’s statement that exporters are facing uncertainty due to a continuous depreciation of the domestic currency as they are not able to negotiate properly prices of goods in the global markets.

On the global front, Asian markets are trading mostly in red terrain at this point of time, as President Donald Trump’s plans to impose new tariffs on China and renewed turmoil in emerging markets weighed on investor sentiment. The US markets declined on Thursday on new concerns that the US-Chinese trade dispute will intensify.

Back home, the rupee slumped to a fresh record low of 71 against the dollar for the first time ever by falling 26 paise on persistent demand for the US currency amid rising crude prices. Cement sector stocks edged higher despite ICRA’s report that even with pick-up in cement demand in Q1 FY19, higher coal, pet coke prices and freight costs in the near-term are likely to put pressure on the profitability margins and debt metrics of the cement companies. In scrip specific developments, Dilip Buildcon soared on receiving LoA from MSRDC for new EPC Project and GAIL edged higher on inking MoU with Indian Railways.

The BSE Sensex is currently trading at 38821.28, up by 131.18 points or 0.34% after trading in a range of 38611.46 and 38838.45. 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 0.66%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.03%, IT up by 1.41%, TECK up by 1.32%, Telecom up by 1.03% and Utilities was up by 0.90%, while Energy down by 0.51% was the lone losing index on BSE.

The top gainers on the Sensex were Wipro up by 2.29%, Sun Pharma up by 2.10%, Infosys up by 2.05%, Power Grid Corporation up by 1.81% and ONGC up by 1.21%. On the flip side, Yes Bank down by 3.51%, Reliance Industries down by 1.11%, Vedanta down by 0.44%, Bharti Airtel down by 0.24% and HDFC Bank down by 0.10% were the top losers.

Meanwhile, expressing concerns over continues depreciation of the Indian currency, Federation of Indian Export Organisations (FIEO) has said that exporters are facing uncertainty due to this issue. FIEO President Ganesh Kumar Gupta has said that exporters are not able to negotiate properly prices of goods in the global markets.

Gupta said exporters are unable to hedge as they do not know where the rupee value would go tomorrow. With fluctuation in rupee value, he said that global buyers start asking for review of contracts. He added that only 20% exporters make profits due to the depreciation as they do not indulge in hedging practices and 80% do not get any benefit. Besides, exports grew by about 10% to $303 billion in 2017-18.

FIEO President further expressed hope that the rupee would stabilise at 67-68 in the coming days. Meanwhile, Indian rupee continued its fall and touched life-time low of 70.82 on August 30, 2018, on strong month-end demand for the US currency amid sustained foreign fund outflows.

The CNX Nifty is currently trading at 11718.70, up by 41.90 points or 0.36% after trading in a range of 11654.80 and 11727.65. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.74%, HCL Tech up by 2.41%, Wipro up by 2.32%, Dr. Reddys Lab up by 2.30% and Infosys up by 2.15%. On the flip side, Yes Bank down by 3.58%, Reliance Industries down by 1.32%, Vedanta down by 0.54%, BPCL down by 0.51% and Bharti Airtel down by 0.35% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 decreased 23.95 points or 0.1% to 22,845.55, Taiwan Weighted declined 77.52 points or 0.7% to 11,016.23, Straits Times slipped 5.77 points or 0.18% to 3,219.95, Jakarta Composite tumbled 72.26 points or 1.22% to 5,946.70, Hang Seng dropped 257.46 points or 0.92% to 27,906.59 and Shanghai Composite was down by 2.23 points or 0.08% to 2,735.51. On the other hand, KOSPI was up by 5.77 points or 0.25% to 2,313.12.