Benchmarks trade slightly in green in early deals

Indian equity benchmarks have made a positive start and are trading slightly in green as traders are getting some encouragement with Finance Minister Arun Jaitley’s statement that the new insolvency law, indirect tax regime and demonetization will help drive India’s growth rate and sustain it at 8%. Investors took note of the government’s data showing that fiscal deficit touched 94.7% of the FY18 estimate at end of August, marginally better than 96.1% at the same point last fiscal. In absolute terms, fiscal deficit at end of August was Rs 5.91 lakh crore. Adding to the optimism, the commerce and industry ministry has said that the government’s export promotion measures, implementation of minimum standards for imports, and continued healthy inflow of remittances by non-resident Indians will help control the country’s rising current account deficit (CAD).

On the global front, Asian markets are trading mostly in green on Wednesday, shrugging of tepid close on the Wall Street. The US markets ended mostly lower on Tuesday as rising interest rates hurt stocks that pay big dividends and higher oil prices pushed transportation and shipping companies lower.

Back home, banking sector stocks edged higher with Union finance minister Arun Jaitley’s statement that non-performing assets (NPA) of public sector banks (PSB) are on the decline as recoveries have picked up, but it's a challenge to loan growth. Finance minister said recoveries have not just picked up because of National Company Law Tribunal (NCLT) resolutions, but also borrowers are paying up in anticipation of losing companies. Stocks related to energy sector remained in focus with Moody’s report that the share of renewable energy in the country’s electricity generation mix is likely to rise to around 18% by 2022, from 7.8% at present, owing to the continuous focus on capacity addition from solar and wind.

The BSE Sensex is currently trading at 36684.10, up by 32.04 points or 0.09% after trading in a range of 36593.56 and 36938.74. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.48%, while Small cap index was up by 0.40%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.10%, Metal up by 0.75%, Basic Materials up by 0.73%, Consumer Durables up by 0.50% and Telecom was up by 0.37%, while FMCG down by 0.81%, IT down by 0.11%, Energy down by 0.05%, TECK down by 0.04% and Auto was down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.30%, Tata Steel up by 1.75%, Mahindra & Mahindra up by 1.70%, Axis Bank up by 0.80% and HDFC Bank up by 0.77%. On the flip side, Wipro down by 1.91%, ITC down by 1.54%, Kotak Mahindra Bank down by 1.15%, Hindustan Unilever down by 1.11% and Tata Motors - DVR down by 1.10% were the top losers.

Meanwhile, with the help of better expenditure management, India’s fiscal deficit during the first five months (April-August) of the current fiscal (FY19) has shown improvement. The fiscal deficit stood at 94.7% of the Budget Estimate (BE) at August-end of FY19, better than 96.1% of BE at August-end of the last financial year.

The Controller General of Accounts (CGA) data showed that in actual terms, the fiscal deficit or gap between the total expenditure and receipts was Rs 5.91 lakh crore in the first five months period of 2018-19 financial year. Besides, the government has budgeted to cut fiscal deficit to 3.3% of GDP in 2018-19 from 3.53% in the previous year. The fiscal deficit target for 2018-19 is Rs 6.24 lakh crore.

According to the data, the tax collection (net) at end-August was Rs 3.66 lakh crore or 24.7% of BE. The total receipts of the government during April-August 2018 were Rs 4.79 lakh crore or 26.4% of BE. In the similar period of 2017-18, the collection was 26.6% of BE. Total expenditure during April-August 2018 was Rs 10.7 lakh crore or 43.8% of BE. The expenditure was lower as a percentage of BE in the year-ago period.

As per the Union Budget 2018-19, the revenue expenditure has been estimated at Rs 21.42 lakh crore. The CGA data showed that till August, the expenditure under the head was 43.8% (Rs 9.38 lakh crore) of BE, lower than 45.8% in the previous year. However, the capital expenditure was Rs 1.32 lakh crore or 44.1% of BE, higher over the previous year.

The CNX Nifty is currently trading at 11095.05, up by 27.60 points or 0.25% after trading in a range of 11060.90 and 11145.55. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 7.27%, Yes Bank up by 3.19%, Lupin up by 2.54%, Eicher Motors up by 2.00% and Mahindra & Mahindra up by 1.97%. On the flip side, ITC down by 1.63%, HCL Tech down by 1.60%, Wipro down by 1.55%, ONGC down by 1.32% and Kotak Mahindra Bank down by 0.95% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 gained 29.59 points or 0.12% to 23,969.85, Straits Times increased 20.43 points or 0.63% to 3,256.51, Jakarta Composite rose 26.59 points or 0.45% to 5,900.89, Hang Seng surged 451.32 points or 1.61% to 27,950.71 and Shanghai Composite was up by 35.29 points or 1.25% to 2,816.43. On the flip side, Taiwan Weighted was down by 11.89 points or 0.11% to 10,966.96.