Indian equities remain in green terrain

Indian equity benchmarks continued their trade in green territory in afternoon session, on buying by funds and retail investors despite weakness in other Asian markets. Sentiments remained positive with the World Bank in its latest report on South Asia saying that growth in India is firming up and projected to accelerate to 7.3% in the 2018-19 fiscal and 7.5% in the next two years. Some support also came with Union Finance Minister Arun Jaitley promising more steps to cut the current account deficit (CAD) and bolster foreign exchange inflows, seeking to calm frayed nerves amid a stock market crash and falling rupee. However, the markets pared some gains with Exporters’ body Federation of Indian Export Organisations’ (FIEO) statement that the rupee depreciation is increasing the cost of imported capital goods, inputs and various services used by exporters paid in foreign currency, particularly the freight charges. On the sectoral front, Infrastructure sector was in focus with Commerce and Industry Minister Suresh Prabhu stating there is a need to work on innovative instrument and structure to attract global money for investment in infrastructure sector.

On the global front, Asia counters were trading mostly in red, after China injected extra money into its cooling economy. Back home, the BSE Sensex is currently trading at 34496.28, up by 119.29 points or 0.35% after trading in a range of 34031.98 and 34636.43. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.76%, while Small cap index was down by 0.66%.

The top gaining sectoral indices on the BSE were Energy up by 3.63%, Oil & Gas up by 1.65%, Bankex up by 1.09%, PSU up by 0.66% and Auto up by 0.53%, while IT down by 1.61%, Realty down by 1.59%, TECK down by 1.43%, Metal down by 1.40% and Basic Materials down by 0.97% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 8.05%, Reliance Industries up by 4.99%, Hero MotoCorp up by 3.54%, Kotak Mahindra Bank up by 3.29% and Coal India up by 2.74%. On the flip side, Vedanta down by 4.27%, Wipro down by 2.55%, TCS down by 1.91%, Tata Steel down by 1.57% and HDFC down by 1.39% were the top losers.

Meanwhile, asserting the government’s commitment to meet fiscal deficit target of 3.3% for the current fiscal, Finance Minister Arun Jaitley has said that there are some more steps on the anvil to narrow the current account deficit (CAD) and bolster foreign exchange inflows. He also said that India will continue to be the leading destination of foreign direct investment (FDI) despite the adverse global situation. However, he pointed out that there could be some transient problem in foreign portfolio investment but these would not continue depending on the global situation.

The minister has stated that maintaining fiscal prudence is one of the top priorities of the government. He said ‘gradually on fiscal deficit we had glide down from 4.6% we are now targeting 3.3% (of GDP) this year and I am quite certain with the kind of revenue coming particulary from the direct taxes, we will achieve that.’ As far as CAD is concerned, he said it is linked to global oil prices because foreign exchange is mostly spent on crude oil. He also said ‘some more steps are likely but there are two factors... external one is the oil prices and second is the policy with the United States which is leading to hardening of the dollar itself therefore adversely impacting all currencies of the world.’

Citing some of the steps to bridge CAD and bolster flows in the recent past, Jaitley said that the sovereign borrowing target was reduced by Rs 700 billion for the current fiscal and withholding tax on masala bonds has been withdrawn for the moment. Besides, he said that the government recently allowed state-owned oil marketing companies to raise $10 billion through external commercial borrowing (ECB). On Indian economy, he said that the ability of the country to maintain the present growth rate for a decade or two is reasonably certain.

The CNX Nifty is currently trading at 10337.45, up by 21.00 points or 0.20% after trading in a range of 10201.95 and 10398.35. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 7.04%, Reliance Industries up by 4.91%, UPL up by 4.25%, Indiabulls Housing Finance up by 3.52% and Hero MotoCorp up by 3.40%. On the flip side, Hindalco down by 5.89%, Vedanta down by 4.86%, HCL Tech down by 2.81%, Wipro down by 2.63% and TCS down by 2.12% were the top losers.

Asia counters were trading mostly in red; Hang Seng decreased 336.32 points or 1.28% to 26,236.25, Taiwan Weighted fell 61.19 points or 0.59% to 10,455.93, KOSPI shed 13.69 points or 0.61% to 2,253.83, Straits Times dipped 20.47 points or 0.64% to 3,189.32 and Shanghai Composite dropped 106.37 points or 3.92% to 2,714.98.

On the flip side, Jakarta Composite rose 36.63 points or 0.63% to 5,768.57.