Benchmarks trade in fine fettle on firm global cues

Buoyed by rally across the globe, Indian equity markets have made an optimistic start and are now trading fine fettle, with Sensex and Nifty recapturing their crucial 36,300 and 10,900 levels, respectively. Traders took support of the jubilation in the Asian peers after US and Chinese leaders brokered a truce in their trade conflict, a relief for the global economic outlook and a tonic for emerging markets. Sentiment remained up-beat with a report showing that overseas investors have pumped Rs 12,260 crore into the Indian capital markets in November, making it the highest inflow in 10 months due to falling crude oil prices and sharp rupee appreciation. However, upside remained capped on report that the Central Statistics Office’s (CSO) latest report showed that India’s gross domestic product (GDP) grew 7.1% in July-September, down from 8.2% in the previous quarter, as consumption demand moderated and farm sector displayed signs of weakness. Also, growth of eight infrastructure sectors slowed down to 4.8% in October 2018, as compared to 5% in October 2017. Besides, the Goods and Services (GST) collection in November dropped to Rs 97,637 crore, lower than Rs 1 lakh crore collected previous month. Meanwhile, investors will be eyeing manufacturing PMI data to be out later in the day.

On the global front, Asian markets were trading higher on Monday, with gains of over a percent, after the United States agreed to suspend imposing tariffs on China for three months. The US will hold off raising levies on Chinese goods on January 1, while China promised to buy more from the US and enter a 90-day period of talks to bring an end to the dispute. Back home, most of the banking sector stocks were trading in green with report that global rating agency Moody’s gave a stable (Baa2) outlook to India’s banking system, driven by the ongoing progress on asset quality front and better operating environment. In scrip specific development, Sun Pharm declined over 9% on reports that the SEBI has initiated an inquiry into the affairs of pharma major on the basis of a whistle-blower complaint.

The BSE Sensex is currently trading at 36,359.97, up by 165.67 points or 0.46% after trading in a range of 36,311.54 and 36,446.16. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.30%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Metal up by 2.68%, Realty up by 1.99%, Basic Materials up by 1.14%, Telecom up by 1.00% and FMCG was up by 0.82%, while Healthcare down by 1.55%, Oil & Gas down by 0.32% and Industrials was down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 3.17%, Tata Steel up by 2.74%, Coal India up by 1.99%, NTPC up by 1.96% and Hindustan Unilever was up by 1.33%. On the flip side, Sun Pharma down by 9.33%, Yes Bank down by 1.86%, ICICI Bank down by 0.63%, Mahindra & Mahindra down by 0.51% and Hero MotoCorp was down by 0.33% were the top losers.

Meanwhile, after touching over a two-year high of 8.2% in April-June quarter (Q1), India’s economic growth slowed down 7.1% in July-September quarter (Q2) of current fiscal year (FY19), as consumption demand moderated and farm sector displayed signs of weakness. The growth was lowest in three quarters, but better than 6.3% in the same period of the previous year. Even though the Gross Domestic Product (GDP) growth slows, the country still remained ahead of China to retain the tag of the world’s fastest growing major economy.

As per the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation data, GDP at Constant (2011-12) Prices in Q2 of 2018-19 was estimated at Rs 33.98 lakh crore, as against Rs 31.72 lakh crore in Q2 of 2017-18, showing a growth rate of 7.1%. Quarterly GVA (Basic Price) at Constant (2011-2012) prices for Q2 of 2018-19 was estimated at Rs 31.40 lakh crore, as against Rs 29.38 lakh crore in Q2 of 2017-18, showing a growth rate of 6.9% over the corresponding quarter of previous year. GDP at Basic Prices in April-September (H1) of 2018-19 was estimated at Rs 63.03 lakh crore, as against Rs 58.67 lakh crore in H1 of 2017-18, showing a growth rate of 7.4%. GVA at Basic Price in H1 of 2018-19, was estimated at Rs 82.48 lakh crore, as against Rs 73.37 lakh crore in H1 of 2017-18, showing an increase of 12.4%.

The CSO said except mining and broadcasting all other sectors have recorded improvement in their growth. Mining and quarrying output has declined by 2.4% in the quarter under review from a growth of 6.9% in year ago period. Services related to Broadcasting sector grew by 6.8% as compared to growth of 8.5% in Q2FY18. However, the manufacturing activities expanded at 7.4% in the quarter, up from 7.1% in the year ago quarter. The construction sector too showed an improvement by recording a growth of 7.8% as against 3.1% earlier. The farm sector too grew at a higher rate of 3.8% in the quarter as against 2.6% a year ago. Besides, utility services sector grew by 9.2% as compared to 7.7% in Q2 2017-18. Financial services sector grew by 6.3% as compared to 6.1% in Q2FY18. Public Administration, Defence and Other Services sector grew by 10.9% as compared to 6.1% in Q2FY18.

Besides, the government attributed the slowdown in India’s GDP growth rate during the second quarter of 2018-19 to a higher base effect, higher import bill on account of oil prices and weakening of the rupee. It said that the economy is on track to maintain a high growth rate in the current global environment. Moreover, Economic Affairs Secretary Subhash Chandra Garg said the 7.1% GDP growth for September quarter ‘seems disappointing’. He said while manufacturing and agriculture growth was steady, construction and mining reflected deceleration due to the monsoon. However, he said the half-year growth at 7.4% was ‘quite robust and healthy’.

The CNX Nifty is currently trading at 10,911.25, up by 34.50 points or 0.32% after trading in a range of 10,899.80 and 10,941.20. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.87%, Vedanta up by 3.24%, Indiabulls Housing Finance up by 2.98%, Tata Steel up by 2.82% and NTPC was up by 1.96%. On the flip side, Sun Pharma down by 9.55%, HPCL down by 2.19%, Yes Bank down by 1.94%, UPL down by 1.32% and Indian Oil Corporation was down by 1.19% were the top losers.

Asian markets are trading in green; Nikkei 225 jumped 295.26 points or 1.3% to 22,646.32, Taiwan Weighted advanced 249.82 points or 2.46% to 10,137.85, Hang Seng surged 710.50 points or 2.61% to 27,217.25, Straits Times rose 64.71 points or 2.03% to 3,182.32, Shanghai Composite gained 75.26 points or 2.83% to 2,663.45, KOSPI increased 35.07 points or 1.64% to 2,131.93 and Jakarta Composite was up by 74.06 points or 1.21% to 6,130.18.