Markets recover from initial downturns; trade in fine fettle

Indian equity benchmarks made a smart recovery to turn green in early deals after a negative start. Traders turned optimistic after the Finance Ministry in its 2018 review stated that the Indian economy is projected to be the fastest-growing major economy in the current and upcoming fiscal 2019-20. It also emphasized that the government has taken several steps to boost investors’ confidence. It added that the average growth of the Indian economy between 2014-15 and 2017-18 was 7.3%, fastest among the major economies in the world. Some support also came with the Finance Ministry’s another statement that the direct tax-to-GDP ratio of 5.98% achieved during 2017-18 fiscal is the best in the last 10 years. It was 5.57% in 2016-17 and 5.47% in 2015-16. Also, traders were getting some encouragement with the government’s decision to provide 3% interest subsidy to merchant exporters, entailing an expenditure of Rs 600 crore, to enhance liquidity with a view to boosting outbound shipments.

On the global front, Asian markets are trading mostly in red at this point of time after Apple Inc. added to global growth concerns by cutting its guidance due to weaker sales in China. The US markets ended marginally higher on Wednesday, extending a recent stretch of volatility as anxiety about global growth and interest rates rippled across markets.

Back home, banking sector stocks remained in green after the Reserve Bank of India’s (RBI) data showed that the banking sector failed to meet the priority-sector lending (PSL) targets overall. The banks also failed to meet targets of specific sectors such as agriculture and micro, small and medium enterprises (MSMEs). PSBs met their PSL target for agriculture of 18%, private banks and foreign banks failed to meet the targets at 16.2% and 16.7%, respectively.  Coal sector stocks remained buzzing with Minister for Coal, Piyush Goyal’s statement that the current focus of the government is on boosting production from operational coal mines.

The BSE Sensex is currently trading at 35962.47, up by 70.95 points or 0.20% after trading in a range of 35778.40 and 35979.52. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.45%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were FMCG up by 0.87%, Realty up by 0.69%, Telecom up by 0.63%, Consumer Durables up by 0.61% and Auto was up by 0.57%, while Oil & Gas down by 0.82%, PSU down by 0.32%, Energy down by 0.14% and Metal was down by 0.11% were the few losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.02%, Maruti Suzuki up by 1.00%, Bajaj Finance up by 0.93%, Vedanta up by 0.91% and Tata Motors - DVR up by 0.89%. On the flip side, ONGC down by 1.63%, Tata Steel down by 1.02%, HDFC Bank down by 0.44%, Power Grid Corporation down by 0.41% and Coal India down by 0.40% were the top losers.

Meanwhile, expressing optimism over India’s economic growth, the Finance Ministry in its Year End Review 2018 has stated that the Indian economy is on track to maintain a high growth rate in the current global environment. It said the Indian economy is projected to be the fastest-growing major economy in the current fiscal (FY19) and upcoming fiscal 2019-20 (FY20). It added that this is borne by Gross Domestic Product (GDP) growth of 7.6% in the first half of 2018-19. It also emphasized that the government has taken several steps to boost investors’ confidence.

The average growth of the Indian economy between 2014-15 and 2017-18 was 7.3%, fastest among the major economies in the world. Pointing out various initiatives taken to improve the confidence and boost the growth of the Indian economy, it said there were measures to boost manufacturing, comprehensive reforms in the foreign direct investment policy, special package for the textile industry, push to infrastructure development by giving infrastructure status to affordable housing and focus on coastal connectivity.

The Ministry also said the success of the government policies is further reaffirmed and underscored when the international organisations such as the World Bank and the IMF recognise India as the fastest-growing emerging economy in the world and applaud the resilient and stable growth India has witnessed. On inflation front, it said the country witnessed moderation during 2017-18 and this progress is a result of a number of initiatives and reforms undertaken by the government which follows in the subsequent pages. Consumer Price Index averaged 3.3% during the period which is the lowest in the last six financial years.

The CNX Nifty is currently trading at 10805.35, up by 12.85 points or 0.12% after trading in a range of 10750.00 and 10810.85. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.10%, Bajaj Finserv up by 1.14%, Maruti Suzuki up by 1.05%, Bajaj Finance up by 1.03% and Bajaj Auto up by 0.90%. On the flip side, HPCL down by 2.71%, BPCL down by 1.94%, Indian Oil Corporation down by 1.60%, Eicher Motors down by 1.59% and ONGC down by 1.36% were the top losers.

Asian markets are trading mostly in red; Straits Times shed 23.38 points or 0.77% to 3,015.51, Hang Seng slipped 72.59 points or 0.29% to 25,057.76, Taiwan Weighted fell 63.55 points or 0.67% to 9,490.59 and KOSPI was down by 2.23 points or 0.11% to 2,007.77.

On the flip side, Jakarta Composite gained 24.60 points or 0.40% to 6,205.78 and Shanghai Composite was up by 0.07 points to 2,465.36.