Benchmarks trade flat in early deals; Sensex hold 36,100 mark

Indian equity benchmarks made a cautious start and are trading flat in early deals on Thursday amid uncertainty in global markets. Though, traders are taking some solace with Crisil Ratings’ report showing that India's growth rate is likely to inch up to 7.3 percent in 2019-20, provided that there are normal rains and a stable political outcome of the general elections. It added that India is expected to clock a growth rate of 7.2 percent in the current financial year, up from 6.7 percent in 2017-18. Some support came with the United Nations' World Economic Situation and Prospects (WESP) 2019 report stating that India's economy is expected to grow at 7.4 per cent during 2018-19 and improve to 7.6 per cent in the next fiscal. It added that growth continues to be underpinned by robust private consumption, a more expansionary fiscal stance and benefits from previous reforms.

On the global front, Asian markets are trading in green at this point of time following gains on Wall Street, but gains were capped by political uncertainty in the US and worries about weakening global economic growth. The US markets ended higher on Wednesday on the back of strong quarterly earnings from companies like IBM, United Technologies and Procter & Gamble.

Back home, agriculture sector stocks remained in focus with the government think tank Niti Aayog’s statement that doubling Farmers Income by 2022 cannot be achieved if they are not able to bring reforms in Agriculture sector. He also asserted that the problems in the agriculture credit system should be addressed. In scrip specific developments, ITC surged on reporting 9% rise in Q3 net profit and Interglobe Aviation edged higher despite reporting 75% fall in Q3 net profit.

The BSE Sensex is currently trading at 36100.92, down by 7.55 points or 0.02% after trading in a range of 35996.68 and 36178.36. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.18%, while Small cap index was up by 0.02%.

The top gaining sectoral indices on the BSE were Realty up by 2.32%, FMCG up by 0.56%, Energy up by 0.52%, PSU up by 0.47% and Power was up by 0.42%, while Capital Goods down by 0.56%, Metal down by 0.47%, Industrials down by 0.40%, IT down by 0.33% and Auto was down by 0.29% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 1.40%, Asian Paints up by 0.99%, ITC up by 0.99%, Sun Pharma up by 0.79% and SBI up by 0.66%. On the flip side, Tata Motors down by 1.53%, Tata Motors - DVR down by 1.20%, Infosys down by 1.13%, Mahindra & Mahindra down by 0.92% and Coal India down by 0.73% were the top losers.

Meanwhile, Crisil Ratings in its latest 'India Outlook FY20' report has stated that India’s economic growth may improve to 7.3% in the fiscal year 2019-20 (FY20), provided that there are normal rains, oil prices lower than 2018 and a stable political outcome of the general elections. It also said that the country is expected to clock a growth rate of 7.2% in the current financial year (FY19), up from 6.7% in 2017-18. The report noted that with the government likely to stick to a fiscal consolidation path, the pick-up in growth is expected to be only gradual.

As per the report, a change in the growth mix is on cards, with private sector likely to take over the baton from the government. Highlighting that fiscal health remains a key risk, it said the fiscal deficit is likely to be 3.3% of the gross domestic product (GDP) in the next fiscal. The deficit is budgeted at 3.3% in the current fiscal. However, the rating agency cautioned that if the general elections this year yield a fractured mandate and derail/delay the process of reforms, the implications on sentiments, investments and growth could be adverse. Besides, it said global crude oil prices are expected to soften to settle at around $60-65 average per barrel in fiscal 2020, compared with $68-72 average per barrel in fiscal 2019 as overall global demand slows. Though, some price pressure could be felt in response to the recently announced supply cuts by the Organization of Petroleum Exporting Countries (OPEC).

On the inflation front, it said fiscal 2019 would be the second consecutive year of sub-4% Consumer Price Index (CPI)-based inflation, from an average 4.5% in fiscal 2017, CPI inflation fell to 3.6% in fiscal 2018. It further expects that inflation at 3.7% for fiscal 2019, given the continuous and sharp decline in food prices and slowdown in global crude oil prices compared with a few months ago. It said current account deficit (CAD) would reduce to 2.4% of GDP in fiscal 2020 from 2.6% in fiscal 2019. Moreover, the rupee will remain volatile and settle at 72 to a dollar on an average by March 2020, compared with an estimate of 71 to a dollar by March 2019. It added that domestic interest rates, which had risen last year, are expected to soften in fiscal 2020.

The CNX Nifty is currently trading at 10827.55, down by 3.95 points or 0.04% after trading in a range of 10798.65 and 10848.85. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.23%, Zee Entertainment up by 1.18%, Power Grid Corporation up by 1.18%, Grasim Industries up by 1.12% and Indian Oil Corporation up by 1.03%. On the flip side, Bharti Infratel down by 1.82%, Tata Motors down by 1.64%, Wipro down by 1.24%, Infosys down by 1.23% and Mahindra & Mahindra down by 0.96% were the top losers.

Asian markets are trading in green; Straits Times gained 14.94 points or 0.47% to 3,186.05, Hang Seng rose 36.86 points or 0.14% to 27,045.06, Taiwan Weighted jumped 16.47 points or 0.17% to 9,862.87, KOSPI advanced 10.03 points or 0.47% to 2,137.81, Jakarta Composite added 8.76 points or 0.14% to 6,459.93 and Shanghai Composite was up by 13.18 points or 0.51% to 2,594.18.