Local equities trim some initial gains

Local equity benchmarks trimmed some of their initial gains in morning session but continue to trade in green territory.  Some cautiousness came with finance ministry’s statement that currency in circulation as percentage of GDP declined by over 1 percentage points to 10.48 per cent in the two years after demonetization. Some pessimism also spread among the investors with a report that lower-than-expected direct tax collection till last week has set the alarm bells ringing in the income tax (I-T) department, prompting a member of the Central Board of Direct Tax (CBDT) to send fresh missives to the principal chief commissioners asking them to urgently take all possible action to shore up revenue collection. But, markets continued their trade in positive terrain as traders were getting some support with a report that India has taken various measures to bolster the rural economy but the efficacy of the schemes would depend upon their implementation. The report also stated the prospects for rural development are encouraging in the current year and hoped that the general elections will increase attention to rural areas where the majority of voters live.

On the global front, Asian markets were trading mostly in red, as investors grow increasingly worried about the state of the global economy, sending them rushing to safe-haven assets and fuelling talk of possible recession. Back home, a private report stated that India will likely ask the US to delay by two months the implementation of the latter’s recent decision to withdraw duty benefits on annual Indian exports of $5.6 billion from May.

The BSE Sensex is currently trading at 38281.84, up by 148.96 points or 0.39% after trading in a range of 38148.44 and 38379.80. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.56%, while Small cap index was up by 0.73%.

The top gaining sectoral indices on the BSE were Realty up by 1.88%, IT up by 1.39%, TECK up by 1.22%, Industrials up by 0.63% and Consumer Durables was up by 0.58%, while, Telecom down by 0.08% and Power was down by 0.07% were the only losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 2.79%, Yes Bank up by 1.74%, Infosys up by 1.56%, Bajaj Finance up by 1.24% and HDFC was up by 1.07%. On the flip side, ONGC down by 1.75%, Power Grid down by 1.20%, Mahindra & Mahindra down by 0.73%, Bajaj Auto down by 0.68% and Hero MotoCorp was down by 0.59% were the top losers.

Meanwhile, ICRA, a rating agency, has said it is expecting that the domestic hotel industry would register a top line growth of 10-11% in current financial year (FY19) than the earlier expectation of 8.5%. The rating agency mentioned that the demand for room is expected to continue to grow by about 8-9% year-on-year over the medium term, on account of increasing domestic travel, buoyant meetings, incentives, conferencing and exhibitions (MICE) activity and higher FTAs, despite immediate headwinds from global geopolitical concerns and increasing local airfare.

The agency further highlighted that the demand in Mumbai would drive average room rates (ARRs). Healthy demand and limited supply in Delhi (which has about 75% of the NCR inventory) is expected to drive ARRs in the region, while Gurugram would continue to struggle in the immediate term because of the DIAL Aerocity supply. Hyderabad and Pune are expected to be strong growth markets over the next two years while healthy demand will support Bengaluru, despite heavy supply addition.

Besides, ICRA is expecting that operating margin of industry will improve by approximately 150 basis point to 21- 21.5% during FY2019. Margins are expected to continue the growth trajectory during the next few years to hit a high of approximately 26% during FY2023.

The CNX Nifty is currently trading at 11491.95, up by 46.90 points or 0.41% after trading in a range of 11452.45 and 11521.25. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.82%, Indiabulls Housing Finance up by 2.73%, Adani Ports up by 2.36%, Yes Bank up by 1.60% and Tech Mahindra was up by 1.55%. On the flip side, ONGC down by 1.78%, Dr. Reddy’s Lab down by 1.38%, Power Grid down by 1.17%, Hindalco down by 0.72% and Mahindra & Mahindra was down by 0.66% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 349.17 points or 1.63% to 21,029.56, Hang Seng decreased 47.94 points or 0.17% to 28,680.31, Taiwan Weighted dropped 17.58 points or 0.17% to 10,525.12, KOSPI fell 15.39 points or 0.72% to 2,130.23 and Shanghai Composite was down by 7.89 points or 0.26% to 3,014.83.

On the other hand; Jakarta Composite soared 3.92 points or 0.06% to 6,448.66 and Straits Times was up by 13.09 points or 0.41% to 3,211.48.