Benchmarks start FY20 on optimistic note

Indian equity benchmarks started the new financial year on an optimistic note and are trading jubilantly in early deals on expectations that the RBI may cut key lending rates by another 25 basis points on April 04, to boost economic activities amid fears of global slowdown impacting domestic growth prospects. Traders took some encouragement with the RBI’s data showing that India's foreign exchange reserves continued to surge for the third week in a row, adding $1.029 billion at $406.667 billion in the week to March 22. However, traders shrugged off the Controller General of Accounts (CGA) data stating that the country's fiscal deficit touched 134.2 per cent of the full-year revised budgeted estimate at the end of February 2019, mainly due to tepid growth in revenue collections. In absolute term, fiscal deficit for April-February 2018-19 was Rs 8.51 lakh crore as against the revised estimate (RE) of Rs 6.34 lakh crore for the entire year. Traders also ignored the RBI’s data that the country's current account deficit widened to 2.5 per cent of GDP in third quarter of Financial year 2019 from 2.1 per cent a year ago, primarily on account of a higher trade deficit. In absolute terms, the CAD, or the gap between inflow and outflow of foreign exchange in the current account, was $16.9 billion in the October-December 2018 period, up from $13.7 billion in the year-ago period.

Global cues too remained supportive with most of the Asian counters are trading in green at this point of time as positive Chinese factory gauges and signs of progress in Sino-US trade talks supported sentiment. The US markets settled higher on Friday as optimism over progress on US-China trade talks overshadowed concerns about a slowing economic expansion.

Back home, select banking sector stocks remained buzzing with report that Bank of Baroda is catapulting itself for a larger play in the system with the merger of Dena Bank and Vijaya Bank with itself from April 01. The government-forced merger, announced last in September, creates the third largest bank in the country after State Bank of India and HDFC Bank. The auto sector stocks remained in focus, reacting to their monthly sales numbers.

The BSE Sensex is currently trading at 38965.04, up by 292.13 points or 0.76% after trading in a range of 38844.81 and 38975.27. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 0.77%, while Small cap index was up by 1.02%.

The top gaining sectoral indices on the BSE were Metal up by 2.70%, Basic Materials up by 2.04%, Capital Goods up by 1.66%, Industrials up by 1.55% and Auto was up by 1.29%, while Oil & Gas down by 0.10% and Energy was down by 0.03% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 5.77%, Tata Motors - DVR up by 5.24%, Vedanta up by 4.90%, Tata Steel up by 2.57% and Larsen & Toubro up by 2.45%. On the flip side, ONGC down by 1.32%, Coal India down by 0.97%, NTPC down by 0.70%, Indusind Bank down by 0.34% and Bajaj Finance down by 0.33% were the top losers.

Meanwhile, the Controller General of Accounts (CGA) in its latest data has stated that India’s fiscal deficit touched 134.2% of the full-year revised budgeted estimate at the end of February 2019, mainly due to tepid growth in revenue collections. In absolute term, fiscal deficit for April-February 2018-19 was Rs 8.51 lakh crore as against the revised estimate (RE) of Rs 6.34 lakh crore for the entire year.

The data showed that revenue receipts of the central government was Rs 12.65 lakh crore or 73.2% of the revised budgetary estimate (BE) at February end. In the same period last fiscal, the revenue collection was 78.2% of the estimates. The government's tax revenue stood at Rs 10.94 lakh crore and non-tax revenue was Rs 1.7 lakh crore.

On the expenditure front, the CGA said total expenditure incurred by the government during April-February 2018-19 was Rs 21.88 lakh crore (89.08% of RE), of which Rs 19.15 lakh crore was on revenue account and Rs 2.73 lakh crore on capital account. Out of the total revenue expenditure, Rs 5.01 lakh crore was on account of interest payments and Rs 2.63 lakh crore on major subsidies.

However, Economic Affairs Secretary S C Garg has said that the government is committed to restrict the fiscal deficit at 3.4% of the Gross Domestic Product (GDP) as envisaged in the Budget. Meanwhile, the finance ministry in a statement said that Rs 5.96 lakh crore has been transferred to the state governments as devolution of share of taxes by the central government up to February, which is Rs 67,043 crore higher than the corresponding period of last year 2017-18.

The CNX Nifty is currently trading at 11697.40, up by 73.50 points or 0.63% after trading in a range of 11664.60 and 11699.70. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 5.71%, Hindalco up by 5.57%, Vedanta up by 4.31%, GAIL India up by 3.12% and Tata Steel up by 2.76%. On the flip side, Indian Oil Corporation down by 2.76%, Indiabulls Housing down by 2.26%, ONGC down by 1.44%, Zee Entertainment down by 1.35% and Coal India down by 1.35% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 soared 335.75 points or 1.58% to 21,541.56, Straits Times jumped 26.17 points or 0.81% to 3,239.05, Hang Seng surged 478.83 points or 1.65% to 29,530.19, Taiwan Weighted rose 52.32 points or 0.49% to 10,693.36, KOSPI Surged 26.39 points or 1.23% to 2,167.06 and Shanghai Composite was down by 70.73 points or 2.29% to 3,161.49. On the flip side, Jakarta Composite was down by 9.80 points or 0.15% to 6,458.96.