Local equities continue to trade in positive territory

Local equity benchmarks continued their trade in positive territory in morning session, with Sensex and Nifty gaining over 300 and 60 points, respectively. Traders remained energized with Chief Economic Advisor Krishnamurthy Subramanian’s statement that inflation has remained well under control during the Modi government’s tenure, providing relief to the middle class and the poor. Low prices, strong monetary policy framework by the Reserve Bank of India (RBI) and economic reforms have boosted the domestic consumption in the economy. The traders overlooked the RBI’s data that the country's current account deficit widened to 2.5% of Gross Domestic Product (GDP) in third quarter of Financial year 2019 from 2.1% a year ago, primarily on account of a higher trade deficit. Besides, a report stated that India’s current account deficit (CAD) came in at $16.9 billion or 2.5% of the GDP in October-December 2018-19, up from $13.7 billion (2.1% GDP) in the year-ago quarter but lower than $19.1 billion or 2.9% of GDP in the preceding quarter. High merchandise trade deficits due to sluggish exports kept the CAD at relatively high levels in first three quarters of FY19.

On the global front, Asian markets were trading mostly in green, building on last week's healthy gains with investors buoyed by optimism over China-US trade talks and forecast-busting Chinese factory data. Back home, sales of renewable energy certificates declined over 22% to 1.25 crore units this fiscal on IEX and PXIL as compared to 1.61 crore in 2017-18, mainly due to lower inventory (supply). In March, sales of RECs or green certificates declined by over 51 per cent to 11.78 lakh from 24.26 lakh in the same month last year. The data shows that in 2018-19, the RECs sales dropped 4% to 89.55 lakh as against 93.29 lakh in the previous fiscal, largely due to the lower REC inventory.

The BSE Sensex is currently trading at 38994.43, up by 321.52 points or 0.83% after trading in a range of 38844.81 and 39028.67. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.94%, while Small cap index was up by 1.27%.

The top gaining sectoral indices on the BSE were Metal up by 2.92%, Basic Materials up by 2.08%, Auto up by 1.78%, Industrials up by 1.62%, Capital Goods up by 1.55%, while Oil & Gas down by 0.28% and Energy was down by 0.18% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 6.02%, Tata Motors - DVR up by 5.89%, Vedanta up by 4.68%, Tata Steel up by 3.01% and Bharti Airtel was up by 2.34%. On the flip side, IndusInd Bank down by 1.00%, ONGC down by 0.94%, Coal India down by 0.89%, HDFC down by 0.07% and Kotak Mahindra Bank was down by 0.06% were the top losers.

Meanwhile, raising concerns over India’s fiscal position, the Reserve Bank of India (RBI) has stated that the country's current account deficit (CAD) widened to 2.5% of Gross Domestic Product (GDP) in Q3FY19 from 2.1% a year ago, primarily due to a higher trade deficit. In absolute terms, India’s CAD widened to $16.9 billion in the October-December 2018 quarter against $13.7 billion in the year ago quarter.

However, it was lower vis-a-vis preceding quarter’s $19.1 billion (2.9% of GDP). The widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit at $49.5 billion as compared with $44.0 billion a year ago. The CAD increased to 2.6% of GDP during the April-December 2018 period, from 1.8% in April-December 2017 on the back of widening of the trade deficit. CAD arises when a country’s total imports of goods, services and transfers is greater than exports.

Besides, the RBI stated that portfolio investment recorded net outflow of $2.1 billion in Q3 of FY19- as compared with an inflow of $5.3 billion in Q3 last year on account of net sales in the equity market. Net inflow on account of external commercial borrowings increased to $2 billion, from $0.3 billion a year ago. Non-Resident Indian (NRI) deposits nudged up only $139 million against $3.32 billion.

The CNX Nifty is currently trading at 11692.20, up by 68.30 points or 0.59% after trading in a range of 11664.60 and 11715.65. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 5.57%, Tata Motors up by 5.48%, Vedanta up by 4.39%, Tata Steel up by 2.92% and GAIL India was up by 2.89%. On the flip side, Indian Oil Corporation down by 2.86%, BPCL down by 1.64%, Indiabulls Housing Finance down by 1.61%, Zee Entertainment down by 1.45% and Coal India was down by 1.29% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 446.68 points or 1.54% to 29,498.04, Nikkei 225 surged 294.10 points or 1.39% to 21,499.91, Shanghai Composite gained 70.73 points or 2.29% to 3,161.49, KOSPI rose 27.97 points or 1.31% to 2,168.64 and Straits Times was up by 25.99 points or 0.81% to 3,238.87. On the other hand, Taiwan Weighted dropped 2.40 points or 0.02% to 10,638.64 and Jakarta Composite was down by 7.21 points or 0.11% to 6,461.55.