Benchmarks trade with caution ahead of RBI policy outcome

Indian equity benchmarks made a cautious start and are trading flat in early deals on Thursday as traders remained on sidelines ahead of the Reserve Bank of India’s (RBI) monetary policy decision, which is due later in the day. Market participants are expecting a rate cut from the monetary policy committee in its first bi-monthly policy of 2019-20. Traders are also eyeing Services PMI data for the month of March to be out later in the day. Market participants are getting some support with Commerce and Industry Minister Suresh Prabhu’s statement that India's exports are expected to reach $32.38 billion in March, the highest in any month so far, on account of healthy growth in sectors such as pharmaceuticals. He said that exports would cross $331 billion mark in the 2018-19 fiscal year. Some solace also came with Vice President M Venkaiah Naidu’s statement India would continue to grow at a higher economic growth rate until 2021, while citing the World Bank estimates. World Bank estimates suggest that India would continue to grow at a high rate until 2021.

On the global front, Asian markets are trading mostly in green at this point of time, as investors awaited developments on trade talks between the United States and China. The US markets ended higher on Wednesday, but off their intraday highs, as investors reacted to upbeat comments on US-China trade talks but weighed a shaky private-sector employment report.

Back home, telecom regulator Trai has directed operators to submit before it all tariff plans that they offer to select segments of customers at the end of every month. The new order for segmented tariff disclosures comes after the Supreme Court on January 21 held that there will be no stay on the impugned judgment (of TDSAT) except to the extent of remand. In scrip specific developments, L&T surged as its arm secures contracts across business segments and Bharti Airtel edged higher on launching e-book services for Airtel, non-Airtel customers.

The BSE Sensex is currently trading at 38879.79, up by 2.67 points or 0.01% after trading in a range of 38843.61 and 38939.35. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.12%, while Small cap index was up by 0.03%.

The top gaining sectoral indices on the BSE were Realty up by 0.82%, Telecom up by 0.64%, Capital Goods up by 0.41%, Power up by 0.39% and Auto was up by 0.37%, while Metal down by 1.10%, IT down by 0.87%, TECK down by 0.73%, Oil & Gas down by 0.43% and Energy was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.27%, Asian Paints up by 1.70%, Power Grid Corporation up by 1.30%, Hero MotoCorp up by 1.25% and Tata Motors up by 0.92%. On the flip side, HCL Tech down by 2.36%, Yes Bank down by 1.53%, Tata Steel down by 1.38%, ONGC down by 1.00% and Vedanta down by 0.91% were the top losers.

Meanwhile, expressing hopes over growth of India’s exports, Commerce and Industry Minister Suresh Prabhu has said that the country’s exports are expected to reach $32.38 billion in March, the highest in any month so far, on account of healthy growth in sectors such as pharmaceuticals. He added that exports would cross $331 billion mark in the 2018-19 fiscal year.

He further said that for the first time, India has crossed $19 billion figure in pharma exports this fiscal. He said that the country's exports were declining for long time but now this year, they would have record exports. The figures in 2018-19 would be the highest ever at a time when there is a worst scenario in the world trade front.

The minister said that the outbound shipments are growing because of concerted efforts by the ministry in the last one year. He said ‘We created a matrix between every product and every geography. Secondly, we had done series of road shows’.  He noted that export potential was tapped in regions such as Africa and Latin America. He also held several meetings with then line ministries including food, agri, pharma and IT ministry to resolve issues hindering exports.

Prabhu said that India is recording a healthy growth in exports despite the fact that countries are putting barriers and following protectionist measures. Imposition of high customs duties by the US on certain steel and aluminium products triggered a trade war kind of situation. India's exports grew by 8.85% to $298.47 billion during April-February 2018-19. Since 2011-12, India's exports have been hovering at around $300 billion. During 2017-18, the overseas shipments grew by about 10% to $303 billion.

The CNX Nifty is currently trading at 11645.10, up by 1.15 points or 0.01% after trading in a range of 11630.75 and 11661.30. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.51%, Bharti Airtel up by 2.36%, Indiabulls Housing up by 2.24%, Asian Paints up by 1.72% and Hero MotoCorp up by 1.52%. On the flip side, HCL Tech down by 2.87%, Zee Entertainment down by 2.55%, Hindalco down by 2.25%, Wipro down by 1.85% and Yes Bank down by 1.77% were the top losers.

Most of the Asian counters are trading in green; Nikkei 225 rose 13.24 points or 0.06% to 21,726.45, KOSPI gained 2.51 points or 0.11% to 2,205.78, Jakarta Composite jumped 8.82 points or 0.14% to 6,484.89 and Shanghai Composite was up by 18.11 points or 0.56% to 3,234.41. On the flip side, Straits Times slipped 4.74 points or 0.14% to 3,306.53 and Hang Seng was down by 155.14 points or 0.52% to 29,831.25.