Benchmarks trade with traction; Nifty reclaims 11650 mark

Indian equity benchmarks made an optimistic start and are trading in fine fettle in early deals on Friday with frontline gauges recapturing their crucial 38,800 (Sensex) and 11,650 (Nifty) levels. Sentiments remained upbeat with Finance Secretary Subhash Chandra Garg’s statement that the government is close of meeting fiscal deficit target of 3.4 per cent for 2018-19. The government in the interim Budget in February revised upward the fiscal deficit target to 3.4 per cent from 3.3 per cent of Gross Domestic Product (GDP) estimated earlier for the financial year ended March 31. Some support also came with report that the Income Tax department said it added 1.07 crore new taxpayers while the number of ‘dropped filers' came down to 25.22 lakh in 2017-18, showing the positive impact of demonetisation. Market participants shrugged off report that Fitch Ratings kept India’s sovereign rating unchanged at the lowest investment grade of BBB- with a stable outlook. This is the 13th year in a row that Fitch has rated India at BBB-.

Global cues too remained supportive with most of the Asian counters are trading in green at this point of time following gains on Wall Street, amid holiday in China and Hong Kong. The US markets ended mostly higher on Thursday as investors watched for more details about a potential trade deal between China and the US, while there was some cautiousness ahead of US payrolls data.

Back home, banking sector stocks remained in focus with report that the RBI said it will hold further discussions with banks on linking interest rates on personal, home, auto and MSME loans with various benchmark rates, a move that would further delay issuance of final guidelines on the issue. Agriculture related stocks remained buzzing with report that India has issued a combined 650,000 tonne import quota for pulses for the fiscal year to March 2020, allowing overseas purchases of protein-rich pulse varieties that are a staple of Indian cuisine.

The BSE Sensex is currently trading at 38846.06, up by 161.34 points or 0.42% after trading in a range of 38763.12 and 38908.95. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.74%, while Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were Realty up by 1.68%, Metal up by 1.06%, Capital Goods up by 1.02%, Basic Materials up by 0.96% and IT was up by 0.91%, while FMCG was down by 0.11% was the sole losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 2.05%, Yes Bank up by 1.96%, Larsen & Toubro up by 1.45%, Indusind Bank up by 1.41% and Bajaj Finance up by 1.39%. On the flip side, Hero MotoCorp down by 0.88%, Asian Paints down by 0.57%, Bharti Airtel down by 0.41%, Hindustan Unilever down by 0.37% and HCL Tech. down by 0.36% were the top losers.

Meanwhile, expressing optimism over fiscal position of the country, Finance Secretary Subhash Chandra Garg has said the government is close to meet fiscal deficit target of 3.4% for 2018-19. The government in the interim Budget in February revised upward the fiscal deficit target to 3.4% from 3.3% of Gross Domestic Product (GDP) estimated earlier for the financial year ended March 31. He said ‘some numbers are still to come. So, we will wait for a couple of days. There will always be some shortfall but sum and substance of that is what the net impact on the deficit is.’

Besides, direct tax collection was revised upward to Rs 12 lakh crore. The government had originally budgeted to collect Rs 11.50 lakh crore in 2018-19 from direct taxes, which included corporate tax and personal income tax. Likewise, in 2018-19, GST collection is pegged at Rs 6.43 lakh crore (Revised Estimate), which is lower than the targeted Rs 7.43 lakh crore (Budget Estimate). On the indirect tax front, customs collection in 2018-19 is pegged at Rs 1.30 lakh crore (RE).

Garg also said the financial sector in India has to be cognizant of the changes that are happening in the different elements of the economy. He outlined three main areas that need investment, these areas being infrastructure, digital economy and circular economy. He further said that the infrastructure sector in particular needs more investment and they need the top global government pools of sovereign and pension funds to invest in India. Digital infrastructure required non-traditional sources of finance such as private equity and venture capital funds.

The CNX Nifty is currently trading at 11650.60, up by 52.60 points or 0.45% after trading in a range of 11626.40 and 11666.40. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.80%, Indiabulls Housing up by 2.00%, Yes Bank up by 1.85%, Indusind Bank up by 1.75% and Larsen & Toubro up by 1.64%. On the flip side, Britannia down by 1.17%, Hero MotoCorp down by 0.84%, Dr. Reddys Lab down by 0.84%, Asian Paints down by 0.69% and Bharti Airtel down by 0.53% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 gained 94.41 points or 0.43% to 21,819.36, Straits Times rose 6.24 points or 0.19% to 3,322.45 and KOSPI was up by 1.74 points or 0.08% to 2,208.27. On the flip side, Jakarta Composite was down by 3.21 points or 0.05% to 6,491.42.