Benchmarks trade with traction in early deals

Indian equity benchmarks despite cautious are trading with traction as traders took encouragement with the World Bank’s report stating that India's GDP growth is expected to accelerate moderately to 7.5 per cent in Fiscal Year 19-20, driven by continued investment strengthening, particularly private-improved export performance and resilient consumption. Data for the first three quarters suggest that growth has been broad-based. Industrial growth accelerated to 7.9 per cent, making up for a deceleration in services. Investors took note of a report that the Reserve Bank of India (RBI) has come out with guidelines for banks to set up new currency chests, which include minimum area of 1,500 square feet for strong room. Besides, the new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. For those situated in the hilly/ inaccessible places, capacity of 2.1 lakh pieces of banknotes per day.

Global cues too remained supportive with all the Asian markets are trading in green at this point of time as traders turned optimistic after a weak start. The US markets settled mostly higher on Monday, as investors geared up for a new earnings season.

Back home, auto stocks trade lower despite Society of Indian Automobile Manufacturers’ (SIAM) data showing that Indian automotive industry saw marginal increase of 5% at 26,267,783 units in financial year 2018-2019. The second half of last fiscal witnessed subdued growth across all segments. In scrip specific developments, VA Tech Wabag edged higher on incorporating new subsidiary company and Voltas rose on joining hands with Shima Seiki.

The BSE Sensex is currently trading at 38830.24, up by 129.71 points or 0.34% after trading in a range of 38620.09 and 38850.66. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.33%, while Small cap index was down by 0.23%.

The top gaining sectoral indices on the BSE were IT up by 0.85%, TECK up by 0.62%, Energy up by 0.61%, Capital Goods up by 0.46% and FMCG was up by 0.35%, while Telecom down by 1.00%, Realty down by 0.43%, Basic Materials down by 0.37%, Consumer Disc down by 0.33% and Consumer Durables was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 2.58%, Tata Motors up by 1.37%, Tata Motors - DVR up by 1.25%, Yes Bank up by 1.04% and ICICI Bank up by 1.01%. On the flip side, Asian Paints down by 1.89%, Bharti Airtel down by 1.64%, Bajaj Finance down by 0.77%, Tata Steel down by 0.74% and SBI down by 0.70% were the top losers.

Meanwhile, the World Bank in its latest report on South Asia has said that India's Gross Domestic Product (GDP) growth is expected to accelerate moderately to 7.5% in the fiscal year 2019-20 (FY20), supported by continued investment strengthening, particularly private-improved export performance and resilient consumption. It added that the real GDP growth is estimated at 7.2% in 2018-19. Its data for the first three quarters suggested that growth has been broad-based. Industrial growth accelerated to 7.9%, making up for a deceleration in services. Meanwhile, agriculture growth was robust at 4%.

On the demand side, the report has said that domestic consumption remained the primary growth driver, but gross fixed capital formation and exports both made growing contributions. Over the last quarter, growth is expected to remain balanced across sectors. Inflation dynamics have been subdued over most of FY19. Besides, with robust growth, and food prices poised to recover, inflation is expected to converge towards 4% and added that both the current account and the fiscal deficit are expected to narrow.

On the external front, World Bank has said improvements in India’s export performance and low oil prices should bring about a reduction in the current account deficit to 1.9% of the GDP. On the internal front, the consolidated fiscal deficit is projected to decline, albeit slowly (to 6.2 and 6% of the GDP in FY20 and FY21, respectively). As the Centre’s deficit is budgeted to remain unchanged at 3.4% of GDP in FY19/20, the burden of adjustment will rest on the states. It noted that a sustained decline in food prices since July 2018, subsequently complemented by the softening of oil prices and concomitant appreciation of the rupee, has led to a steady decline in inflation.

The CNX Nifty is currently trading at 11632.60, up by 28.10 points or 0.24% after trading in a range of 11574.15 and 11638.25. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 2.54%, Wipro up by 2.43%, Tata Motors up by 1.50%, Zee Entertainment up by 1.49% and Yes Bank up by 1.17%. On the flip side, Indiabulls Housing down by 2.66%, Bharti Airtel down by 2.24%, Asian Paints down by 1.84%, GAIL India down by 1.08% and Adani Ports & SEZ down by 0.92% were the top losers.

All the Asian markets are trading in green; KOSPI rose 7.28 points or 0.33% to 2,217.88, Shanghai Composite gained 4.39 points or 0.14% to 3,249.20, Straits Times advanced 5.44 points or 0.16% to 3,320.86, Nikkei 225 surged 16.36 points or 0.08% to 21,778.01, Jakarta Composite soared 52.22 points or 0.81% to 6,477.95, Taiwan Weighted strengthened 22.22 points or 0.21% to 10,822.79 and Hang Seng was up by 92.17 points or 0.31% to 30,169.32.