Benchmarks trade flat in early deals

Indian equity benchmarks made a cautious start and are trading flat in early deals on Wednesday amid growth concerns after the International Monetary Fund (IMF) lowered Gross Domestic Product (GDP) outlook for India as well as the global economy. The IMF has moderately scaled down India’s economic growth projection to 7.3 per cent for the current financial year from its earlier forecast of 7.4 per cent and suggested that the country should continue to undertake economic reforms, including hire and fire, to create jobs. Traders also remain concerned with the finance ministry’s statement that the government has fallen short of Rs 50,000 crore in its direct tax collection target of Rs 12 lakh crore for 2018-19. However, market participants got some solace with report that the government has managed to meet the revised fiscal deficit target of 3.4 percent of the GDP after it cut last minute expenditure and rolled over fuel subsidies to make up for the shortfall in tax collection.

On the global front, Asian markets are trading mostly in red at this point of time after renewed concern about a global economic slowdown and an escalation in trade tensions. The US markets declined on Tuesday as investors with expectations of the first quarterly drop in earnings since 2016 were jolted by President Donald Trump's $11 billion trade salvo against the European Union and as the International Monetary Fund (IMF) cut its global growth forecast for the third time in six months.

Back home, markets regulator SEBI has streamlined the procedure for issuing certified copies of orders and circulars to the parties involved and other applicants. For the parties involved in the proceedings, the regulator said certified copies of the orders passed by SEBI will be provided without charging any fee. In scrip specific developments, Tata Motors surged as JLR commenced booking for Range Rover Velar and Usha Martin edged higher on completing sale of steel business to Tata Sponge Iron.

The BSE Sensex is currently trading at 38925.60, down by 13.62 points or 0.03% after trading in a range of 38851.77 and 38943.10. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.26%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Realty up by 2.10%, Energy up by 0.82%, Oil & Gas up by 0.62%, Telecom up by 0.57% and PSU was up by 0.47%, while IT down by 0.42%, TECK down by 0.28% and Auto was down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.40%, Coal India up by 1.26%, Kotak Mahindra Bank up by 1.14%, Tata Motors - DVR up by 0.96% and Mahindra & Mahindra was up by 0.87%. On the flip side, TCS down by 1.20%, Hero MotoCorp down by 1.05%, HCL Tech down by 1.02%, HDFC down by 0.82% and HDFC Bank was down by 0.65% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) has projected India’s growth rate at 7.3% in 2019 and 7.5% in 2020, supported by the continued recovery of investment and robust consumption amid a more expansionary stance of monetary policy and some expected impetus from fiscal policy, thus remaining the fastest growing major economy of the world. Though, growth forecast have been revised downward compared with the October 2018 WEO by 0.1 percentage point for 2019 and 0.2 percentage point for 2020, respectively, amid the recent revision to the national account statistics that indicated somewhat softer underlying momentum.

The report stated that growth in India is expected to stabilise at just under 7% over the medium term, based on continued implementation of structural reforms and easing of infrastructure bottlenecks. It believes that in India, continued implementation of structural and financial sector reforms with efforts to reduce public debt remain essential to secure the economy's growth prospects. In the near term, continued fiscal consolidation is needed to bring down India's elevated public debt. This should be supported by strengthening goods and services tax compliance and further reducing subsidies.

IMF noted that important steps have been taken to strengthen financial sector balance sheets, including through accelerated resolution of non-performing assets under a simplified bankruptcy framework. These efforts should be reinforced by enhancing governance of public sector banks. Reforms to hiring and dismissal regulations would help incentivise job creation and absorb the country's large demographic dividend; efforts should also be enhanced on land reform to facilitate and expedite infrastructure development. Besides, in 2018, the country’s growth rate was 7.1%, as against China's 6.6%. In 2019, it has projected a growth rate of 6.3% for China and 6.1% in 2020.

The CNX Nifty is currently trading at 11679.10, up by 7.15 points or 0.06% after trading in a range of 11638.65 and 11680.05. There were 33 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.56%, Kotak Mahindra Bank up by 1.38%, Tata Motors up by 1.38%, Coal India up by 1.36% and Indiabulls Housing was up by 1.32%. On the flip side, TCS down by 1.63%, Hindalco down by 1.31%, HCL Tech. down by 1.03%, Hero MotoCorp down by 0.90% and HDFC Bank was down by 0.61% were the top losers.

The Asian markets are trading mostly in red;  Shanghai Composite declined 12.73 points or 0.39% to 3,226.93, Jakarta Composite dropped 17.58 points or 0.27% to 6,466.77, Taiwan Weighted dropped 22.49 points or 0.21% to 10,829.11, Hang Seng decreased 125.94 points or 0.42% to 30,031.55 and Nikkei 225 was down by 142.68 points or 0.65% to 21,659.91. On the flip side, KOSPI gained 3.60 points or 0.16% to 2,217.16 and Straits Times was up by 2.36 points or 0.07% to 3,327.96.