Benchmarks manage to trade above neutral lines in morning deals

Indian equity markets have made a cautious start and are trading marginally above their neutral lines tracking weak cues from Asian peers. Traders took some support with IMF’s statement that some reforms in India have shown the benefits of digitalization which has also reduced the opportunities for discretion and fraud. However, gains remain capped as traders stayed on sidelines ahead of the first phase of general elections start today. Also, there was some cautiousness with Federation of Indian Export Organisations’ (FIEO) statement that rising protectionism, fluctuation in commodity prices and inadequate availability of liquidity are the three major challenges, which exporters will face in the coming months.

On the global front, most of the Asian counters are trading in red at this point of time on expectations of global interest rates will stay lower for longer after a dovish turn by the European Central Bank and milder than expected US inflation. The US markets ended higher on Wednesday after Federal Reserve meeting minutes suggested no shift in the central bank's dovish tilt.

Back home, pharma sector stocks remained buzzing with report that the pharma industry will have to wait for the return of double-digit growth as the industry is expected to witness a moderate growth of 8 to 10 per cent till FY21. The pricing pressure in the US generic market will continue to be a concern for the industry. Agriculture sector stocks remained in focus with the Agricultural and Processed Food Products Export Development Authority’s (APEDA) data showing data the country's exports of agricultural and processed food products have dipped by 2.27 per cent to $16.27 billion during the April-February period of 2018-19, on account of contraction in shipments of buffalo meat, wheat and non-basmati rice.

The BSE Sensex is currently trading at 38615.87, up by 30.52 points or 0.08% after trading in a range of 38551.11 and 38649.42. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.01%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Telecom up by 0.99%, Oil & Gas up by 0.84%, Energy up by 0.42%, FMCG up by 0.40% and Utilities was up by 0.36%, while Metal down by 0.51%, Bankex down by 0.31%, IT down by 0.14%, Basic Materials down by 0.07% and Healthcare was down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.79%, Asian Paints up by 1.21%, Mahindra & Mahindra up by 1.08%, Hindustan Unilever up by 1.06% and Bajaj Auto was up by 0.67%. On the flip side, Vedanta down by 1.83%, Sun Pharma down by 0.95%, Kotak Mahindra Bank down by 0.93%, Infosys down by 0.80% and Yes Bank was down by 0.78% were the top losers.

Meanwhile, listing out challenges to be faced by exporters, Federation of Indian Export Organisations (FIEO) has said that rising protectionism, fluctuation in commodity prices and inadequate availability of liquidity are the three major challenges, which exporters will face in the coming months. It added the World Trade Organization (WTO) has already cautioned that the global trade growth is expected to be lower in 2019 than it was last year.

FIEO Director General Ajay Sahai has said that protectionism will continue to rise and it will impact global demand for goods. He said that the other two challenges include fluctuation in commodity prices and inadequate availability of credit as banks are not coming forward to lend exporters. He said ‘These challenges would impact India’s exports, so we need to gear up for this’.

Suggesting measures to resolve the issue, he said timely support by the government would help deal with these issues. He also suggested the banks to follow online procedure for credit lending as it will ease the processes. The WTO had in its preliminary estimates predicted a 3.7 per cent expansion of global trade for this year, but has revised that down to 2.6 per cent.

Sahai further said that as per the current growth rate, India’s merchandise exports will touch $330 billion in 2018-19. During the April-February period of 2018-19, exports grew 8.85 per cent to $298.47 billion, while imports rose by 9.75 per cent to $464 billion. During 2017-18, the overseas shipments grew by about 10 per cent to $303 billion and in 2013-14, it aggregated at about $315 billion. Promoting exports helps a country to create jobs, boost manufacturing and earn more foreign exchange.

The CNX Nifty is currently trading at 11593.25, up by 8.95 points or 0.08% after trading in a range of 11575.35 and 11604.20. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 2.14%, Bharti Airtel up by 1.68%, Asian Paints up by 1.43%, BPCL up by 1.31% and GAIL India was up by 1.13%. On the flip side, Vedanta down by 1.94%, Adani Ports & SEZ down by 1.02%, Sun Pharma down by 0.99%, Kotak Mahindra Bank down by 0.88% and Zee Entertainment was down by 0.79% were the top losers.

The Asian markets are trading mostly in red; Hang Seng dropped 278.55 points or 0.92% to 29,841.01, Taiwan Weighted dropped 61.33 points or 0.56% to 10,806.81, Jakarta Composite decreased 46.38 points or 0.72% to 6,431.95, Shanghai Composite declined 44.04 points or 1.36% to 3,197.89, Nikkei 225 slipped 5.32 points or 0.02% to 21,682.25 and KOSPI was down 0.80 points or 0.04% to 2,223.59. On the other side, Straits Times was up 7.41 points or 0.22% to 3,335.06.