Benchmarks trade with marginal gains in early deals

Indian equity benchmarks are trading with marginal gains in early deals lifted by oil marketing companies (OMCs) and financial stocks. However, gains remain capped with the Finance Ministry’s monthly report stating that India’s economy slowed down slightly in the last fiscal due to declining growth in private consumption, slow increase in fixed investment and muted exports though it is still fastest growing major economy. It further said there is slowdown of growth in agriculture and sustained growth in industry as well as some challenges. Meanwhile, the Insolvency and Bankruptcy Board of India (IBBI) data showed that the 12 large non-performing assets (NPAs or bad loans) accounts directed by the RBI for resolution through insolvency process had total outstanding of Rs 3.45 lakh crore against their liquidation value of Rs 73,220.23 crore, while haircuts taken by creditors in case of the resolved accounts so far have been as high as 90%.

On the global front, Asian markets are trading mostly in red at this point of time amid thin holiday trade as investors pared expectations for a US rate cut this year, while oil prices loitered near one-month lows on oversupply fears. The US markets ended lower on Thursday for a second straight session, with weakness in petroleum-linked shares dragging the markets further below records earlier in the week.

Back home, aviation sector stocks edged higher despite ICRA’s report that the pace of growth in air traffic hit a five-year low at 11.6% in fiscal 2019, pulled down by low growth of 3.9% in the March quarter as against a healthy 14.9% in the first three quarters. The gems and jewellery industry stocks remained in focus with the World Gold Council’s statement that India’s gold demand is expected to rise in the June quarter from a year ago due to a higher number of auspicious days for weddings and a fall in local prices ahead of a key festival.

The BSE Sensex is currently trading at 39072.81, up by 91.38 points or 0.23% after trading in a range of 38961.76 and 39123.85. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.05%, while Small cap index was up by 0.23%.

The top gaining sectoral indices on the BSE were Telecom up by 1.78%, Realty up by 1.06%, Auto up by 0.86%, Power up by 0.82% and Oil & Gas was up by 0.76%, while IT down by 1.61%, TECK down by 1.18%, FMCG down by 0.57%, Healthcare down by 0.17% and Metal was down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 3.13%, Tata Motors up by 2.66%, Bharti Airtel up by 1.99%, Maruti Suzuki up by 1.59% and Power Grid Corporation up by 1.26%. On the flip side, HCL Tech. down by 2.34%, TCS down by 2.24%, Yes Bank down by 1.29%, Infosys down by 1.08% and Hindustan Unilever down by 0.95% were the top losers.

Meanwhile, the Finance Ministry in its monthly economic report for March has said that Indian economy slowed down slightly in the fiscal year 2018-19 (FY19), though it is still fastest growing major economy. The proximate factors responsible for this slowdown include declining growth of private consumption, tepid increase in fixed investment, and muted exports. It further says there is slowdown of growth in agriculture and sustained growth in industry as well as some challenges.

The Ministry said the Headline inflation - measured using the consumer and wholesale price indices - declined in 2018-19 though inflation has firmed up slightly in recent months. The current account deficit, as percentage of the GDP, improved in Q3 and is set to further improve in Q4 of 2018-19 as the dip in imports has improved the merchandise trade deficit. In line with declining real GDP growth, private consumption in Q4 of 2018-19 has also declined as reflected in the drop of growth of two-wheeler sales towards the end of the year. On the external front, the report said that the current account deficit as ratio to GDP is set to fall in Q4 of 2018-19, which will limit the leakage of growth impulse from the economy.

The monthly report said the fiscal deficit of the Central government has been gliding down to the FRBM target. Monetary policy has attempted to provide a fillip to the growth impulse through cuts in repo rate and easing of bank liquidity. The room for this monetary easing has been created by low inflation in 2018-19, although it has started to inch up in last few months of the year. The real effective exchange rate has appreciated in Q4 of 2018-19 and could pose challenges to the revival of exports in the near future. Increase in foreign exchange reserves in Q4 of 2018-19 on account of improvement in trade balance has increased the import cover for the economy. It also pointed out that while Gross Fiscal Deficit of the Centre has steadily declined in last few years, capital expenditure has been volatile.

The CNX Nifty is currently trading at 11738.40, up by 13.65 points or 0.12% after trading in a range of 11719.65 and 11759.95. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.46%, Tata Motors up by 2.34%, Bharti Airtel up by 2.33%, ONGC up by 1.42% and Maruti Suzuki up by 1.31%. On the flip side, HCL Tech down by 2.46%, Tech Mahindra down by 2.33%, TCS down by 2.21%, Britannia Industries down by 2.01% and Wipro down by 1.24% were the top losers.

Asian markets are trading mostly in red; Straits Times shed 10.37 points or 0.31% to 3,382.96, Hang Seng slipped 6.45 points or 0.02% to 29,937.73, KOSPI declined 13.63 points or 0.62% to 2,199.12 and Jakarta Composite was down by 84.77 points or 1.33% to 6,289.65. On the flip side, Taiwan Weighted was up by 69.49 points or 0.63% to 11,073.98.