Local equities continue firm trade

Local equity benchmarks have gathered pace and continued their firm trade in morning session. High beta indices like Realty and BANKEX were, as usual, inched higher with the up-move on the benchmarks. Some support came with a report that India was the biggest recipient of funds from Asian Development Bank last year and would continue to get sovereign loans in excess of $3 billion in 2019 as well. The multilateral funding institution committed $3 billion in sovereign loans to India in 2018, the highest level of assistance since sovereign operations began in the country in 1986. However, gains remain capped with a report that the GDP growth may have touched 6.5% in the March quarter, against 6.6% in the previous quarter, and the slowdown in the economy in FY19 has been caused by declining growth of private consumption, tepid increase in fixed investment and muted export. Besides, Finance Ministry's monthly report showed 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.

On the global front, Asian markets were trading mixed, as investors took in the effects of comments by Fed Chairman Jerome Powell and the latest round of US-China trade talks. Back home, Finance Ministry’s monthly report showed that though easing of monetary policy has the potential to support growth, the recent cuts in repo rate are yet to transmit to weighted average lending rate of banks, thus the effects of the easing on investment activity are yet to manifest.

The BSE Sensex is currently trading at 39137.11, up by 155.68 points or 0.40% after trading in a range of 38961.76 and 39172.76. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.22%, while Small cap index down by 0.01%.

The top gaining sectoral indices on the BSE were Realty up by 1.34%, Telecom up by 1.11%, BANKEX up by 0.98%, Power up by 0.85%, PSU up by 0.72%, while IT down by 1.30%, TECK down by 0.99%, Metal down by 0.42%, Healthcare down by 0.35%, Basic Materials down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 2.47%, Kotak Mahindra Bank up by 1.89%, Tata Motors up by 1.71%, NTPC up by 1.65% and Bharti Airtel was up by 1.45%. On the flip side, HCL Tech. down by 2.46%, TCS down by 2.19%, Vedanta down by 1.28%, Tata Steel down by 1.15% and Hindustan Unilever was down by 1.06% were the top losers.

Meanwhile, ICRA, credit rating agency, has said air traffic growth hit 5-year low in last financial year (FY19) at 11.6 percent, pulled down by low growth of 3.9 percent in the March quarter as against a healthy 14.9 percent in the first three quarters. Cargo traffic growth also moderated in the year to 6 percent, as against double-digits growth witnessed over the past two years. The slowdown was mainly driven by the international cargo segment, which accounts for 62 percent of the total cargo traffic, and grew only 2.6 percent in FY19 as against 15.6 percent in FY18. However, domestic cargo traffic had a robust growth of 12 percent in FY19 up from 8.1 percent in FY18.

As per the rating agency, domestic passenger traffic declined by 1.1 percent in March, overall traffic saw de-growth of 0.1 percent in the month as international aircraft movement dipped by 1 percent while domestic aircraft movement was flat. De-growth in March was the first since February 2013.  The passenger traffic movement at the four key airports reported a sharp decline in March as travel demand in the Delhi and Mumbai airports de-grew 9.4 percent and 16.2 percent, respectively. Similarly, Chennai saw a 7.4 percent de-growth and Kochi de-grew by 11.3 percent in March.

The agency highlighted that between FY15 and FY18, the air traffic grew an annualized rate of 17.5 percent. But this has been arrested of FY19. This can impact revenue and margin of airports at a time when many of them are undertaking large capex. The decline in passenger traffic follows the increase in airfares due to lower number of flights owing to multiple issues.

The CNX Nifty is currently trading at 11759.45, up by 34.70 points or 0.30% after trading in a range of 11719.65 and 11768.25. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 1.91%, Tata Motors up by 1.69%, NTPC up by 1.69%, Bharti Airtel up by 1.63% and Bharti Infratel was up by 1.37%. On the flip side, HCL Tech down by 2.53%, TCS down by 2.32%, Tech Mahindra down by 1.51%, Wipro down by 1.41% and Grasim Industries was down by 1.31% were the top losers.

Asian markets were trading mixed; Jakarta Composite dropped 87.57 points or 1.37% to 6,286.85, Straits Times trembled 10.65 points or 0.31% to 3,382.68 and KOSPI was down by 14.68 points or 0.66% to 2,198.07.

On the other side, Taiwan Weighted strengthened 78.99 points or 0.72% to 11,083.48 and Hang Seng was up by 55.42 points or 0.19% to 29,999.60.