Indian equities remain in green terrain

Indian equity benchmarks continued their trade in green territory in afternoon session, on buying by funds and retail investors. Sentiments remained positive 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. Moreover, the appreciating rupee against the US dollar along with encouraging earnings by some blue-chip firms too supported the markets. However, further gains got restricted as anxiety remained among the local traders with data compiled by the Centre for Monitoring Indian Economy (CMIE) indicating that India's unemployment rate in April rose to 7.6 percent, the highest since October 2016, and up from 6.71 percent in March.

On the global front, Asian markets were trading mixed amid thin holiday trade and as investors awaited the release of key U.S. jobs data and other directional cues. Back home, the BSE Sensex is currently trading at 39077.56, up by 96.13 points or 0.25% 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 fell 0.07%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were Realty up by 1.48%, Telecom up by 1.37%, Bankex up by 0.95%, Power up by 0.79% and Auto was up by 0.77%, while IT down by 1.52%, TECK down by 1.15%, Healthcare down by 0.40%, FMCG down by 0.28% and Basic Materials was down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 2.67%, Tata Motors up by 2.05%, NTPC up by 1.65%, Bharti Airtel up by 1.62% and Kotak Mahindra Bank was up by 1.32%. On the flip side, TCS down by 2.68%, HCL Technologies down by 2.23%, Hindustan Unilever down by 1.66%, Tata Steel down by 0.91% and Infosys was down by 0.60% were the top losers.

Meanwhile, the Finance Ministry in its monthly report for March said that though easing of monetary policy has the potential to support growth, the recent cuts in the key short-term lending rate, or repo rate by 25 basis points each in February and April are yet to transmit to weighted average lending rate (WALR) of banks. Therefore, it said the effects of easing on investment activity are yet to manifest.

According to the report, credit growth could have been challenged by continuous tightening of bank liquidity causing the call money market rates to trend up since Q1 (April-June) of 2018-19, however, some relief is evident in Q4FY19. It also said that nominal exchange rate has been appreciating in Q3 of 2018-19, yet the net flow of portfolio investment remained negative. It added that the real effective exchange rate has appreciated in the Q4 of 2018-19 and could pose challenges to the revival of exports in the near future.

The monthly report further said that India’s foreign exchange reserves in terms of months of import cover have dropped from 14 months from April 2016 to 9 months in October 2018. However, it noted that the import cover has been increasing since then. It also explained that not only do fuel and food inflation directly drive the Consumer Price Index (CPI) headline inflation, they do so indirectly as well by spilling over into other sectors of the economy as captured by core inflation.

The CNX Nifty is currently trading at 11745.50, up by 20.75 points or 0.18% after trading in a range of 11719.65 and 11768.25. There were 31 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.09%, Tata Motors up by 1.88%, NTPC up by 1.88%, Bharti Airtel up by 1.80% and Kotak Mahindra Bank was up by 1.43%. On the flip side, TCS down by 2.82%, HCL Technologies down by 2.34%, Britannia Industries down by 1.69%, Tech Mahindra down by 1.54% and Hindustan Unilever was down by 1.48% were the top losers.

Asian markets were trading mixed; Taiwan Weighted strengthened 91.81 points or 0.83% to 11,096.30, Hang Seng increased 83.37 points or 0.28% to 30,027.55 and Straits Times advanced 2.22 points or 0.07% to 3,395.55.

On the flip side, KOSPI fell 16.43 points or 0.74% to 2,196.32 and Jakarta Composite dropped 87.57 points or 1.37% to 6,286.85.