Markets trade at all-time highs; Nifty surpasses 11,800

Extending their last session jubilation, Indian equity benchmarks have made a positive start to trade at record highs in early deals on Tuesday, with frontline gauges surpassed their crucial 39,400 (Sensex) and 11,800 (Nifty) levels. Traders remained optimistic with IHS Markit report stating that India’s economic policy will continue to focus on maintaining strong economic growth and creating jobs for the country’s large and growing population. It added that the government will also focus on the expansion of already announced policies including infrastructure investment, the Goods and Services Tax (GST) rationalisation and financial sector regulations. Meanwhile, the Food Safety and Standards Authority (FSSAI) has permitted small organic producers, having an annual turnover of over Rs 12 lakh, to sell their produce directly to end consumers without certification till April 2020, but will not be able to use Jaivik Bharat logo on their products. However, gains remain capped with report that rising trade tensions have prompted the World Trade Organization (WTO) to dim its prospect for trade growth in the second quarter of the 2019 calendar year. The WTO said world trade growth is likely to remain weak into the second quarter of 2019.

On the global front, the US markets ended in red territory on Monday as souring US-China trade relations continued to weigh on sentiment, with selling pressure in technology stocks weighted on markets. However, Asian markets are trading mostly higher despite news that the U.S. Commerce Department has temporarily eased some restrictions imposed on Chinese telecom giant Huawei Technologies in order to maintain the company's existing networks around the world. The rollback will be in effect for 90 days, starting on Monday.

Back home, SEBI came out with a framework for Innovation Sandbox that will help provide financial technology firms and unregulated market participants an environment to test their new solutions with markets data. In scrip specific developments, Glenmark surged with arm receiving ANDA approval for Solifenacin Succinate Tablets and Panacea Biotec shined on receiving USFDA’s approval for Azacitidine Injection.

The BSE Sensex is currently trading at 39419.34, up by 66.67 points or 0.17% after trading in a range of 39328.26 and 39571.73. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped by 0.22%, while Small cap index was down by 0.02%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.27%, Energy up by 0.47%, FMCG up by 0.28% and Consumer Durables was up by 0.14%, while Auto down by 1.15%, PSU down by 0.99%, Metal down by 0.89%, Oil & Gas down by 0.84% and Industrials was down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.30%, Bajaj Finance up by 2.21%, Sun Pharma Industries up by 1.30%, Reliance Industries up by 1.21% and Coal India was up by 0.80%. On the flip side, Tata Motors down by 5.37%, Tata Motors - DVR down by 4.45%, Yes Bank down by 3.17%, Bharti Airtel down by 1.63% and Tata Steel was down by 1.60% were the top losers.

Meanwhile, Alyssa Ayres from the Council on Foreign Relations think tank has believed that the next Indian government to be formed after the declaration of the election results on May 23 faces crucial foreign policy decisions, particularly in the economic realm. She said ‘No matter who forms the next government, India faces crucial foreign policy decisions particularly in the economic realm’.

Ayres said although the US-India relationship has made solid strides across governments in defence and security, there are increased tensions on the trade and economic front. She added that ‘I would also expect to see increased attention in the United States (particularly among members of Congress) to issues of religious freedom in India, especially given the tenor of the elections these past few weeks’.

The senior fellow at the Carnegie Endowment for International Peace Ashley Tellis has stated that Prime Minister Narendra Modi, who the exit polls predicted to be reelected, will have to confront serious external challenges both around India's periphery and farther beyond. He said if India is to realise its great power ambitions in the decades to come, the next government will have to accelerate economic reforms domestically, strengthen India's institutions, preserve its constitutional ethos and protect the nation's internal cohesion, all of which have floundered dangerously in recent years.

The CNX Nifty is currently trading at 11848.35, up by 20.10 points or 0.17% after trading in a range of 11811.70 and 11883.55. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 4.11%, Bharti Infratel up by 2.82%, HDFC up by 2.21%, Bajaj Finance up by 2.03% and Indiabulls Housing was up by 1.77%. On the flip side, Tata Motors down by 4.50%, BPCL down by 3.60%, Yes Bank down by 2.86%, Tata Steel down by 2.11% and Hindalco was down by 1.86% were the top losers.

Asian Markets are mostly trading in green; Taiwan Weighted strengthened 71.87 points or 0.69% to 10,470.28, Jakarta Composite soared 66.38 points or 1.12% to 5,973.50, Hang Seng increased 61.18 points or 0.22% to 27,848.79, Shanghai Composite gained 43.62 points or 1.52% to 2,914.22 and KOSPI was up by 19.28 points or 0.94% to 2,074.99. On the flip side, Nikkei 225 slipped 3.56 points or 0.02% to 21,298.17 and Straits Times was down by 12.10 points or 0.38% to 3,193.36.