Indices trim gains but continue to trade in green

Indian equities trimmed most of their gains but continued to trade in green in the afternoon session, as early trends indicating Prime Minister Narendra Modi-led National Democratic Alliance (NDA) coming back to power. The indices remained in green with India Inc expressing hope that a stable government at the centre will boost growth in the country and lead to higher foreign fund inflows as trends pointed to BJP and allies returning to power with a thumping majority. Some support also came with a report that finance ministry has begun the pre-Budget consultation exercise with industry bodies in the run-up to the full budget for the current financial year to be unveiled by the new government sometime in July. However, some gains were trimmed as traders remained worried with private report stating that the value of merger and acquisition deals announced in April stood at $735 million (over Rs 5,100 crore), a decline of 96% from $19,142 million in the year-ago period.

On the global front, Asian markets were trading mostly in red, as traders focused on tensions between the U.S. and China and braced for the impact of their tariff hikes. Back home, the BSE Sensex is currently trading at 39393.14, up by 282.93 points or 0.72% after trading in a range of 39369.30 and 40124.96. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.44%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.07%, PSU up by 1.92%, Energy up by 1.78%, Bankex up by 1.78% and Power was up by 1.68%, while FMCG down by 1.09%, Consumer Durables down by 0.36% and IT was down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 5.45%, Yes Bank up by 4.68%, Larsen & Toubro up by 3.45%, SBI up by 3.32% and ICICI Bank was up by 2.65%. On the flip side, ITC down by 2.65%, Vedanta down by 1.68%, HDFC Bank down by 0.89%, TCS down by 0.85% and Tata Motors - DVR was down by 0.76% were the top losers.

Meanwhile, the think tank's Vice Chairman Rajiv Kumar has said that Niti Aayog is working on the economic agenda for the next government where the emphasis will be on achieving long term sustainable growth and boosting private investments in India. He said “the basic thing is that we need to take steps to increase private investments in the economy. That's a real issue and to increase the private investment, it requires greater access to credit for small and medium enterprises (SMEs).'

According to him, the economic agenda might also pitch for extending labour subsidies to textile and leather sectors to reduce cost of production. He also said that cost of capital in India is quite high, which needs to be brought down, and there is also a need to create a land bank owned by public sector undertakings so that private investment can be attracted.

Highlighting that India could potentially hit double-digit growth rates by 2022, Kumar said a good foundation for such a trajectory has already been laid in the previous five years. He also observed that during this period, there has been unprecedented macro stability as well as an average annual growth of 7 percent growth. Noting that the government has done enough in last five years to be now ready to take that few steps to ramp up growth to 9 percent, he said 'I think, that by fiscal 2022, we should be able to get there (double digit growth).' For the current fiscal ending March 2020, he expects Indian economy to record a growth of around 7 percent.

The CNX Nifty is currently trading at 11828.00, up by 90.10 points or 0.77% after trading in a range of 11819.65 and 12041.15. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Adani Ports &SEZ up by 6.50%, Zee Entertainment up by 5.11%, Indusind Bank up by 4.98%, Yes Bank up by 4.83% and BPCL was up by 3.83%. On the flip side, ITC down by 2.70%, Eicher Motors down by 2.02%, Vedanta down by 1.59%, Hindalco down by 1.46% and HDFC Bank was down by 1.11% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 499.03 points or 1.8% to 27,206.91, Taiwan Weighted dropped 148.85 points or 1.42% to 10,308.37, Nikkei 225 slipped 132.23 points or 0.62% to 21,151.14, Shanghai Composite declined 38.36 points or 1.33% to 2,853.34, Straits Times trembled 20.70 points or 0.65% to 3,162.44 and KOSPI fell 5.27 points or 0.26% to 2,059.59.

On the flip side, Jakarta Composite soared 101.92 points or 1.72% to 6,041.56.