Indian equity benchmarks made an optimistic start and are trading in fine fettle in early deals on Friday, after a historic mandate won by the Narendra Modi government. Election commission data showed Modi’s National Democratic Alliance has secured around 350 seats, with BJP alone winning around 303 seats in the 2019 general election. Traders also took some support with Fitch Ratings’ statement that the Bharatiya Janata Party’s (BJP) apparent landslide victory is likely to improve business sentiment and outlook for private investment. It said that from a credit rating perspective, Fitch would focus on the extent of the next government's efforts to improve India's weak fiscal finances. Besides, India Inc has welcomed the thumping majority accorded to the BJP in Lok Sabha Elections 2019. At the same time, head honchos of the corporate world have called for strong economic reforms, including measures to boost the agrarian economy and manufacturing sector.
On the global front, Asian markets are trading mixed on Friday on worries the US-China trade spat was developing into a more entrenched strategic dispute between the world's two largest economies. The US markets declined on Thursday, with losses of over a percent, after the latest flare-up in US-China trade tensions damped investors’ expectations of a near-term resolution between the world’s two biggest economies.
Back home, aviation sector stocks remained in focus with ICRA’s report that the grounding of Jet Airways has impacted industry's capacity by as much as 14%, resulting in a 4.2% fall in domestic air traffic to 10.99 million in April. In scrip specific developments, Cipla gained on inking agreement to acquire 26% stake in AMPSolar Power Systems and Hindustan Copper surged on planning to increase borrowing limits.
The BSE Sensex is currently trading at 38982.08, up by 170.69 points or 0.44% after trading in a range of 38905.12 and 39223.85. There were 22 stocks advancing against 9 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index gained 0.45%, while Small cap index was up by 0.59%.
The top gaining sectoral indices on the BSE were Capital Goods up by 1.85%, Realty up by 1.58%, Telecom up by 1.39%, Industrials up by 1.35% and Bankex was up by 0.73%, while Consumer Durables down by 0.64% was the lone losing index on BSE.
The top gainers on the Sensex were Larsen & Toubro up by 2.40%, Bharti Airtel up by 1.92%, Mahindra & Mahindra up by 1.47%, Bajaj Finance up by 1.40% and Asian Paints up by 1.38%. On the flip side, ONGC down by 2.18%, Bajaj Auto down by 1.62%, NTPC down by 0.69%, Hindustan Unilever down by 0.69% and HCL Tech down by 0.55% were the top losers.
Meanwhile, expressing hope that India will continue with its fiscal consolidation plan, Moody’s Investors Service has said that its credit view on the country will depend on policies of the new government. As per the trend, Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) will form the government at the Centre for the second successive term with absolute majority.
The US-based rating agency said any credit implications of the outcome of India's general election will be determined by the policies adopted by the government in the next few years. These policies are yet to be formulated. It expects the broad push towards fiscal consolidation to remain, although with greater policy emphasis on supporting low incomes.
Moody’s had upped India's rating to ‘Baa2’ from ‘Baa3’ in 2017, changing outlook to ‘stable’ from ‘positive’, and said reforms would help stabilise rising levels of debt. Besides, deviating from the fiscal consolidation path as per the Fiscal Responsibility and Budget Management (FRBM) Act, the government in February's interim budget pegged the fiscal deficit for 2019-20 at 3.4% of Gross Domestic Product (GDP), as against the original target of 3.1%. The fiscal deficit was 3.4% of GDP in 2018-19.
The CNX Nifty is currently trading at 11706.15, up by 49.10 points or 0.42% after trading in a range of 11679.05 and 11775.55. There were 32 stocks advancing against 18 stocks declining on the index.
The top gainers on Nifty were Zee Entertainment up by 3.48%, Larsen & Toubro up by 2.32%, Bharti Airtel up by 1.98%, Indian Oil Corporation up by 1.75% and Bajaj Finance up by 1.66%. On the flip side, ONGC down by 2.41%, Titan Company down by 1.60%, Bajaj Auto down by 1.24%, Hindustan Unilever down by 1.17% and Adani Ports down by 1.01% were the top losers.
Asian markets are trading mixed: NIKKEI 225 dropped 97.50 points or 0.46% to 21,053.64, Straits Times shed 9.11 points or 0.29% to 3,151.61, KOSPI fell 18.32 points or 0.89% to 2,041.27 and Shanghai Composite was down by 1.12 points or 0.04% to 2,851.40.
On the flip side, Hang Seng gained 55.96 points or 0.21% to 27,323.09, Taiwan Weighted jumped 22.40 points or 0.22% to 10,330.77 and Jakarta Composite was up by 24.08 points or 0.40% to 6,056.78.
