Local equities wipe out early losses to turn positive

Local equity benchmarks have wiped out all of their early losses and entered into positive trajectory with frontline gauges recapturing their crucial 11,850 (Nifty) and 39,500 (Sensex) levels. High beta indices like Realty and Metal were, as usual, inched higher with the up-move on the benchmarks. Sentiments turned optimistic with a report that Indian economy is expected to grow 7.3% in 2019 and 7.5% in 2020. The recent manufacturing indicators point to a tentative rebound in Asian and Latin American countries except India. Traders took some support with a report that the Prime Minister’s Office (PMO) has asked all the government departments to submit their action plans for first 100 days and for the full five years with clearly defined measurable outcomes by mid-June. Traders took note of Governor Shaktikanta Das’ statement that the Reserve Bank expects the government to continue to be ‘broadly’ prudent on the fiscal side. He added, the government has broadly maintained the fiscal deficit glide path and we expect it to remain broadly fiscally prudent going forward. However, gains remained capped with a private report that a marked slowdown in Asia’s third-largest economy pushed growth concerns to the top of the Reserve Bank of India’s agenda, suggesting more policy easing will follow its third interest-rate cut of the year.

On the global front, Asian markets are trading in green, following positive developments overnight on US-Mexico negotiations, while investors digested recent comments from major central bank chiefs. Back home, a report stated that electricity produced by conventional power plants in May recorded a rise of 5.1% year-on-year (y-o-y), thanks to a surge in demand stemming from poll-related activities in the scorching summer.

The BSE Sensex is currently trading at 39567.00, up by 37.28 points or 0.09% after trading in a range of 39279.47 and 39666.63. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.11%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Realty up by 1.05%, Metal up by 0.64%, Telecom up by 0.57%, Basic Materials up by 0.55% and Capital Goods was up by 0.55%, while Healthcare down by 0.55%, Energy down by 0.49%, Oil & Gas down by 0.22%, FMCG down by 0.21% and Utilities was down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 2.39%, IndusInd Bank up by 1.96%, Tata Motors - DVR up by 1.04%, SBI up by 0.99% and Mahindra & Mahindra was up by 0.90%. On the flip side, Reliance Industries down by 0.72%, TCS down by 0.59%, Sun Pharma down by 0.58%, ONGC down by 0.53% and Coal India was down by 0.45% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has urged industry representatives and exports bodies to stop depending on government subsidies and instead focus on becoming more competitive and self-reliant. He also said 'I do not think that any programme or ambitious scheme can run only on subsidies and government help. We have to move out of this continuous effort and demand and make our industry truly competitive and self-reliant.' He also highlighted on the need to increase strengths of the industry as it would help in boosting manufacturing and exports.

According to the minister, accepting strengths would help in achieving the target of reaching $1 trillion exports in merchandise and $1 trillion in services in the next five years and also become an internationally integrated economy. He noted that industry and other stakeholders need to collectively work and use available tools to make logistics and industrial growth competitive. He added 'I understand that there are issues where we are not as competitive as compared to other countries. Let us go to the root of those problems and sort out those issues.'

Goyal further stated that there is a need to integrate with the world economy which will eventually help the Indian industry. He also said 'Let us look at the next five years as one more way, one more new trend that we observe in this country, one more effort that we make to engage with the world on equal terms and not from the position of weakness but from a position of strength. Let us leverage our competitive advantages.'

The CNX Nifty is currently trading at 11854.10, up by 10.35 points or 0.09% after trading in a range of 11769.50 and 11887.35. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 2.63%, Vedanta up by 1.99%, Bharti Infratel up by 1.96%, IndusInd Bank up by 1.59% and Bajaj Finserv was up by 1.12%. On the flip side, Dr. Reddys Lab down by 2.53%, Cipla down by 1.85%, Britannia down by 0.99%, Zee Entertainment down by 0.98% and Reliance Industries was down by 0.90% were the top losers.

Asian markets are trading in green; Nikkei 225 surged 119.62 points or 0.58% to 20,893.66, Straits Times advanced 12.10 points or 0.38% to 3,158.28 and KOSPI was up by 3.13 points or 0.15% to 2,072.24.