Benchmarks trade with traction in early deals

Indian equity benchmarks have made gap up opening and are trading with traction in early deals, tacking supportive global cues after the US and Mexico agreed to end their trade dispute. Sentiments remained upbeat with report that foreign investors have pumped in a net amount of Rs 7,095 crore into the Indian capital markets during the first week of June in anticipation of continued policy reforms. Some support also came with Trade Promotion Council of India’s (TPCI) statement that the government should take six concrete steps such as reducing cost and time of port clearance for goods and enhancing availability of credit with a view to boost exports. Traders took note of report that India pitched for promoting micro, small and medium enterprises (MSMEs) in developing countries as they are important for employment and income generation.

Global cues too remained supportive with all the Asian markets are trading in green at this point of time following signs of a reprieve in global trade tensions and the likelihood of lower US interest rates. The US markets ended higher on Friday as a disappointing jobs report for May raised investors' hopes that the Federal Reserve would cut interest rates.

Back home, power stocks edged higher as Power and New and Renewable Energy Minister Raj Kumar Singh exuded confidence that the renewable energy target of 175 gigawatt (GW) by 2022 would be achieved. However, aviation stocks were trading under pressure with the International Air Transport Association’s (IATA) chief Alexandre de Juniac’s statement that high costs, adverse conditions such as fluctuation in rupee against the US dollar and strong competition were putting pressure on the profitability of airlines.

The BSE Sensex is currently trading at 39890.13, up by 274.23 points or 0.69% after trading in a range of 39785.14 and 39979.48. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.46%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were IT up by 1.55%, TECK up by 1.39%, Metal up by 1.12%, Capital Goods up by 1.03% and Power was up by 1.01%, while Oil & Gas down by 0.47% was the lone losing indices on the BSE.

The top gainers on the Sensex were Tata Steel up by 2.04%, Yes Bank up by 2.00%, Power Grid Corporation up by 1.96%, TCS up by 1.87% and Infosys up by 1.61%. On the flip side, Kotak Mahindra Bank down by 0.88%, Mahindra & Mahindra down by 0.47%, Sun Pharma Industries down by 0.25%, ONGC down by 0.09% and HDFC down by 0.05% were the top losers.

Meanwhile, with a view to boost exports, Trade Promotion Council of India (TPCI) has said that the government should take six concrete steps such as reducing cost and time of port clearance for goods and enhancing availability of credit. Suggesting the six point agenda to push exports, TPCI said identifying new product basket which can easily find world market would have inherent advantage over India's global competitors. Besides, it asked for promotion of Indian products to new and emerging markets creating a national portal for global trade inquires and providing incentives to exporters based on their performances.

TPCI Chairman Mohit Singla has said that Indian port charges should be reduced as it make exports less competitive compared to rest of the world. India has one of the highest port charges, number of days for port clearance and delivery as compared to its major competitors. He added that the logistic cost per kilometer of road transport for India is high as compared to China, Bangladesh, Vietnam and Sri Lanka. While, the custom and port clearance takes six days for India, 1.5 days for China, six days for Vietnam and three days for Sri Lanka. He said availability of credit at competitive rates would significantly increase competitiveness.

Calling for external outreach and promotion of Indian products to new and emerging markets, Singla said, India could utilise 80 trade promotion offices for promotion of various products and brands. He added that in terms of products, processed food alone has huge scope after value addition and can fetch forex exchange. On phasing out subsidies for exports, he said, the government needs a cautious view to deal with this matter as the buyers also negotiate and demands some part of the subsidy. Since 2011-12, India's exports have been hovering at around $300 billion. During 2018-19, the shipments aggregated at $331 billion. Moreover, promoting exports helps a country to create jobs, boost manufacturing and earn more foreign exchange.

The CNX Nifty is currently trading at 11939.50, up by 68.85 points or 0.58% after trading in a range of 11926.85 and 11975.05. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Britannia Industries up by 1.99%, Tech Mahindra up by 1.96%, Tata Steel up by 1.89%, Power Grid Corporation up by 1.80% and Yes Bank up by 1.79%. On the flip side, BPCL down by 1.90%, Indian Oil Corporation down by 1.83%, Kotak Mahindra Bank down by 1.11%, UPL down by 0.98% and Mahindra & Mahindra down by 0.75% were the top losers.

All the Asian counters are trading in green; Nikkei 225 surged 219.35 points or 1.05% to 21,104.06, Straits Times jumped 25.47 points or 0.80% to 3,191.76, Hang Seng soared 548.08 points or 2.03% to 27,513.36, Taiwan Weighted increased 109.41 points or 1.05% to 10,518.61, KOSPI rose 18.13 points or 0.87% to 2,090.46, Jakarta Composite added 94.92 points or 1.53% to 6,304.04 and Shanghai Composite was up by 27.76 points or 0.98% to 2,855.56.