Firm trade persists after economic survey pegs FY20 GDP growth at 7%

Firm trade persisted on Dalal Street in late afternoon session, after the economic survey predicated 7% Gross Domestic Product (GDP) growth for FY20 on stable macro-economic conditions. Traders were positive with the United Nations Conference on Trade and Development’s (UNCTAD) annual World Investment Report (WIR), which found that Foreign Direct Investment (FDI) into Bahrain and India rose to $1.5 billion and $42 billion respectively in 2018. India's $42 billion also represented a 6% rise from the previous year, as well as the largest share of South Asia's $54 billion total.

On the global front, European markets were trading in red, as Hungary retail sales growth slowed to the weakest level in twenty-seven months in May. The data from the Hungarian Central Statistical Office showed that retail sales rose 2.6 percent year-on-year in May, which was slower than 7.3 percent in April. However, Asian markets were trading in green.

Back home, banking stocks were trading higher, as the Economic Survey 2018-19 said that the performance of banking sector has improved as bad loans declined in the last fiscal, but financial flows are constrained due to fall in money raised from capital markets and stress in the non-banking financial sector.

The BSE Sensex is currently trading at 39888.34, up by 49.09 points or 0.12% after trading in a range of 39858.33 and 39976.53. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.02%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were Telecom up by 1.61%, Realty up by 0.88%, Basic Materials up by 0.55%, Bankex up by 0.43% and Auto up by 0.41%, while Consumer Durables down by 1.43%, Metal down by 0.84%, Healthcare down by 0.37%, Utilities down by 0.14% and Capital Goods down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.43%, Bharti Airtel up by 2.42%, Tata Motors - DVR up by 2.25%, Indusind Bank up by 1.94% and Kotak Mahindra Bank up by 1.62%. On the flip side, Yes Bank down by 2.56%, Tata Steel down by 2.47%, HCL Tech. down by 1.33%, Sun Pharma down by 0.72% and HDFC Bank down by 0.68% were the top losers.

Meanwhile, in spite of positive growth of exports, India’s trade deficit widened with 25 major countries during last 3 years (2017-18 to 2018-19), mainly due to higher imports particularly of the petroleum crude and products electronic goods, iron and steel, chemicals and related products, coal, coke & briquettes, fertilizers, machinery and non- ferrous metals.

As per the commerce ministry data report, the trade deficit with Korea, Japan, Germany, Iraq and Saudi Arabia increased to $12 billion, $7.9 billion, $6.25 billion, $20.58 billion and $22.9 billion, respectively, in 2018-19.

Besides, during 2016-17, 2017-18 and 2018-19, Indian export increased 5.63%, 13.31% and 7.47%, respectively, while import surged by 3.14%, 21.41% and 9.68%, over the same three years. Meanwhile, as per Foreign Trade Policy 2015-20, the Government aims to increase India’s export of merchandise and services from $465.9 billion to approximately $900 billion by 2019-20 and to raise India’s share in world exports (Goods and Services) from 2% to 3.5%.

The CNX Nifty is currently trading at 11946.75, up by 30.00 points or 0.25% after trading in a range of 11923.65 and 11961.30. There were 30 stocks advancing against 19 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were UPL up by 7.09%, Indiabulls Housing Finance up by 2.97%, Tata Motors up by 2.83%, Bharti Airtel up by 2.55% and Indusind Bank up by 2.10%. On the flip side, Yes Bank down by 2.96%, Titan down by 2.94%, Tata Steel down by 2.37%, Bharti Infratel down by 1.15% and HCL Tech. down by 1.06% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 64.29 points or 0.3% to 21,702.45, Taiwan Weighted strengthened 32.13 points or 0.3% to 10,775.90, Jakarta Composite soared 17.30 points or 0.27% to 6,379.92, KOSPI rose 12.71 points or 0.61% to 2,108.73 and Straits Times advanced 6.45 points or 0.19% to 3,374.25. On the flip side, Shanghai Composite declined 20.66 points or 0.69% to 2,994.60 and Hang Seng decreased 30.13 points or 0.1% to 28,825.01.

European markets were trading mostly in red; FTSE lost 5.21 points or 0.07% to 7,604.11 and CAC fell 4.84 points or 0.09% to 5,613.97, while DAX was up 8.10 points or 0.06% to 12,624.34.