Domestic indices continue to trade in green in late morning deals

Domestic equity markets continued to trade in green in late morning deals on account of buying in Bharti Airtel, Titan, Asian Paints, Tata Steel and Ultratech Cement companies’ stocks. Meanwhile, broader indices outperformed their large peers with Mid cap index and Small cap index gaining in the range of 0.55-0.65%. Traders remained positive after the Federal Reserve's policy meeting minutes which indicated a strong likelihood of a rate cut by the U.S. central bank next month. Falling crude oil prices also supported domestic sentiments. Further, sentiments also got boost as Commerce and Industry Minister Piyush Goyal said there is a huge potential to increase economic cooperation between India and Africa as both regions can look at doubling two-way trade to $200 billion in the next seven years.

On the global front, Asian markets were trading mixed as investors assess business activity data from the region. The Bank of Korea (BOK) has held its benchmark interest rate at 3.5%, in line with expectations. The BOK noted in its release that inflation in South Korea has continued its downward trend, although it did point out that there was a need to monitor real estate prices and household debt. Back home, on the BSE sectoral front, traders were seen pilling up positions in Telecom, Basic Materials, Consumer Durables, TECK and FMCG, while selling was witnessed in Power, Utilities and Energy. 

The BSE Sensex is currently trading at 81079.21, up by 173.91 points or 0.21% after trading in a range of 80954.02 and 81236.45. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.58%, while Small cap index up by 0.62%.

The top gaining sectoral indices on the BSE were Telecom up by 1.72%, Basic Materials up by 0.92%, Consumer Durables up by 0.82%, TECK up by 0.64%, FMCG up by 0.53%, while Power down by 0.52%, Utilities down by 0.50% and Energy down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.36%, Titan up by 1.11%, Asian Paints up by 1.11%, Tata Steel up by 1.05% and Ultratech Cement up by 0.85%. On the flip side, NTPC down by 0.89%, Power Grid down by 0.80%, Tata Motors down by 0.78%, Mahindra & Mahindra down by 0.57% and TCS down by 0.53% were the top losers.

Meanwhile, Executive director at the International Monetary Fund (IMF) Krishnamurthy Subramanian has said that the size of the Indian economy has the potential to touch $55 trillion by 2047 if the growth rate in dollar terms remains at 12 per cent. He also said that inflation targeting since 2016 had helped the country average out the rate of price rise to 5 per cent. Before 2016, the average rate of inflation was 7.5 per cent. 

Subramanian stated that with a real growth of 8 per cent, the nominal growth is expected to be 13 per cent with 5 per cent inflation rate. With rate of depreciation of the Indian currency to be less than 1 per cent vis-a-vis the dollar in the long run, the fundamentals of the economy will start to show up. In this context, he said that the real growth rate of India will be 12 per cent in dollar terms. According to him, then the size of the economy will double every 6 years.

He further said in advanced economies, investments have been saturated where productivity improvement will be the only source of growth. The other cause for the country could grow at eight per cent is due to a greater formalisation of the economy. At present, one-half to two-thirds of the Indian economy is still in the informal sector. Higher formalisation of the economy will lead to higher productivity. But there is still scope for raising productivity of the Indian formal sector as compared to global peers. He added that Entrepreneurship, innovation and private credit creation are the other three key pillars which will help the economy to grow at eight per cent in real terms.

The CNX Nifty is currently trading at 24824.40, up by 54.20 points or 0.22% after trading in a range of 24784.45 and 24867.35. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 2.80%, Bharti Airtel up by 2.16%, Tata Consumer up by 2.03%, Hero MotoCorp up by 1.21% and Asian Paints up by 1.14%. On the flip side, Dr. Reddy's Lab down by 1.77%, NTPC down by 1.00%, Tata Motors down by 0.90%, Cipla down by 0.85% and Power Grid down by 0.74% were the top losers.

Asian markets were trading mixed; Jakarta Composite plunged 43.3 points or 0.58% to 7,511.29, Shanghai Composite weakened 2.59 points or 0.09% to 2,853.99, Straits Times fell 7.78 points or 0.23% to 3,365.98 and Taiwan Weighted lost 103.63 points or 0.47% to 22,134.26. However, KOSPI increased 3.49 points or 0.13% to 2,704.62, Hang Seng advanced 98.18 points or 0.56% to 17,489.19 and Nikkei 225 surged 157.74 points or 0.42% to 38,109.54.