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Local equities trade firm; Nifty above 11,750 mark
May-22-2019

Local equity benchmarks have gathered pace and continue to trade firm in early noon session due to increased buying by funds. Both, Sensex and Nifty gaining more than 200 and 40 points, respectively. Traders remained optimistic with United Nations’ report that India’s economy is projected to grow at 7.1 per cent in fiscal year 2020 on the back of strong domestic consumption and investment. Sentiments also remained largely positive on Employees’ Provident Fund Organisation (EPFO) data which showed that net employment generation in the formal sector was higher at 8.14 lakh in March 2019 against 7.88 lakh in February this year. Total net new enrolments were at 15.52 lakh during the seven-month period from September 2017 to March 2018. Traders took note of a report that land and labour reforms, privatisation and export promotion would be at the top of agenda of the new government irrespective of which party or coalition takes charge after the poll results on May 23. Besides, Chinese envoy Luo Zhaohui stated that China and India have made a lot of progress in building trade ties in the last 14 years but there is still scope for improvement.

On the global front, Asian markets were trading mostly in green, ahead of the next page in the US-China trade war and any fresh narratives on the Federal Reserve, which releases minutes from its last policy. Back home, Fitch Solutions report stated that India’s thermal coal output is projected to grow at an average annual rate of 4.3% by 2028. ‘In absolute volume terms, China and India will have the largest impact on the global coal market balance’.

The BSE Sensex is currently trading at 39172.93, up by 203.13 points or 0.52% after trading in a range of 38903.87 and 39196.77. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.45%, while Small cap was index was up by 0.04%.

The top gaining sectoral indices on the BSE were Energy up by 1.20%, Realty up by 0.90%, Oil & Gas up by 0.89%, BANKEX up by 0.75% and PSU was up by 0.26%, while FMCG down by 0.83%, Metal down by 0.61%, Consumer Durables down by 0.40%, Basic Materials down by 0.34% and TECK was down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.24%, ONGC up by 2.01%, Kotak Mahindra Bank up by 1.83%, ICICI Bank up by 1.79% and HDFC was up by 1.46%. On the flip side, Yes Bank down by 2.59%, IndusInd Bank down by 2.18%, ITC down by 1.44%, Hindustan Unilever down by 1.33% and TCS was down by 0.72% were the top losers.

Meanwhile, United Nations (UN) in its World Economic Situation and Prospects (WESP) 2019 Mid-year Update report has said India's economy is projected to grow at 7.1% in current financial year (FY20) on the back of strong domestic consumption and investment. It projected the economy will grow 7% in last financial year (FY19). However, the report stated that the estimates for India reflect a downward revision from the projections made in the World Economic Situation and Prospects 2019 report released in January this year. That report had estimated that India would grow at 7.6% in FY19 and 7.4% in FY20. It must be noted that despite the downward revisions, India remains the fastest growing major economy in the world, ahead of China.

The WESP mid-year update noted that growth projections for 2019 have been revised downward in all major developed economies. Also, it mentioned the growth outlook for many developing economies has also weakened, adding that despite downward revisions, growth in India remains strong amid robust domestic demand. Moreover, it said world gross product growth is now expected to moderate from 3.0% in 2018 to 2.7% in 2019 and 2.9% in 2020, reflecting a downward revision from WESP 2019 forecast released in January. In tandem with slowing industrial production, international trade activity has visibly weakened, reflecting in part unresolved trade disputes between the United States of America and China.

Besides, the Chief of the Global Economic Monitoring Branch at the UN Department of Economic and Social Affairs (DESA), Dawn Holland said India should focus on increasing private sector involvement in investment as she underlined that the impact of demonetisation on the country's economic growth passed through relatively quickly and there is no longer a hangover from the reform on the country's current growth prospects.

The CNX Nifty is currently trading at 11753.70, up by 44.60 points or 0.38% after trading in a range of 11682.40 and 11760.65. There were 25 stocks advancing against 24 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Sun Pharma up by 2.19%, ICICI Bank up by 1.85%, ONGC up by 1.75%, Kotak Mahindra Bank up by 1.69% and BPCL was up by 1.63%. On the flip side, Indiabulls Housing Finance down by 2.88%, Yes Bank down by 2.59%, IndusInd Bank down by 2.21%, Tech Mahindra down by 2.14% and JSW Steel was down by 1.70% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 91.10 points or 0.33% to 27,748.34, Nikkei 225 surged 36.08 points or 0.17% to 21,308.53, KOSPI rose 8.09 points or 0.39% to 2,069.34, Straits Times advanced 7.34 points or 0.23% to 3,190.60 and Taiwan Weighted was up by 6.35 points or 0.06% to 10,470.85.

On the other side, Shanghai Composite declined 0.57 points or 0.02% to 2,905.40 and Jakarta Composite was down by 19.24 points or 0.32% to 5,932.13.

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