Barometers trim gains; breadth positive

Key equity benchmarks trimmed gains in early afternoon trade. The Nifty traded near the 11950 mark. At 12:22 IST, the barometer index, the S&P BSE Sensex, was up 68.87 points or 0.17% at 39,908.12. The Nifty 50 index was up 30.7 points or 0.26% at 11,947.45 .

The S&P BSE Mid-Cap index was up 0.13%. The S&P BSE Small-Cap index was up 0.33%.

The market breadth was positive. On the BSE, 1211 shares rose and 889 shares fell. A total of 145 shares were unchanged.

The Economic Survey 2018-19 tabled today revealed that to become a $5 trillion economy by 2025, India need to sustain a GDP growth rate of 8%.

Chief Economic Advisor K V Subramanian expects FY20 GDP growth at 7%. This higher growth will come in the wake of the stable macros, he said. He sees the general fiscal deficit seen at 5.8% in FY19 vs 6.4% in FY18.

Investment rate seems to have bottomed out and the green shoots in investment activity seem to be taking hold, the survey said. It added that the investment rate would likely be higher in FY20. Outlook of Indian economy appears bright with prospects of pickup in growth in 2019-20 on back of pickup in private investment and robust consumption growth.

Subramanian sees oil prices seen declining in FY20. According to the Economic Survey, the government stood by the path of fiscal consolidation in FY19. Non-performing assets (NPAs) as percentage of gross advances reduced to 10.1% at end December 2018 from 11.5% at end March 2018. The decline in NPAs should help push capex cycle from here, the survey said.

The survey also says that accommocative MPC policy should help cut real interest rates. The survey said rural wages growth started increasing since mid-2018. It also said that Indian farmers may have produced less in FY19 because of the fall in food prices. The share of share of informal sector in manufacturing has fallen since last year, the survey revealed.

Subramanian will hold press conference on Economic Survey 2018-19 from National Media Centre at 13:15 pm onwards today.

The Union Budget will be announced tomorrow, 5 July 2019. After presenting the interim budget in February 2019, the Modi government will present its full-year budget 2019-20. The government is likely to amend several policies and schemes for delivering growth to the biggest drivers of the economy, including farmers, middle class, and the corporate sector.

On the equity front, Titan Company was down 2.68% to Rs 1292.25 after a foreign brokerage house downgraded the stock to equal-weight from overweight with a target price of Rs 1300 per share.

Shares of direct-to-home (DTH) services provider, Dish TV India rallied 4.47% to Rs 32.7 after media reports indicated that Bharti Airtel and private equity firm, Warburg Pincus have decided to likely purchase the promoters' 57.99% stake in the company. The acquirers have also decided to pay Rs.45 to Rs 50 per share to the promoters of Dish TV India, who would hence receive an amount ranging from Rs 4,800 crore to Rs 5,300 crore.

Auto stocks witnessed buying. Eicher Motors (up 2.05%), Maruti Suzuki India (up 0.76%), Hero MotoCorp (up 0.73%), Bajaj Auto (up 0.22%), Escorts (up 0.14%) and Mahindra & Mahindra (up 0.04%) edged higher. Ashok Leyland (down 0.77%) and TVS Motor Company (down 0.02%) declined.

Shares of IT companies were mixed. Oracle Financial Services Software (up 1.14%), Wipro (up 0.37%), Mphasis (up 0.21%), TCS (up 0.08%), Infosys (up 0.07%) gained. Hexaware Technologies (down 1.67%), HCL Technologies (down 1.62%), MindTree (down 0.98%), Tech Mahindra (down 0.43%) and Persistent Systems (down 0.22%) edged lower.

The S&P BSE IT index was down 11.12 points or 0.07% at 15,650.55.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 68.83, compared with its close of 68.8975 during the previous trading session.

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, fell 2% at 13.42.

On the options front, Nifty option chain for 25 July 2019 expiry showed a maximum call open interest (OI) of 16.33 lakh contracts at the 12,000 strike price. Maximum put OI of 17.63 lakh contracts was seen at 11,500 strike price. Options data suggested a trading range for Nifty will be between 11,500 and 12,000.

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