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Indices continue to trade higher

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Key indices were trading with modest gains in afternoon trade. At 13:22 IST, the barometer index, the S&P BSE Sensex, was up 50.82 points or 0.13% at 39,890.12. The Nifty 50 index was up 25 points or 0.21% at 11,941.75. Trading sentiment was strong after India's economic survey report pegged India's real GDP growth at 7% for financial year 2019-20.

In the broader market, the S&P BSE Mid-Cap index was up 0.12%. The S&P BSE Small-Cap index was up 0.35%.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1243 shares rose and 1000 shares fell. A total of 149 shares were unchanged.

UPL (up 5.19%), Indiabulls Housing Finance (up 3.83%), Tata Motors up (2.46%), Bharti Airtel (up 2.43%) and IndusInd Bank (up 2.27%) advanced.

Titan Company (down 2.84%), Tata Steel (down 2.16%), HCL Technologies (down 1.31%) and Bharti Infratel (down 0.6%) declined.

Kolte-Patil Developers was up 5.62% to Rs 232.15 after the company announced the signing of three new projects in Pune under the Development Management (DM) model. The projects are located at Wagholi in East Pune and Kiwale and Ravet in West Pune with a saleable potential of 1.2 million square feet and over 1,250 units to be developed.

Both listed aviation stocks advanced. Spice Jet was up 1.28% to Rs 126.75 while InterGlobe Aviation was up 2.93% to Rs 1628.

The economic survey revealed that India's scheduled domestic air transportation for passengers and goods has grown by 14% and 12% respectively in 2018-19. Domestic passenger traffic in revenue passenger kilometre (RPK) recorded the fastest growth in the world at about 20% for over 50 consecutive months up to December 2018, which has positively impacted India's economy. The survey also revealed that impressive double-digit domestic air cargo growth of 12.1% in 2018-19 over 2017-18 was achieved and air cargo handled reached 3.6 MMT.

The government has given an impetus to the promotion of quality public transport, especially through the introduction of metro projects in various major cities, a shift to electric mobility in road transport can lead to beneficial results. India could also emerge as a hub for manufacturing of such vehicles. With this view, a "National Electric Mobility Mission Plan 2020 (NEMMP)" was conceived with an objective to achieve sales of 60-70 lakh units of total EVs by 2020.

As electric vehicles represent the next generation in sustainable mobility, India must emphasize on them. Currently, the market share of electric cars is only 0.06% when compared to 2% in China and 39% in Norway. Access to fast charging facilities must be fostered to increase the market share of electric vehicles, the economic survey said.

Auto stocks witnessed buying. Eicher Motors (up 1.91%), Escorts (up 1.49%), TVS Motor Company (up 0.94%), Hero MotoCorp (up 0.85%), Maruti Suzuki India (up 0.75%) and Bajaj Auto (up 0.03%) advanced. Ashok Leyland (down 0.44%) and Mahindra & Mahindra (down 0.07%) declined.

Pharma Stocks edged lower. Piramal Enterprises (down 0.94%), Divi's Laboratories (down 0.79%), IPCA Laboratories (down 0.77%), Glenmark Pharmaceuticals (down 0.63%), Sun Pharmaceuticals Industries (down 0.38%), Lupin (down 0.27%), Cadila Healthcare (down 0.21%) and Cipla (down 0.21%) declined. Wockhardt (up 1.28%), GlaxoSmithKline Pharmaceuticals (up 0.78%), Dr Reddy's Laboratories (up 0.52%), Aurobindo Pharma (up 0.4%) and Alkem Laboratories (up 0.04%) gained.

On the economic front, 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.

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.

Overseas, most European stocks opened higher while most Asian stocks continued trading higher on Thursday. Global shares traded higher after weaker-than-expected US economic data gave investors cause to anticipate that the Federal Reserve will cut interest rates at its upcoming July meeting.

Meanwhile, White House economic advisor Larry Kudlow told reporters on Wednesday that face-to-face trade talks between the U.S. and China will continue in the coming week.

US stocks rose on Wednesday, with each of the major indexes closing at a record high, as expectations grew that the Federal Reserve would take a more dovish turn as a raft of data provided more evidence of a slowing economy.

Payroll firm Automatic Data Processing Inc. in collaboration with Moody's Analytics, estimated the US private sector added 102,000 new jobs in June, above the 41,000 jobs created in May. A report on new claims for unemployment benefits for the week ended June 29, however, showed those falling by 8,000 to 221,000.

Two measures of the US services sector reflected some weakness, with the Institute for Supply Management's nonmanufacturing index falling in June to 55.1%, from 56.9% in May, the lowest reading in about two years. Markit's services PMI edged higher to 51.5 in June from a 39-month low of 50.9 in May.

Meanwhile, the Commerce Department reported Wednesday that US factory orders fell in 0.7%.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, July 04 2019. 13:20 IST