Sensex, Nifty continue to trade in positive terrain

Indian stock markets continued to trade in positive terrain in the early noon session due to buying in Realty, Telecom, and Utilities stocks. Buying in frontline stocks such as Hero MotoCorp, Indusind Bank, and Vedanta were aiding sentiment, while selling in Bajaj Auto, Yes Bank and Tech Mahindra kept the gains in the markets in check. Sentiment remained upbeat with Commerce and Industry Minister Piyush Goyal’s statement that foreign direct investments (FDI) into the country grew 3 percent to $6.95 billion in April. During 2018-19, the country recorded the highest-ever total FDI inflow of $64.38 billion, which is 6 percent higher as compared to 2017-18. Some comfort also came with CBDT Chairman Pramod Chandra Mody said that the government has re-calibrated and fixed the direct taxes collection target for this financial year at Rs 13.35 trillion, a task that is difficult, but achievable. However, upside remains limited with a private report stating that the country’s real GDP growth is likely to be 6.7% from 6.9% forecasted earlier in FY20 citing the continuing slowdown in consumption demand and warned that a revival is unlikely before FY21.

On the global front, Asian markets were trading mostly in green as Federal Reserve’s Jerome Powell hinted rate cut ahead. Back on domestic markets, on the sectoral sector, Healthcare stocks were trading lower despite Rating agency ICRA’s latest report stating that the hospital sector is seeing better days ahead after more than two years of subdued performance which was mainly due to several regulatory measures.

The BSE Sensex is currently trading at 38700.99, up by 143.95 points or 0.37% after trading in a range of 38631.31 and 38774.80. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Midcap index rose 0.09%, while the Small cap index was up by 0.04%.

The top gaining sectoral indices on the BSE were Realty up by 1.07%, Telecom up by 0.94%, Utilities up by 0.72%, Power up by 0.65% and Metal was up by 0.64%, while Consumer Durables down by 0.78%, Capital Goods down by 0.35%, Industrials down by 0.24% and IT was down by 0.14% were the few losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.30%, Indusind Bank up by 1.46%, Vedanta up by 1.16%, Hindustan Unilever up by 1.14% and Power Grid Corporation was up by 1.05%. On the flip side, Bajaj Auto down by 2.13%, Yes Bank down by 1.94%, Tech Mahindra down by 1.60%, ICICI Bank down by 1.17% and Axis Bank was down by 0.41% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report have said that the US-focused domestic pharmaceutical companies need to step up their regulatory compliance to secure impeccable status as dependable suppliers and provide the targeted return on the ongoing and planned research and development (R&D) and capital investments over the next decade. It noted that as an operating environment within the US has undergone a shift following the growing competition and increasing buying power of customers, product quality and uninterrupted supply have become focus points for commercial success. It added that this translates to a robust approach to regulatory compliance for manufacturing facilities.

According to the report, from the second half of 2017, the industry has been seeing the resolution of key manufacturing facilities of large manufacturers under warning letters and import alerts with an average period of 24 to 36 months after regulatory restriction. It warned that while this is encouraging, a reduction in resolution times and limited repeat observations would indicate regulatory discipline returning to the industry.

Ind-Ra further stated that input quality risks stemming from high dependence on Chinese players have been an emerging concern in FY19, leading to product recalls initiated by major players. Therefore, it said securing supply chain is likely to emerge as a top priority as several complex generics and innovative pipelines will hit the markets in the next decade. It pointed out that the credit profile and return ratios of companies with regulatory deviations have been adversely impacted attributed to remediation cost and restricted market presence.

The CNX Nifty is currently trading at 11548.35, up by 49.45 points or 0.43% after trading in a range of 11519.50 and 11561.70. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 2.71%, Zee Entertainment up by 2.43%, Dr. Reddys Lab up by 2.35%, Hero MotoCorp up by 2.21% and Bharti Infratel was up by 1.60%. On the flip side, Yes Bank down by 2.26%, Bajaj Auto down by 2.09%, Tech Mahindra down by 1.63%, Indian Oil Corporation down by 1.52% and ICICI Bank was down by 1.18% were the top losers.

Asian markets were trading mostly in green; KOSPI rose 27.33 points or 1.33% to 2,086.11, Taiwan Weighted strengthened 45.95 points or 0.43% to 10,844.43, Hang Seng increased 240.03 points or 0.85% to 28,444.72, Straits Times advanced 21.13 points or 0.63% to 3,361.55, Nikkei 225 surged 89.60 points or 0.42% to 21,623.08 and Shanghai Composite was up by 5.01 points or 0.17% to 2,920.31. On the other hand, Jakarta Composite was down by 4.67 points or 0.07% to 6,406.01.

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