Indian Indices Trade Marginally Higher; Capital Goods Stocks Witness Buying

Stock markets in India are presently trading near the dotted line with positive bias. Sector indices are trading on a mixed note with stocks in the capital goods sector and metal sector witnessing maximum buying interest. Healthcare stocks are trading in the red.

The BSE Sensex is trading up 34 points (up 0.1%) and the NSE Nifty is trading up 14 points (up 0.1%). The BSE Mid Cap index is trading up by 0.1%, while the BSE Small Cap index is trading up by 0.4%. The rupee is trading at 63.84 to the US$.

In the news from global financial markets, the European Central Bank (ECB) maintained status quo at its policy meet and left its ultra-easy monetary policy unchanged. Policy makers kept asset purchases at 60 billion euros (US$72 billion) a month until December. They also reiterated to increase the size or duration if the economy worsens.

The central bank also left interest rates unchanged and repeated that they expect borrowing costs to stay at present levels until well past the end of net asset buying.

The ECB is not in a hurry to taper stimulus as inflation is still not at the bank’s target level.

After ECB chief Mario Draghi raised the prospect of policy tightening in June, he signaled that any policy tweaks would come only gradually, setting the scene for a possible discussion in September about the long-awaited tapering of its asset buys.

One shall note that the ECB has been pouring money into the eurozone to boost inflation from a near-deflationary level.

Most of the economic problems we see today are fueled by the easy money policies that central banks have adopted around the world. However, with the changes happening at central banks of late, it seems that the end of easy money is near.

As per a leading financial daily, a report by Nomura stated that India’s current account deficit (CAD) is likely to widen to 3% in the second quarter of 2017. This, as per the report, is due to a sharp deterioration in trade deficit.