Post Session: Quick Review

Indian equity benchmarks ended the choppy day of trade on quiet note on Friday as sentiment remained weak in the absence of any positive trigger amid sustained capital outflows by foreign funds. Muted expectation of fourth quarter earnings weighed on the domestic sentiment. Immense volatility characterized trading whereby benchmark equity indices kept altering between green and red terrain throughout the session. However, broader indices outperformed benchmarks and garnered gain of over half a percent.

Traders remained cautious with the Reserve Bank of India (RBI) in a report stating that India`s power reforms are likely to put pressure on state governments' budgets, potentially forcing them to cut spending needed to support economic growth. Investors also remained worried over the report that drought in southern states has affected the cultivation of major commodities like rice, cotton and spices. Production of these commodities is likely to come down sharply if the absence of summer rains prevails.

However, some support came with global rating agency Moody’s Investors Service’s latest report stating that low commodity prices and better FDI inflows have reduced India's vulnerability to external shocks which is 'credit positive' for India. It also said that India's external financing needs have diminished significantly over the last three years. Market participants also got some comfort with the report that the consumer sentiment in India jumped to a four-month high in March but consumers remained concerned about the current state of their finances and the wider economy. The MNI India Consumer Sentiment Indicator rose to 111.2 in March from 108.9 in February, led by optimistic expectations for future finances and business conditions.

On the global front, European markets were trading in green in early deals as firmer prices of metals and crude oil boosted resource-related stocks, although a pan-European index was on track for its fourth straight week of losses. Asian markets extended losses to three-week lows on Friday, as investors bet Japan would be hard pressed to drive down its currency in the face of widespread foreign opposition.

Back home, India has offered its commitments on opening goods and services sectors in the Regional Comprehensive Economic Partnership (RCEP) negotiations, a mega trade agreement which is being negotiated among 16 countries including 10 ASEAN members. On the sectoral front, banking stocks remained on buyers’ radar after Reserve Bank of India (RBI) issued instructions on trading in priority sector lending certificates. However, telecom stocks remained under pressure despite Union cabinet deciding to allow telecom companies to use spectrum allocated to them without auction to offer new services to consumers at a provisional price recommended by the telecom regulator.

The NSE’s 50-share broadly followed index Nifty gained around ten points to regain its psychological 7,550 support level, while Bombay Stock Exchange’s Sensitive Index – Sensex declined by over ten points to end below its crucial 24,700 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of over half a percent.

The market breadth remained in favor of advances, as there were 1,464 shares on the gaining side against 1,060 shares on the losing side while 165 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24673.84, down by 11.58 points or 0.05% after trading in a range of 24608.51 and 24736.03. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.64%, while Small cap index up by 0.63%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 1.59%, Power up by 1.58%, Realty up by 1.44%, Capital Goods up by 0.97% and Basic Materials up by 0.89%, while IT down by 0.82%, TECK down by 0.66%, Consumer Durables down by 0.59%, Auto down by 0.08% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 3.83%, BHEL up by 2.72%, Lupin up by 2.22%, Mahindra & Mahindra up by 1.88% and GAIL India up by 1.86%. On the flip side, TCS down by 1.66%, Hero MotoCorp down by 1.45%, Maruti Suzuki down by 1.36%, Hindustan Unilever down by 1.23% and Infosys down by 1.15% were the top losers. (Provisional)

Meanwhile, Moody's Investors Service in its report has said that the India’s increasing foreign direct investment (FDI) provides stable financing of the country’s current account deficit (CAD) and is a credit positive, added that the efforts to liberalise foreign investment limits in several sectors and the 'Make in India' campaign are bearing fruit.

The rating agency further said that the rising FDI will continue to cover CAD. Net FDI inflows hit an all-time high in January 2016, at $3.0 billion, more than financing the CAD for the first time since 2004. It further said, 'We expect FDI inflows to continue to rise. It provides a stable source of financing that will help to mitigate India's external financing risks'. It hoped that smart cities, industrial corridors and investment and manufacturing zones will boost FDI inflows further.

 Moody’s, however, cautioned that weakening remittances and services exports could weigh on current account deficit. Worker remittances dropped 30% in October-December 2015 from a year ago, albeit from unusually high levels. It said that against a backdrop of subdued global economic activity in particular in the Gulf, the origin of more than half of remittances to India remittance inflows could weaken further in the coming months.

The CNX Nifty ended at 7555.20, up by 8.75 points or 0.12% after trading in a range of 7526.70 and 7569.35. There were 32 stocks advancing against 19 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 3.95%, BHEL up by 2.98%, Tata Power up by 2.97%, Tech Mahindra up by 2.56% and Lupin up by 2.01%. On the flip side, Hero MotoCorp down by 1.76%, TCS down by 1.57%, Infosys down by 1.33%, Axis Bank down by 1.18% and Maruti Suzuki down by 1.16% were the top losers. (Provisional)

European markets were trading in green; France’s CAC increased 24.41 points or 0.57% to 4,270.32, UK’s FTSE 100 gained 32.98 points or 0.54% to 6,169.87 and Germany’s DAX increased 63.14 points or 0.66% to 9,593.76.

Asian equity markets ended mostly lower on Friday after oil prices fell over 1 percent overnight and shares in leading European and US banks fell sharply on earnings worries. China’s shares ended lower as investors awaited a slew of March economic indicators including exports, new lending and inflation due over the next week, with some investors locking in profit from a month-long rebound that reflects expectations for a strong first quarter. However, Japanese markets stood out in a subdued trading session as the yen weakened slightly against the dollar in the wake of comments from Japan's Finance Minister and Fed Chair Janet Yellen. While Japanese Finance Minister Taro Aso warned against rapid yen rise and vowed to take action if necessary, Yellen touted the strength of the world's largest economy while speaking in New York alongside three of her predecessors - Ben Bernanke, Paul Volcker, and Alan Greenspan.