Post Session: Quick Review

Buying activity which took place during last leg of trade mainly drove the markets higher and key domestic benchmarks managed to keep their head above water on first day of May F&O series. Markets traded choppy for most part of the day’s trade in the absence of directional cues. Some support came with a UN report for the Asia-Pacific has said that Indian economy is projected to expand by 7.6 percent in 2016-17 and accelerate to 7.8 percent in 2017-18, mainly on the back of domestic consumption demand aided by steady employment and a relatively low inflation.

However, gains remained capped with government’s statement that implementation of new pay scales recommended by the 7th Pay Commission is estimated to put an additional burden of Rs 1.02 lakh crore, or 0.7 percent of GDP, on the exchequer in 2016-17. The burden on pay head would increase by Rs 39,100 crore to about Rs 2.83 lakh crore in the current fiscal. Traders also remained concerned with report that country’s current account deficit is likely to widen modestly to $25 billion in the current fiscal from $20 billion last year on rising demand for gold and sluggishness in exports.

On the global front, European counters were trading in red with CAC, DAX and FTSE were trading with a cut of around a percent on the back of disappointing data and weak corporate earnings. Asian stocks extended their losses from the previous session on Friday. While oil prices slid in Asian deals after sharp overnight gains, the yen continued its rise against the dollar, keeping investors cautious.

Closer home, appreciation in Indian rupee aided some sentiments. The rupee were trading higher by 6 paise against the US dollar to Rs 67.45 at the time of equity markets closing on sustained bouts of dollar selling by banks and exporters. However, losses in ICICI Bank kept the gains in check. The bank posted a steep fall in its net profit for the quarter that ended in March 2016 at Rs 702 crore. The lender reported an over 70% fall in its net profit on a year on year basis. It had posted a net profit of Rs 3,018.13 crore in the December quarter.

Most of the realty shares edged lower on profit booking after a rally in the previous session triggered by reports that Mumbai’s civic body has raised the floor space index (FSI) in its new draft development plan for the city. Stocks related to sugar space struggled yet another day after the government decided to allow states to impose and enforce stock limits to check the price rise in sugar. Textile and apparel stocks edged too lower despite a World Bank report stating that rising wages in China presents a huge opportunity to the apparel sector in India with a possibility of creating up to 1.2 million jobs in the country.

The NSE’s 50-share broadly followed index Nifty gained marginally to end tad below its psychological 7,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose marginally by three points to hold on to its psychological 25,600 mark. Broader markets too struggled to get some traction during the session and ended the trade mixed.

The market breadth remained in favor of decliners, as there were 1,133 shares on the gaining side against 1,360 shares on the losing side while 167 shares remain unchanged. (Provisional)

The BSE Sensex ended at 25606.62, up by 3.52 points or 0.01% after trading in a range of 25424.03 and 25755.43. There were 16 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.22%, while Small cap index down by 0.05%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.18%, Power up by 0.93%, Healthcare up by 0.76%, Utilities up by 0.62% and Metal up by 0.51%, while Telecom down by 2.15%, Consumer Durables down by 0.97%, TECK down by 0.62%, IT down by 0.45%, Capital Goods down by 0.24% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Lupin up by 1.96%, Cipla up by 1.72%, NTPC up by 1.60%, HDFC Bank up by 1.29% and Tata Steel up by 1.24%. On the flip side, Bharti Airtel down by 2.32%, SBI down by 1.77%, Reliance Industries down by 1.64%, Hindustan Unilever down by 1.30% and ICICI Bank down by 1.17% were the top losers. (Provisional)

Meanwhile, the Parliamentary Standing Committee on Finance in its report has asked NITI Aayog to complete mid-term review of 12th Five Year Plan (2012-17) on war footing for implementing their suggestions and initiatives in the last year of the Plan period. Expressing its concern, the committee pointed out that “with less than one year of the Plan period left, how the suggestions of the NITI would be effectively implemented in such a short duration of the remaining period of 12th Plan. The NITI should have been proactive in the matter and completed the job much earlier.”

The panel further said that even though the 12th Plan is in its last year of operation, this vital exercise has not yet been completed and the NITI has prepared only a draft Appraisal Document. Noting that 12th Plan is going to be over in less than a year, the panel said that they are not at all clear about the status of planning process in future.

In February 2015, it was decided that NITI would undertake Mid Term Appraisal of the 12th Five year Plan with a view to incorporating the shared vision of national development and important initiatives of Central Government so that they may be implemented in the last two years of the Plan.

In the separate development, the panel said that no study on utilisation of 10 per cent FlexiFund component within the CSS has been conducted by them to assess the benefits accruing to the States and has asked NITI to assess the implementation and impact of these schemes on a priority basis. It added that in this endeavor, more emphasis should be given on monitoring the outcomes of these schemes rather than the expenditure.

The CNX Nifty ended at 7849.80, up by 2.55 points or 0.03% after trading in a range of 7788.70 and 7889.05. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 2.44%, Kotak Mahindra Bank up by 2.24%, Lupin up by 1.96%, Tata Power up by 1.81% and Cipla up by 1.66%. On the flip side, Idea Cellular down by 6.28%, HCL Tech. down by 6.20%, Bharti Airtel down by 2.44%, Bank of Baroda down by 1.65% and SBI down by 1.59% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 81.35 points or 0.79% to 10,239.80, France’s CAC declined 57.58 points or 1.26% to 4,499.78 and UK’s FTSE 100 was down by 36.69 points or 0.58% to 6,285.71.

Asian equity markets ended lower on Friday following the overnight sell-off on Wall Street. Oil prices slid in Asian deals after sharp overnight gains, and the yen continued its rise against the dollar, keeping investors cautious. Chinese and Hong Kong shares fell as a spate of bond defaults as well as increasing volatility in the commodity market despite a government crackdown on speculation kept investors on edge ahead of the Labor Day holiday. Japanese markets were closed for the Showa Day holiday after steep losses in the previous session amid the stronger yen stemming from disappointment that the Bank of Japan held off on further easing. Though, Amazon posted its biggest quarterly profit ever and a slew of other US companies also reported better-than-expected results after the US closing bell, helping to limit the downside across the region.