Post Session: Quick Review

Buying activity which took place during last leg of trade mainly helped the markets to recoup most of their losses and end with marginal cut on Friday. Markets traded choppy for most part of the day’s trade, as market participants remained cautious as the global cues were not very supportive. Sentiments remained down-beat after Reserve Bank of India’s external advisors showed worries about the monetary policy implications of slowing remittances by overseas Indians for the first time since 2009, even though India does not rely significantly on such funds to meet foreign exchange requirements.

However, markets started recovering in second half of day’s trade as some support came with report that the country received $ 48 billion in remittances in the first nine months of the previous fiscal. Meanwhile, Finance Minister Arun Jaitley has said that the government is following the approach of 'Reform to Transform' through far-reaching structural reforms and has initiated several initiatives to boost investment climate and improve Ease of doing Business.

Global cues remained sluggish with European counters making weak start, as investors are awaiting the US April payrolls report for more clues about the interest rate outlook in the world’s largest economy. The non-farm payrolls report is expected to show an increase of about 200,000 jobs in April, fewer than the 215,000 created in March. At the same time, the unemployment rate is expected to edge down to 4.9 percent from 5.0 percent. Moreover, recent global economic data and some corporate earnings from major Western firms have been lacklustre, leading to risk-off trading in Asian markets.

Back home, depreciation in Indian rupee too dampened sentiments. The rupee depreciated by four paise to trade at 66.59 against the US dollar at the time of equity markets closing due to fresh buying of the American currency by banks and importers. On sectoral front, IT majors which earn most of their revenues from exports to the US edged lower ahead of the US jobs data later today. Gems and jewellery stocks too edged lower after Finance Minister Arun Jaitley on Thursday rejected demands, including from ally Shiv Sena, for rollback of 1% excise duty on non-silver jewellery and asserted that jewellers will have to pay taxes. On the flip side, banks and non-banking finance companies edged higher after the Reserve Bank of India (RBI) has proposed granting on-tap universal banking licences to individuals, groups or entities and companies

The NSE’s 50-share broadly followed index -- Nifty -- ended flat to hold its psychological 7,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- declined by over thirty points but managed to hold the psychological 25,200 mark. Broader markets too struggled to get some traction and ended the session mixed.

The market breadth remained in the favour off decliners, as there were 1,126 shares on the gaining side against 1,388 shares on the losing side while 191 shares remain unchanged. (Provisional)

The BSE Sensex ended at 25228.50, down by 33.71 points or 0.13% after trading in a range of 25057.93 and 25260.48. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.37%, while Small cap index down by 0.20%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.70%, Oil & Gas up by 0.69%, Auto up by 0.61%, Power up by 0.58%, PSU up by 0.48% while, IT down by 0.75%, TECK down by 0.56%, Capital Goods down by 0.55%, Metal down by 0.11% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 4.74%, BHEL up by 2.56%, Asian Paints up by 2.38%, SBI up by 2.05% and Tata Motors up by 1.74%. On the flip side, Adani Ports &Special down by 2.34%, Dr. Reddys Lab down by 2.32%, Wipro down by 1.99%, ONGC down by 1.35% and HDFC Bank down by 1.14% were the top losers. (Provisional)

Meanwhile, bankruptcy law has came a step closer to become a realization with the Lok Sabha passing the Insolvency and Bankruptcy Code, 2015 - a new law aimed at speedy winding up of companies, lower non-performing assets and redeployment of capital for productive uses. As per the law, cases of insolvency will be resolved within a period 180 days, which can be extended by another 90 days. It also provides for fast-track resolution of corporate insolvency within 90 days.

The Lok Sabha passed the code with all the amendments proposed by the joint parliamentary committee being accepted by the government. As suggested by the Joint Committee, two provisions were added to the draft law: One, Centre may enter into a pact with a foreign country for enforcing provisions of the Code. Second, a Letter of Request to a country outside India seeking information. The Bill also provides for setting up of a ‘Insolvency and Bankruptcy Board of India’ to regulate professionals, agencies and information utilities engaged in resolution of insolvencies of companies.

The creation of the law will also improve India’s position in the World Bank’s Doing Business ranking by ensuring time-bound settlement of insolvency, enabling faster turnaround of businesses and creating a data base of serial defaulters. Enactment of this legislation before 31 May this year will help India improve its position in the World Bank’s ease of doing business ranking.

The process of putting the new insolvency and bankruptcy code would involve repealing the existing bankruptcy laws and amendment of 11 laws dealing with defaulters. These include Partnership Act of 1932, Central Excise Act of 1944, Customs Act of 1962, Income Tax Act of 1961, the Recovery of Debts due to Banks and Financial Institutions Act of 1993, Sarfaesi Act of 2002, Sick Industrial Companies Repeal Act of 2003, Payment and Settlement Systems Act of 2007, Limited Liability Partnership Act of 2008 and Companies Act of 2013.

The CNX Nifty ended at 7733.45, down by 2.05 points or 0.03% after trading in a range of 7678.35 and 7738.90. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 4.88%, BHEL up by 2.97%, Eicher Motors up by 2.86%, Tata Power up by 2.84% and ACC up by 2.81%. On the flip side, Dr. Reddys Lab down by 2.31%, Wipro down by 2.05%, Adani Ports &Special down by 2.05%, HCL Tech down by 1.62% and Tech Mahindra down by 1.45% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 36.86 points or 0.37% to 9,815.00, UK’s FTSE 100 declined 31.22 points or 0.51% to 6,086.03 and France’s CAC was down by 30.35 points or 0.7% to 4,289.11.

The Asian markets closed mostly in red on Friday as a firmer dollar exerted downward pressure on commodities and investors looked ahead to a key US jobs report due later in the day for clues on whether the Federal Reserve will hike rates in June. The non-farm payrolls report is expected to show an increase of about 200,000 jobs in April, fewer than the 215,000 created in March. At the same time, the unemployment rate is expected to edge down to 4.9 percent from 5 percent. Chinese shares led regional losses on worries about rising bond defaults and a broad sell-off in China's commodities market. Japanese shares fell slightly to extend losses for the sixth consecutive session as trading resumed after a three-day national holiday, while investors were worried about corporate profit growth as the yen changed hands in the lower 107 yen range. Markets in South Korea and Indonesia were closed for public holidays.