Post Session: Quick Review

Friday turned out to be a daunting session for the Indian equity indices which got pounded by over a percentage point, as investors opted to book profit after recent gains amid disappointing macro economic data. After a gap-down opening, the domestic bourses never looked in recovery mood, though the selling got arrested in last leg of trade and the benchmarks recovered a bit from the day’s low. Sentiments remained dampened since beginning after India’s industrial output rose by 0.1 per cent in March, largely losing the momentum generated in February when it had risen by two per cent, after a three-month fall. Moreover, Consumer Price Index-based inflation (CPI) for the month of April was a higher than expected 5.39 per cent, on the back of a large jump in food prices, snapping a three-month downtrend. The data has triggered speculation that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month.

Traders failed to get any sense of relied with United Nations’ report named World Economic Situation and Prospect, where it said that the India’s economy is slowly gaining momentum and is projected to grow by 7.3 percent this year. Meanwhile, Reserve Bank of India (RBI) proposed tighter norms to mitigate the risk posed to the banking system on account of large aggregate lending to a single borrower. 2017-18 onwards and the banking system should ordinarily keep its future incremental exposure to specified borrowers within the normally-permitted lending limit.

Selling got intensified after European counters have made a feeble start with CAC, DAX and FTSE were trading with a cut of around half a percent in early deals. Asian shares ended in red on Friday, as crude oil retreated and technology shares declined after Apple Inc. sank to the lowest since June 2014.

Back home, selling was both brutal and wide-based as none of sectoral indices on BSE could manage a green close. Counters which featured in the list of worst performers included metal, realty and capital goods. Depreciation in Indian rupee too weighed down sentiments. The rupee depreciated by 15 paise to 66.77 against the US dollar at the time of equity markets closing due to increased demand for the American currency from importers.

On the sectoral front, banking counters edged lower despite RBI issuing guidelines on ownership in private sector banks. RBI allowed foreign banks to invest up to 10% in local private lenders and supranational institutions such as Life Insurance Corporation of India to take this to as much as 40% as part of a sweeping set of measures expected to help them shore up  capital and possibly encourage consolidation in the sector. FMCG majors ended mixed on concerns that rise in consumer inflation is likely to hurt spending leading to lower volume growth going forward.

The NSE’s 50-share broadly followed index Nifty tumbled by over eighty points to end below the psychological 7,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over three hundred points to finish below its psychological 25,500 mark. Broader markets too witnessed selling pressure and ended the session with a cut of around half a percentage point.

The market breadth remained in favor of decliners, as there were 1,051 shares on the gaining side against 1,497 shares on the losing side while 174 shares remain unchanged. (Provisional)

The BSE Sensex ended at 25489.57, down by 300.65 points or 1.17% after trading in a range of 25400.27 and 25743.69. There were 3 stocks advancing against 26 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.58%, while Small cap index down by 0.25%. (Provisional)

The top losing sectoral indices on the BSE were Realty down by 2.07%, Metal down by 2.04%, Capital Goods down by 1.57%, Consumer Durables down by 1.43% and Basic Materials down by 1.32%, while there were no gainers on the index. (Provisional)

The top gainers on the Sensex were Asian Paints up by 1.70%, Tata Motors up by 0.43%, NTPC up by 0.11% and ITC up by 0.00%. On the flip side, Adani Ports &Special down by 3.48%, Hindustan Unilever down by 2.58%, BHEL down by 2.50%, HDFC down by 2.46% and Tata Steel down by 2.36% were the top losers. (Provisional)

Meanwhile, abandoning the ancient concept of five-year plans, the government has decided to come up with a 15-year vision document in tandem with global trends and economic growth.  This will also include internal security and defence that has been not a part of the five year plan. The long-term vision document will formulate various ways through which India can achieve its broader social objectives to meet the UNDP’s 2030 sustainable goals and will be a roadmap on transformation required in the planning system to sync it with the 14th Finance Commission recommendations. The move comes just three months after finance minister Arun Jaitley hinted in his budget speech that the government will abandon the plan and non-plan distinction from 2017-18, indicating that the five-year plan process will end with the 12th five-year plan (2012-17).

The first 15-year vision document will start from 2017-18, along with a seven-year National Development Agenda which will lay down the schemes, programmes and strategies to achieve the long-term vision. National Development Agenda will be reviewed after a gap of every three years to ensure that it was aligned with financial needs and requirements. For the first Development Agenda, the review would be done in 2019-20, in line with the termination year of the 14th Finance Commission. The NITI Aayog will create a dashboard for constant monitoring, evaluation and reviewing and also fix up outcome targets for all major schemes of infrastructure and social sectors. A plan for the current financial year would be submitted to the Prime Minister's Office by later this month.

The Five-Year Plans were started by Jawahar Lal Nehru in 1951. Since then India had 12 such programs ensured an integrated approach to national economic programs. However, the Modi government felt that the Planning Commission and the five-year-plans have outlived their utility.

The CNX Nifty ended at 7814.90, down by 85.50 points or 1.08% after trading in a range of 7784.20 and 7881.00. There were 9 stocks advancing against 42 stocks declining on the index. (Provisional)

The top gainers on Nifty were Asian Paints up by 1.60%, Idea Cellular up by 1.43%, HCL Tech up by 1.18%, Tata Motors up by 0.75% and Bharti Infratel up by 0.75%. On the flip side, Hindalco down by 4.39%, Eicher Motors down by 3.85%, Adani Ports &Special down by 3.38%, Kotak Mahindra Bank down by 2.55% and HDFC down by 2.50% were the top losers. (Provisional)

European markets were trading in red, UK’s FTSE 100 declined 38.7 points or 0.63% to 6,065.49, Germany’s DAX decreased 28.47 points or 0.29% to 9,833.65 and France’s CAC was down by 22.11 points or 0.51% to 4,271.16.

Asian equity markets ended lower on Friday as the yen ticked up and oil prices fell after rising about 1 percent in choppy trade overnight. Caution ahead of a deluge of European, US and Chinese data also kept investors on the sidelines, heading into the weekend. Japanese stocks fell in choppy trade, dragged down by profit-taking and persistent concerns over a stronger yen's impact on corporate profits. An uptick in yen hit exporter's shares and Apple suppliers underperformed on concerns they will see a significant drop in orders in H2 due to weak demand from smart phones. The yen edged up a little bit, but hovered near two-week lows amid speculation the Bank of Japan could expand its monetary stimulus as soon as next month. China stocks closed at their lowest level in two months, as metal prices dropped and the Yuan weakened amid concern the government will hold off from new stimulus even as growth falters. Hong Kong shares dropped as investors awaited a slew of Chinese data due this weekend. While data on new loans and money supply are slated for release later in the day, reports on industrial output, fixed asset investment and retail sales will be published on Saturday.