Post Session: Quick Review

Erasing almost all of their initial gains, Indian equity benchmarks ended Friday’s trade near neutral lines as market participants remained wary ahead of US jobs data that could provide some hints about the timing of the Federal Reserve’s likely move on interest rate hike. Initially, markets made a gap-up opening as traders remained encouraged with India Meteorological Department (IMD) retaining its earlier ‘above normal’ forecast for this year’s southwest monsoon, at 106% of the Long Period Average (LPA). The Met department said that conditions are becoming favourable for the onset of monsoon and it would hit the Indian coast in the next 4-5 days. Stronger rains could cool down food prices, raising the prospect that the Reserve Bank of India would be more willing to cut interest rates again later this year. Besides, firm global cues too provided support to domestic markets with European counters making a firm start. CAC, DAX and FTSE were trading in green with a gain of around half a percent in early deals. Asian markets rallied on Friday as markets awaited key US jobs data, which will offer a key indicator of whether the Federal Reserve will pull the trigger in June.

Back home, sentiments also remained up-beat with Finance Minister Arun Jaitley’s statement that India will attempt to keep the proposed Goods & Services Tax ( GST ) rate as moderate as possible and the government will push for passage of the bill introducing the levy in the upcoming monsoon session of Parliament. Finance Minister has also said that the government will push ahead with its reform agenda to retain the fastest growing large economy tag and help India move towards becoming ‘a more developed economy’.

However, key gauges reversed momentum and entered into red terrain in last leg of trade as investors opted to book profit at higher levels amid Services growth cools sharply to 6-month low in May, due to a deceleration in new orders. The seasonally adjusted Nikkei Services Business Activity Index fell to 51.0 in May from 53.7 in April. Although service providers remained optimistic that output will expand in the year ahead, the level of confidence was the lowest recorded since February.

Meanwhile, the Reserve Bank of India (RBI) at its policy meet next week is likely to maintain status quo on interest rates. On the sectoral front, shares of oil exploration and production companies and Aviation stocks edged lower as global crude oil prices rose. On the flip side, auto counter edged higher after companies like Ashok Leyland, Bajaj Auto, TVS Motors etc. reported better-than-expected sales numbers for May 2016. Shares of companies dependent on agriculture rose as hopes of a better monsoon increased expectations of a revival in rural demand.

The NSE’s 50-share broadly followed index Nifty end slightly in green to hold the psychological 8,200 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex ended flat to hold on to its psychological 26,800 mark. Broader markets struggled to get some traction and ended the session slightly in red.

The market breadth remained in favor of decliners, as there were 1,099 shares on the gaining side against 1,521 shares on the losing side while 180 shares remain unchanged. (Provisional)

The BSE Sensex ended at 26843.03, down by 0.11 points after trading in a range of 26792.07 and 27008.14. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.11%, while Small cap index down by 0.42%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 0.82%, Auto up by 0.45%, Power up by 0.44%, Finance up by 0.43%, Energy up by 0.38% and Oil & Gas up by 0.22%, while Telecom down by 2.64%, Consumer Durables down by 1.75%, Realty down by 1.14%, Capital Goods down by 0.90% and Healthcare down by 0.73% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 3.52%, NTPC up by 1.97%, Hindustan Unilever up by 1.86%, Mahindra & Mahindra up by 1.56% and Bajaj Auto up by 1.55%. On the flip side, Bharti Airtel down by 2.60%, SBI down by 2.02%, Lupin down by 1.82%, BHEL down by 1.67% and GAIL India down by 1.46% were the top losers. (Provisional)

Meanwhile, finance minister Arun Jaitley who is on a six day visit to Japan, has once again stated that India will attempt to keep the proposed Goods & Services Tax (GST) rate as moderate as possible and the government will push for passage of the bill introducing the levy in the upcoming monsoon session of Parliament

Jaitley told Japanese investors at a Make in India seminar organised by the Department of Industrial Policy & Promotion and the Confederation of Indian Industry that 'At what rate the GST Council will start it, I don't know...there have been recommendations which have been made by expert committees, including the one that the ministry of finance had set up. I'm sure we will try to keep rates as moderate as possible.”

He said that he intended to bring the Constitution amendment bill for GST for consideration of the Upper House in the monsoon session of Parliament, which starts next month. He further added that “he is reasonably hopeful of this being passed. The numbers are overwhelmingly in favour of GST...After the Constitution amendment is approved, there are three legislations that are required to be passed, two by the Central government and one by state assemblies.”

Finance Minister reacting to the upbeat GDP numbers also said that the government will push ahead with its reform agenda to retain the fastest growing large economy tag and help India move towards becoming “a more developed economy”. He added that India will maintain this paramount position of fastest growing economy in the world. And if we did that we can present ourself as a society which evolves from an emerging economy and moves towards a more developed economy.

The CNX Nifty ended at 8220.80, up by 1.85 points or 0.02% after trading in a range of 8209.85 and 8262.00. There were 26 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 3.49%, Kotak Mahindra Bank up by 3.08%, Tata Power up by 2.28%, Hindustan Unilever up by 1.92% and NTPC up by 1.83%. On the flip side, Idea Cellular down by 11.05%, Bharti Airtel down by 2.20%, SBI down by 1.97%, BHEL down by 1.71% and Lupin down by 1.71% were the top losers. (Provisional)

European markets were trading in green terrain; France’s CAC increased 16.88 points or 0.38% to 4,482.88, Germany’s DAX gained 43.8 points or 0.43% to 10,251.80 and UK’s FTSE 100 was up by 58.09 points or 0.94% to 6,243.70.

Asian equity markets ended higher on Friday as investors shrugged off OPEC's decision against an output cut and looked ahead to the release of the closely-watched monthly US jobs report tonight that could provide more clues on the timing of US rate increases. The US jobs report is expected to show an increase of about 158,000 jobs in May, with the jobless rate seen edging down to 4.9 percent. While a firmer close on Wall Street overnight and steadier commodity prices offered support, but gains were capped by a stronger yen and data showing slowing business activity growth in China for the second month in a row. Chinese shares posted their best weekly gain since March as hopes for inclusion of A-shares into the world's biggest indexes helped investors shrug off disappointing services sector data. Activity in China's services sector continued to expand in May, albeit at a slower pace, the latest survey from Caixin revealed a services PMI score of 51.2, underscoring fading growth momentum in the world's second-largest economy. Japanese shares eked out modest gains in thin trade despite the yen rising for the fourth consecutive session against the dollar.