Post Session: Quick Review

Indian equity benchmarks traded on volatile note and ended the session in green near the lowest point of the day. Firm trade on expectations of an interest rate cut by the central bank aided sentiment but final hour of selling erased gains and closed near neutral line. The analytical comments from the RBI will be extremely important since the impact of demonetization on economy and corporate performance could be much more severe than anticipated unless currency disbursements improve and liquidity returns to the system quickly. The market made a positive start in early deals taking cues from regional counterparts as most Asian markets jumped in early trade following an overnight rise in US stocks. The rupee strengthened against the US dollar in early trade at the interbank foreign exchange on increased selling of the greenback by exporters and banks amid higher opening in the domestic equity market. Prime Minister Narendra Modi stated that India’s economy is expected to grow five folds by 2040, the government expects growth in manufacturing, transport, civil aviation among other sectors. Modi said while global economy is going through uncertainty, India has shown tremendous resilience. Indian economy is more stable than others with investment in India at the highest levels. The country's current account deficit has improved steadily. Investors will be keeping an eye on RBI monetary policy review scheduled on Wednesday whereby the street expects Reserve Bank Governor Urjit Patel to again go in for a 0.25% interest rate cut with an aim to cushion the impact of demonetization. The six-member Monetary Policy Committee (MPC) began its deliberations amid widespread expectations of at least 0.25 percent (25-basis point) cut in the policy rate to cushion the impact of demonetization. This will be the first monetary policy review after demonetization of old Rs 500 and Rs 1,000 currency notes following which banks witnessed surge in deposits.

On the global front, Asian markets ended mostly in green, as sentiment was boosted after rating agency Standard & Poor’s said the outcome of Italian referendum would not have an immediate impact on Italy's creditworthiness. China stocks edged lower, as investors contemplated the possible repercussions on trade from scathing comments by a top securities regulator about barbaric takeovers. European stocks kicked in a muted fashion as investors continued to digest the outcome of the Italian referendum, with the country’s bank stocks clawing back some ground following heavy losses in the previous session.

The BSE Sensex ended at 26379.63, up by 30.53 points or 0.12% after trading in a range of 26356.02 and 26502.43. 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 0.52%, while Small cap index was up by 0.40%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.42%, Oil & Gas up by 1.22%, Metal up by 0.78%, PSU up by 0.59% and Power up by 0.51%, while Consumer Durables down by 0.91%, FMCG down by 0.84% and Auto down by 0.41% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were HDFC up by 2.04%, Adani Ports & Special Economic Zone up by 1.39%, ONGC up by 1.32%, SBI up by 1.21% and Tata Steel up by 1.20%. (Provisional)

On the flip side, Maruti Suzuki down by 1.43%, Power Grid down by 1.27%, Hindustan Unilever down by 1.24%, Axis Bank down by 1.13% and ITC down by 1.01% were the top losers. (Provisional)

Meanwhile, one more step ahead to promote digital transactions, Finance Ministry has made compulsory for all government departments to make payments through e-Payment facility and not in cash if the order value exceeds Rs 5000. The ministry has lowered the limit for making such payments to Rs 5000 from Rs 10000 earlier.
Ministry of Finance in a release has directed all the ministries and government departments to ensure with immediate effect that all payments above Rs 5000 to suppliers, contractors, grantee/loanee institutions etc. are made by issue of payment advises only. In this regard, the government has instructed, all public sector and private sector banks to waive the transaction cost for all payments made through debit cards. The road transport ministry has asked vehicle manufacturers to provide a digital tag on all new cars for e-payments at toll plazas and check posts.

After the Prime Minister Narendra Modi’s surprise decision to demonetise old Rs 500 and Rs 1000 notes, the Central government has taken a number of initiatives to promote cashless digital transactions. Recently, Economic Affairs Secretary Shaktikanta Das had said all government offices have been asked to use only digital payment method for making payments to stakeholders, contractors and employees.

The CNX Nifty ended at 8134.20, up by 5.45 points or 0.07% after trading in a range of 8133.80 and 8178.70. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Power up by 2.80%, Idea Cellular up by 2.00%, HDFC up by 1.91%, BPCL up by 1.46% and Tata Steel up by 1.20%. (Provisional)
On the flip side, Bosch down by 2.11%, Bharti Infratel down by 2.07%, HCL Tech down by 1.57%, Maruti Suzuki down by 1.36% and Eicher Motors down by 1.31% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 11.23 points or 0.11% to 10,696.06 and France’s CAC increased 8.93 points or 0.2% to 4,583.25, while UK’s FTSE 100 decreased 6.94 points or 0.1% to 6,739.89.

Most of the Asian markets made a positive closing on Tuesday as investors brushed off the Italian referendum result and turned their focus to a highly anticipated ECB meeting this week, with most economists expecting the central bank to expand its quantitative easing program beyond the first quarter of 2017. Japanese shares closed higher after solid gains on Wall Street overnight. Though, Chinese shares bucked the positive trend on concerns surrounding a tighter regulatory environment, a day after Liu Shiyu, Chairman of the China Securities Regulatory Commission (CSRC), warned against ‘barbaric’ share acquisitions. The China Insurance Regulatory Commission has suspended Foresea Life Insurance Company from selling new life insurance policies and proposing new products, further denting investor sentiment.