Post Session: Quick Review

Indian equity benchmarks traded below neutral line for most part of the day and ended in red. Benchmarks got some momentum and traded above neutral line in late afternoon session but selling in Banking, IT and TECK stocks dragged the indices lower. The markets made a soft start in early deals in absence of sufficient global cues as most of the Asian markets were shut for trade today. Banking stocks were under pressure after Prime Minister Narendra Modi asked banks to prioritize their lending towards the poor and middle class. The banks lowering the lending rate are good for ultimate demand but at the same time, it is going to cause a hit on banks. Foreign portfolio investors continued to remain net sellers in domestic equity markets on Friday as they sold shares worth a net Rs 585.64 crore on December 30, 2016, as per provisional data released by the stock exchanges. The sentiments were under pressure after industry body, Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report highlighted that banning of high value notes would lower growth rate due to economic slowdown in the third and fourth quarters of fiscal 2016-17. Apex industry body admitted that it was not easy to predict precisely the impact of note withdrawal with far-reaching implications and also said that the growth momentum would be restored by the normal monsoon raising agricultural growth and rural demand. Some pressure also built up after India’s manufacturing PMI (purchase manager’s index) fell in December 2016 as demonetization took its toll on the economy. The headline seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) recorded below the crucial 50 threshold for the first time in 2016 during December. Down from 52.3 in November to 49.6, the latest reading was indicative of a marginal deterioration in the health of the sector. Nevertheless, the average over the October-December quarter (52.1) was broadly in line with that seen in the July-September period (52.2).

On the global front, Asian markets were closed on account of trading holiday except South Korean market which closed tad lower. South Korean shares and the won got off to a muted start to 2017 with investors awaiting the release of US Federal Reserve meeting minutes and December jobs data for near-term trading clues. China’s outstanding foreign debt rose 3 percent in the third quarter, data from the foreign exchange regulator showed, quickening from a 2.2 percent rise in the second quarter. Overall foreign debt continued a rebound seen in the second quarter, indicating that the deleveraging process in our country's foreign debt is basically over. The European markets were trading in green. Spain Economy Minister stated that the country’s economic growth may have exceeded the 3.2% pace officially projected by the government for 2016.

Back home, shares of realty companies like DLF, HDIL, Unitech, Godrej Properties, Omaxe, Sobha Developers and Oberoi Realty closed in green after Prime Minister Narendra Modi on December 31 announced that loans of up to Rs 9 lakh taken in the new year under the new scheme of Pradhan Mantri Awas Yojana will receive interest subvention of 4% and loan of up to Rs 12 lakh will get a 3% interest waiver. Oil marketing companies like Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) closed in green after they increased petrol prices by Rs 1.29 a litre - the third increase in a month and diesel price by 97 paise a litre - the second hike in a fortnight.

The BSE Sensex ended at 26560.54, down by 65.92 points or 0.25% after trading in a range of 26447.06 and 26720.98. 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 0.91%, while Small cap index was up by 1.29%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 4.38%, Metal up by 2.05%, Auto up by 1.99%, Consumer Durables up by 1.47% and Capital Goods up by 0.84%, while Bankex down by 1.24%, IT down by 0.43%, TECK down by 0.27% and FMCG down by 0.20% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 3.57%, Mahindra & Mahindra up by 3.42%, Tata Motors up by 3.11%, Maruti Suzuki up by 2.80% and Adani Ports & Special Economic Zone up by 2.01%. (Provisional)

On the flip side, HDFC down by 3.36%, SBI down by 2.52%, Bajaj Auto down by 1.51%, ICICI Bank down by 1.29% and Infosys down by 1.05% were the top losers. (Provisional)

Meanwhile, Finance Ministry in its year-end review has stated that India retained its position as one of the fastest growing major economies in the world, as the Indian economy grew 7.2 per cent in the first half of the current fiscal. The ministry said that the stress given to fiscal consolidation through expenditure rationalisation and revenue-raising efforts and the focus on administrative measures for cooperative financial governance and steps towards containing inflation have contributed significantly to macro-economic stability.

The report pointed out that the economic growth has continued to be robust even though the global economy remained sluggish and recent rise in petroleum prices. It said that the government has undertaken a number of policy measures including enhanced public investment, kick starting stalled projects, improving governance through systemic changes like open auction for natural resources, and improving business environment. Further, the government has also liberalised and simplified the foreign direct investment (FDI) policy in the sectors like defence, railway infrastructure, construction and pharmaceuticals etc.

Talking about inflation, the report said that it has remained in comfort zone during the year with retail & wholesale inflation averaging 5.2% and 2.7%, respectively, in the April-October period, while fiscal deficit & current account deficit as percentage of GDP improved and the growth rates for agriculture and allied sectors, industry and services sectors during the six-month period are estimated at 2.5 per cent, 5.6 per cent, and 9.2 percent, respectively. During April-October period of the ongoing fiscal, trade deficit decreased to $ 53.2 billion from $ 78.2 billion a year ago.

The CNX Nifty ended at 8179.20, down by 6.60 points or 0.08% after trading in a range of 8133.80 and 8212.00. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ambuja Cement up by 3.97%, Ultratech Cement up by 3.84%, Tata Steel up by 3.82%, Mahindra & Mahindra up by 3.78% and Eicher Motors up by 3.27%. (Provisional)

On the flip side, HDFC down by 3.62%, Bank of Baroda down by 2.87%, SBI down by 2.66%, IndusInd Bank down by 1.87% and ICICI Bank down by 1.19% were the top losers. (Provisional)

The European markets were trading in green; Germany’s DAX increased 93.61 points or 0.82% to 11,574.67 and France’s CAC increased 12.22 points or 0.25% to 4,874.53. London Stock Exchange was closed for the day on account of ‘New Year’s Day’ holiday.

The only major Asian markets trading today ‘Seoul Composite’ ended almost unchanged on Monday, the first trading session of the year, amid concerns that China may retaliate against the decision to deploy an advanced anti-missile defense system on South Korean soil. Other major Asian financial markets, including Japan, China and Hong Kong, were shut for the New Year’s holiday.

South Korea’s Seoul Composite ended tad lower by 0.30 points or 0.01% to 2,026.16.