Post Session: Quick Review

Indian equity benchmarks remained directionless for most part of the day and ended the volatile session on flat note. The trade remained under pressure after GST Council meet concluded with no consensus on dual control. The gains were tempered by caution ahead of corporate results and the government’s annual budget. The markets made a positive start in early deals taking support with the industry body, Associated Chambers of Commerce and Industry of India (ASSOCHAM) statement that to drive economic growth, the focus should now be on effective implementation of the steps announced by Prime Minister Narendra Modi in his address to the nation on New Year’s Eve, as they are extremely positive for the Indian economy. Prime Minister had announced major tax rebates for the poor, farmers, small traders, senior citizens and women. Expressing hope that the country will recover in FY18, Vice-Chairman of the NITI Aayog, Arvind Panagariya has said that the second half of the current fiscal will see some decline in the growth due to demonetization of high value currency notes, but the country would make up for growth rate decline in FY 2017-18. However, some pressure built in after India’s services industry ended 2016 on a sour note, contracting for a second month in a row in December as orders shrank amid a severe cash shortage. The Nikkei/Markit Services Purchasing Managers’ Index was little changed at 46.8 in December from November’s 46.7. A new business sub-index, an indicator of domestic and foreign demand, fell to a 39-month low of 46.0 in December from 46.7, even though firms cut prices of their goods despite input costs rising at a faster pace. The GST Council in its concluding two-day meet has reached a stalemate on dual control between Centre and states. With no consensus being reached in the all-crucial meet, the implementation of the Goods & Service Tax (GST) Bill on April 1 looks impossible. Many states are now pushing the Centre for a grand bargain of sorts, seeking higher compensation for revenue loss on account of demonetization. The states are demanding a compensation of Rs 55,000 crore in case of any losses.

On the global front, Asian markets closed mostly higher, with Japanese equities kicked off the New Year sharply higher, leading the region’s gains amid a robust outlook for the US economy, coupled with expectations of continued yen weakness. The Nikkei Japan Manufacturing Purchasing Managers’ Index, a key measure of manufacturing activity, rose to 52.4 in December from 51.3 in November, the highest reading since December 2015. The European markets struggled to push further into bull-market territory on Wednesday, with bank stocks rising, but major retailers capping gains. Euro zone consumer prices grew faster than expected in December, an estimate from the European Union’s statistics office Eurostat showed, driven mainly by higher costs of energy, as well as food, alcohol and tobacco and services.

The BSE Sensex ended at 26637.60, down by 5.64 points or 0.02% after trading in a range of 26606.06 and 26723.37. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.09%, while Small cap index was up by 0.48%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.24%, TECK up by 0.98%, IT up by 0.89%, Consumer Durables up by 0.84% and Capital Goods up by 0.73%, while Bankex down by 0.69%, FMCG down by 0.33% and Oil & Gas down by 0.30% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 3.31%, ONGC up by 1.69%, Bajaj Auto up by 1.64%, Wipro up by 1.40% and Tata Motors up by 1.27%. (Provisional)

On the flip side, Reliance Industries down by 1.78%, Hindustan Unilever down by 1.21%, ICICI Bank down by 1.06%, Cipla down by 0.93% and Lupin down by 0.85% were the top losers. (Provisional)

Meanwhile, raising the voice for the leather and plantation industry, Commerce and industry ministry has asked the GST council to keep the labour intensive sectors like leather and plantation completely out of the tax block or put them at least at a low tax rate of around five per cent under the proposed goods and services tax (GST) since it has the potential for labour absorption and export growth.

The Ministry put similar demand of lower GST rate for cement sector as taxation is very high currently in this sector which plays an important role in national infrastructure building and boosting the national housing scheme for the poor. The ministry also sought the lowest slab for the services sectors that earn foreign exchange such as tourism, travel, hospitality and health. It asked for a cut in the import duty for gold too, as it is a critical raw material for the gems and jewellery sector.

To ensure that working capital of exporters do not get blocked, the Commerce Ministry has asked for exemption for those who import raw material and machinery duty-free rather than compensating them with refunds at a later stage. For Special Economic Zones, the Commerce Ministry has sought exemption from Integrated GST (IGST) imposition on movement of goods from an SEZ to another in a different State.

The CNX Nifty ended at 8196.35, up by 4.10 points or 0.05% after trading in a range of 8180.90 and 8218.50. There were 24 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 3.24%, Bharti Infratel up by 3.15%, HCL Tech up by 2.89%, Bajaj Auto up by 2.86% and Wipro up by 2.15%. (Provisional)

On the flip side, Reliance Industries down by 2.04%, Kotak Mahindra Bank down by 1.93%, ACC down by 1.84%, Bosch down by 1.50% and Ambuja Cement down by 1.49% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 1.37 points or 0.02% to 7,176.52, Germany’s DAX decreased 22.37 points or 0.19% to 11,561.87 and France’s CAC decreased 0.76 points or 0.02% to 4,898.57.

Asian equity markets ended mostly higher on Wednesday, with Japanese shares leading regional gains as trading resumed after a long holiday weekend. The yen softened in the wake of upbeat global economic data and the latest survey from Nikkei revealing its gauge of Japan's manufacturing activity hit a one-year high in December on the back of a sharp rise in production as well as new orders. A firm undertone prevailed as oil recovered some lost ground ahead of US stockpile data and upbeat economic reports from the US, China and Europe bolstered optimism about the 2017 economic outlook. Further, Chinese shares ended higher as improving liquidity in money markets and moderating interest rates lifted market sentiment.