Post Session: Quick Review

Indian equity benchmarks traded on lackluster note in a narrow range and ended below neutral line. The range bound trade continued throughout the day in the absence of domestic as well as global cues. The extent of impact of demonetization on third quarter corporate earnings would now chart the direction of the market in the coming days. The markets made a cautious start and traded near neutral line in early deals following the first advance estimates, released by the Central Statistics Office (CSO) on Friday reported that the economic growth is expected to be 7.1 percent in FY 2016-17 as compared to the growth rate of 7.6 percent in FY 2015-16. Manufacturing sector is estimated to grow by 7.4 percent as compared to growth of 9.3 percent in 2015-16. The growth rate in per capita income is estimated at 5.6 percent during 2016-17, as against 6.2 percent in the previous year. Some pressure also mounted after private research report highlighted that the decline in Gross Domestic Product (GDP) for the second half of the year is likely to be bleak than government estimates. It estimated 6 percent growth against the 6.7 percent estimate by the CSO for the second half of the current financial year. Separately, PHD Chamber of Commerce & Industry report raised concern that with businesses facing huge cash crunch, the centre’s demonetization drive will have a significant impact on the country’s economy in the near term. However, the benefits accruing from demonetization will help in sustaining the country's economic growth in the longer term. The downside was however capped as market participants got some confidence with Finance minister Arun Jaitley’s statement that the impact of demonetization on the economy would be transient but in the medium and long run, the GDP would be bigger and cleaner and it will also help lower interest rates. He also said that the Goods and Services Tax (GST), which will be implemented this year, will provide for better indirect tax administration. 

On the global front, Asian markets closed mostly lower, as caution prevailed before a news conference by President-elect Donald Trump scheduled on Wednesday, where his views on global trade and China will be carefully scrutinized for future policy implications. Chinese Vice Finance Minister Zhu Guangyao said that the country is confident to have reached an economic growth of 6.7 percent in 2016, within a targeted range set earlier in the year. China, which had been aiming for a 6.5-7 percent economic growth for 2016, boosted government spending, saw a housing rally and record high levels of bank lending last year, which, however, also led to an explosive increase in debt. European shares edged mostly higher, as a rise among basic resources stocks helped Britain’s FTSE 100 index hit a fresh record high.

The BSE Sensex ended at 26711.81, down by 47.42 points or 0.18% after trading in a range of 26701.18 and 26860.88. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.18%, while Small cap index was up by 0.45%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 0.83%, IT up by 0.53%, TECK up by 0.46%, FMCG up by 0.41% and Bankex up by 0.05%, while Oil & Gas down by 0.81%, Power down by 0.49%, PSU down by 0.44%, Metal down by 0.29% and Capital Goods down by 0.23% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 1.17%, TCS up by 0.94%, Maruti Suzuki up by 0.78%, Wipro up by 0.62% and Tata Steel up by 0.49%. (Provisional)
On the flip side, Dr. Reddy’s Lab down by 3.01%, ONGC down by 2.17%, Coal India down by 1.82%, Asian Paints down by 1.69% and Mahindra & Mahindra down by 1.65% were the top losers. (Provisional)

Meanwhile, highlighting benefits of Goods and Services Tax (GST) which is scheduled to be implemented this year, Finance Minister Arun Jaitley has said that GST will provide for better indirect tax administration. Jaitley has also said that GST being a more efficient law will check tax evasion.

Jaitley added that Narendra Modi’s government is treating the black money fight very seriously and in order to curb black money, National Democratic Alliance (NDA) Government has entered into agreements with the US, Switzerland, Mauritius, Cyprus and Singapore.

Finance minister has said that Income Declaration Scheme (IDS) 2016 was highly successful with a 45 percent tax, adding the PAN card requirement for cash transaction beyond Rs two lakh put hurdles on expenditure through black money. He also said that the Benami law legislated in 1988 and never implemented. But now it was amended and has been put into action.

The CNX Nifty ended at 8234.55, down by 9.25 points or 0.11% after trading in a range of 8227.75 and 8263.00. There were 21 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech up by 2.55%, Idea Cellular up by 2.06%, Eicher Motors up by 1.22%, TCS up by 1.17% and IndusInd Bank up by 1.16%. (Provisional)

On the flip side, Dr. Reddy’s Lab down by 3.14%, ONGC down by 2.15%, Coal India down by 1.99%, Asian Paints down by 1.86% and Hindalco down by 1.77% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 22.66 points or 0.33% to 6,954.21 and France’s CAC increased 28.59 points or 0.6% to 4,764.07, while Germany’s DAX decreased 57.82 points or 0.5% to 11,541.19.

Asian equity markets ended mostly in red on Monday, as investor caution grew before a news conference by President-elect Donald Trump on Wednesday, where his views on tax reform, infrastructure spending and China trade will come under close scrutiny. With China's yuan resuming its downward slide and oil prices edging lower in Asian deals on a stronger dollar amid renewed doubts about touted production cuts, investors were wary of making any big moves. The dollar stood tall against rivals after the latest US jobs report showed the 75th straight month of job growth, keeping the Federal Reserve on track to raise interest rates as much as three times this year. Friday’s Labor Department report painted a mixed picture of US employment. It showed that companies added a solid but slightly disappointing 156,000 jobs in December. On the other hand, hourly pay jumped 2.9 percent from the year before, which was the biggest monthly increase in seven years. For 2016 overall, job growth in the world’s biggest economy remained steady in 2016, although the pace was slower than in 2015. Meanwhile, Chinese shares ended higher, led by defense stocks as more central state-owned enterprises (SOEs) mulled plans to push mixed-ownership reforms. The Japanese markets were closed for the 'Coming of Age Day' holiday.