Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day ahead of earnings season and macroeconomic numbers due this week. The benchmarks snapped two-day falling streak in absence of domestic as well as global cues and ended in green. The markets made a positive start in early deals receiving support with Finance Minister Arun Jaitley’s statement dismissing the slowdown concerns, that higher tax mop up indicates uptick in economic activity. He said that demonetised notes had no role to play in the tax collections for December as people were allowed to pay taxes in the spiked currency only in November and the indirect and direct tax collections between April and December this year increased by 25 percent and 12.01 percent respectively compared to the same period last year. Some support also came with the global rating agency, Moody’s report which maintained positive outlook on India and said beyond the short-term negative impact on growth, demonetisation has the potential to raise government revenues and provide some fiscal space to support growth if required. The report enlightened that measures including relaxation of foreign investment restrictions, passage of the Goods and Services Tax, and advancement of a workable bankruptcy code have potential to stimulate private sector investment, which could lead to stable, balanced growth and gradually lower the government debt burden. Moody’s Investor Service has also said in its latest report titled ‘Asia Pacific: 2017 Outlook’ that ongoing implementation of reforms in India is likely to boost medium-term growth. It also said that government’s capacity to implement reforms and policy effectiveness will decide India’s rating going forward. The rating agency has maintained a positive outlook on India's rating (Baa3) in November 2016 based on expectation that economic and institutional reforms will support continued robust growth.

On the global front, Asian markets closed mixed, as investors sentiments soured after oil prices plunged as much as 4 percent overnight. Investors are awaiting remarks from key US policymakers this week, including Fed Chair Janet Yellen and President-elect Donald Trump. China’s main indexes closed lower, as investors took profits after a recent strong rally fuelled by reforms hopes. Investors appeared to shrug off data showing producer prices surged the most in more than five years in December, as prices of coal and other raw materials soared. Japan stocks closed lower as losses in the Paper & Pulp, Railway & Bus and Real Estate sectors led shares lower. European stocks were trading mostly lower with London FTSE’s reaching yet another record high thanks to a weak pound.

The BSE Sensex ended at 26890.67, up by 164.12 points or 0.61% after trading in a range of 26804.17 and 26914.95. There were 22 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.83%, while Small cap index was up by 0.71%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.35%, Auto up by 1.23%, Capital Goods up by 1.22%, Consumer Durables up by 0.95% and Power up by 0.86%, while Realty down by 0.47% was the sole losing index on BSE. (Provisional)

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 3.20%, Tata Motors up by 2.98%, Tata Steel up by 2.10%, HDFC Bank up by 1.68% and Asian Paints up by 1.62%. (Provisional)

On the flip side, Axis Bank down by 1.19%, Dr. Reddy’s Lab down by 0.52%, HDFC down by 0.32%, NTPC down by 0.31% and Lupin down by 0.25% were the top losers. (Provisional)

Meanwhile, the global rating agency, Moody’s Investor Service in its latest report titled ‘Asia Pacific: 2017 Outlook’ has said that ongoing implementation of reforms in India is likely to boost medium-term growth. It also said that government's capacity to implement reforms and policy effectiveness will decide India's rating going forward. The rating agency has maintained a positive outlook on India's rating (Baa3) in November 2016 based on expectation that economic and institutional reforms will support continued robust growth.

According to the report, beyond the short-term negative impact on growth, demonetisation has the potential to raise government revenues and provide some fiscal space to support growth if required. The report said that measures including relaxation of foreign investment restrictions, passage of the Goods and Services Tax, and advancement of a workable bankruptcy code have potential to stimulate private sector investment, which could lead to stable, balanced growth and gradually lower the government debt burden.

Moody’s said that the 2017 outlook creditworthiness of sovereigns in Asia Pacific is stable. The rating agency further said that the capacity of governments to implement measures and the effectiveness of policies in achieving the respective governments' objectives will shape the sovereigns' credit profiles over the coming year. It also said that in addition to external trade and financing pressures, a key driver of sovereign credit trends will be the policy efforts of governments themselves. Further, rising income levels and strengthening institutions will offer support to several sovereign credit profiles in the region.

The CNX Nifty ended at 8290.30, up by 54.25 points or 0.66% after trading in a range of 8261.00 and 8293.80. There were 37 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 4.46%, Adani Ports & Special Economic Zone up by 3.35%, Tata Motors up by 3.32%, Tata Motors - DVR up by 2.93% and Tata Steel up by 2.36%. (Provisional)

On the flip side, Grasim Industries down by 1.10%, Axis Bank down by 1.09%, ACC down by 0.63%, Dr. Reddy’s Lab down by 0.59% and Cipla down by 0.52% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 9.36 points or 0.08% to 11,554.63, France’s CAC decreased 3.73 points or 0.08% to 4,883.84, while UK’s FTSE 100 increased 11.88 points or 0.16% to 7,249.65.

Asian equity markets ended on a mixed note on Tuesday as oil prices steadied following steep overnight losses and the dollar remained broadly weaker despite worries over the likelihood of a ‘hard Brexit’ and the prospect of more rate hikes in the US this year. Japan's Nikkei share average ended lower with a strengthening yen weighing on exporter shares, although hopes that US President-elect Donald Trump would provide hints about stimulus at an upcoming speech helped curb the losses. China's Shanghai Composite index declined as investors booked some profits after recent sharp gains on hopes of reforms in state-owned enterprises. Mixed inflation data also dented investor sentiment. China's consumer inflation rose an annual 2.1 percent in December, the National Bureau of Statistics said, falling below expectations for 2.2 percent and down from 2.3 percent in November. Producer prices jumped 5.5 percent from a year earlier versus expectations for a 4.6 percent gain. Though, Hong Kong stocks hit a one-month high as Chinese commodity prices rallied, offsetting pressure from profit taking in some state-owned enterprises (SOEs) which rose last week on restructuring hopes.