Post Session: Quick Review

Indian equity benchmarks traded in a narrow range throughout the day and ended in green. The trade was choppy led by gains in the IT index after Donald Trump did not announce any stringent rules for H1B visa. Trump’s widely-awaited press conference on Wednesday provided little clarity on future economic policies, disappointing investors who expected him to shed some light on the policies he intends to incorporate to boost US economy. He did not make any announcements on potentially tougher visa rules for software services exporters, a concern for the sector ever since his election. Traders took support with Finance Minister Arun Jaitley’s statement that the implementation of the Goods and Services Tax (GST), coupled with a digitised economy ushered in by demonetization, will make India’s economy look much cleaner and bigger. Jaitley reiterated that the Centre is still aiming to roll out the GST regime from April 1 if all pending issues are sorted out. Separately, Niti Aayog sought up to three times increase in social sector spending, partially by cutting down on the mega subsidies that the government doles out every year as well as diverting the extra revenue earned over the next three years to sectors such as health and education. The 12th Five-Year Plan appraisal document, prepared by NITI Aayog has made a strong case for clear tax policies and focus on manufacturing, even as it exuded confidence that growth in 2016-17, the final year of the Plan would be 7 percent to 7.75 percent. The appraisal document for the 12th Five Year Plan (2012-17), prepared by NITI Aayog without taking into account impact of demonetization, also talked about 8 percent growth under the optimistic scenario, but it may not be possible now.

On the global front, Asian markets closed mostly in red. Japan stocks closed in red as losses in the Real Estate, Food and Fishery sectors led shares lower. China’s main indexes slid for the third session as investors remained cautious ahead of the Lunar New Year holidays and as small-cap companies settled at a fresh 10-month low. Government officials said that China’s economy has been generally stable at the start of the year, continuing the momentum from second-half 2016, but also noting a challenging and complicated trade outlook for 2017. European shares fell weighed down by a drop among healthcare stocks after US President-Elect Donald Trump targeted pharmaceuticals’ drug pricing in a press conference.

Back home, select pharma stocks closed in red tracking global fall in drug firms following criticism by Donald Trump. Trump said pharmaceutical companies are ‘getting away with murder’ in what they charge the government for medicines. Footwear stocks Relaxo Footwears, Lawreshwar Polymers, Liberty Shoes and Superhouse closed firm, on repot that government may announce package for leather sector in forthcoming Budget.  The government is expected to announce an incentive package for labour intensive leather sector in the forthcoming Budget with a view to give a boost to the segment and generate jobs. The commerce and industry ministry has asked its finance counterpart to give financial assistance for the Indian Leather Development Programme (ILDP) and for setting up of mega leather clusters in the country.

The BSE Sensex ended at 27250.49, up by 110.08 points or 0.41% after trading in a range of 27166.69 and 27278.93. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.20%, while Small cap index was down by 0.14%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 3.17%, IT up by 2.00%, TECK up by 1.64%, Capital Goods up by 1.50% and PSU up by 1.06%, while FMCG down by 0.90%, Auto down by 0.19% and Realty down by 0.01% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 5.84%, Power Grid up by 4.03%, Infosys up by 3.20%, Larsen & Toubro up by 2.58% and Wipro up by 1.66%. (Provisional)

On the flip side, Lupin down by 2.06%, Hindustan Unilever down by 1.77%, Coal India down by 1.22%, ITC down by 1.21% and Mahindra & Mahindra down by 1.14% were the top losers. (Provisional)

Meanwhile, Finance Ministry has said that the government garnered Rs 23,500 crore by divesting its stakes in Public Sector Undertakings (PSUs) so far in the current fiscal against the projected disinvestment target of Rs 56,500 crore for the entire fiscal. Ministry also said that the government is confident of raising Rs 45,000-50,000 crore from stake sales in state-run firms in 2016-17 and has already drawn up plans to ensure that it inches closer to the target.

Ministry has said that buyback of shares undertaken for the first time by central public sector enterprises for disinvestment which fetched Rs 15,000 crore so far in the current fiscal. It further said that they have done minority stake sale and buyback this time and they have a strong pipeline of 40-odd listed companies. It added that government has now moved to OFS (offer for sale) model from FPO (follow-on public offer) model. Thus, there is no loss to the government and exchange-traded fund (ETF) was one of the instruments which helped them to do that.

Out of the Rs 56,500 crore target for 2016-17, Rs 36,000 was to be raised from minority stake sales and Rs 20,500 crore from strategic stake sales. This was lower than the Rs 69,500 crore target set for the previous year. So far, the government has raised Rs 23,528.7 crore, which includes Rs 21,432.4 crore through minority stake sale in 14 state firms and Rs 2,096.3 crore through strategic disinvestment. The total realisation of Rs 21,432.4 crore by November 2016 through CPSEs' disinvestment receipts, constitutes around 60% of the budgeted target of Rs 36,000 crore to be raised from minority stake sales.

The CNX Nifty ended at 8409.15, up by 28.50 points or 0.34% after trading in a range of 8382.30 and 8417.20. There were 21 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 5.71%, Power Grid up by 4.50%, Infosys up by 3.39%, Tata Power up by 2.99% and Larsen & Toubro up by 2.66%. (Provisional)

On the flip side, Idea Cellular down by 3.35%, Lupin down by 1.82%, Hindustan Unilever down by 1.61%, Mahindra & Mahindra down by 1.58% and Aurobindo Pharma down by 1.52% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 19.94 points or 0.27% to 7,270.55, Germany’s DAX decreased 66.55 points or 0.57% to 11,579.62 and France’s CAC decreased 21.98 points or 0.45% to 4,866.73.

Asian equity markets ended mostly in red on Thursday, with Japanese shares coming under heavy selling pressure, as the yen continued to surge and shares of drug makers dropped following Trump's comments on drug pricing. Trump brief failed to offer more clarity around his stimulus plans and trade policies at the news conference, disappointing some investors who had hoped for more details on his plans to cut taxes and reduce regulation. Further, Chinese shares ended lower as investors moved to the sidelines ahead of the Lunar New Year holidays starting on Jan 27.