Post Session: Quick Review

Indian equity benchmarks traded on a choppy note and ended modestly in red but marked its third straight weekly gains. The fall in IT and Technology stocks dragged the market below neutral line with Nifty closing below 8400 mark, while Banks extended their rally as they are flushed with deposits after India late last year banned higher-value banknotes and Energy stocks rose as crude oil edged up, supported by reports on details about OPEC output cuts. The rupee traded weak against the US dollar on account of brisk buying of the American currency by banks and importers. The greenback got a slight boost after the US Federal Chair Janet Yellen said the economy was doing well and faced no serious obstacles in the short term, with the labour market looking pretty strong. Retail inflation softened further to nearly three-year low of 3.41% in December, reflecting weakness in demand as consumers grappled with cash crunch following demonetization.

The markets pared initial gains and entered into red terrain in early deals with private report highlighting that India’s GDP growth numbers are expected to see a decline of 2% in the third and fourth quarters of the current fiscal, as effective currency in circulation has contracted significantly. The report stated that the government’s decision to abolish old stock of high denomination currency (demonetization) and issue new notes (remonetisation) could have a mixed impact on the macro economy over a year. The downside was however arrested with report that the Index of Industrial Production (IIP) rose to a 13-month high of 5.7% in November, belying expectations of an adverse impact from demonetization and against a contraction of 1.8% in October. Also, the Inflation measured by the Consumer Price Index (CPI) eased to 3.41% in December versus 3.63% seen in November 2016, mainly due to softening of food prices.

On the global front, Asian markets closed mostly in red, as investors were disappointed with China’s trade data. Customs data showed that Chinese exports sank 6.1 percent in December from a year earlier. In November, China’s exports eked out a 0.1 percent expansion after shrinking for nine straight months. Imports rose 3.1 percent from a year earlier. European stocks were trading higher as sentiments mildly improved, while markets digested recent remarks by US President-elect Donald Trump and uncertainties surrounding his future policies.

Back home, select tyre companies stocks like Apollo Tyres, MRF, Ceat and Goodyear India closed in red on back of rising cost of natural rubber, a key component in tyre makers’ input cost.

The BSE Sensex ended at 27228.47, down by 18.69 points or 0.07% after trading in a range of 27143.07 and 27459.75. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.07%, while Small cap index was down by 0.03%.  (Provisional)

The few gaining sectoral indices on the BSE were FMCG up by 1.26%, Bankex up by 0.33% and Oil & Gas up by 0.22%, while IT down by 2.14%, TECK down by 1.92%, Auto down by 0.82%, Realty down by 0.64% and Power down by 0.58% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 3.50%, ITC up by 2.35%, GAIL India up by 2.15%, HDFC up by 1.91% and Sun Pharma up by 1.09%.  (Provisional)

On the flip side, TCS down by 3.98%, Infosys down by 2.71%, NTPC down by 1.81%, Maruti Suzuki down by 1.59% and Dr. Reddy’s Lab down by 1.15% were the top losers. (Provisional)

Meanwhile, describing the aim of new Bankruptcy and Insolvency Code, Insolvency and Bankruptcy Board of India (IBBI) said that the new code would not deal with corporate frauds and inter managerial disputes but will allow creditors and other stakeholders to go for a health check of the corporate at the first available opportunity. The code aims at time bound resolution for insolvency and exit as part of the ease of doing business.

Noting over the newly enacted code, IBBI chairman M S Sahoo has said that any creditor or even employee can trigger the process if debt repayment default is Rs 1 lakh or above. He added that the code will drive growth of debt market in India, which hardly exists in corporate and business financing. Though the country has a matured and bullish equity market, the debt market in India was yet to develop. The board was not concerned with default in bank credits or about the rising NPAs. It would mainly look into private creditors interest if their money got locked.

Sahoo also said that the board is also working on a framework for direct liquidation by passing insolvency resolution and the framework would be ready by February- March. But to begin the process on code a company has to address to the National Company Law Tribunal (NCLT), while for personal insolvency, a claimant will have to go to the Debt Recovery Tribunal (DRT). But the framework for personal insolvency was not yet ready and it would take some time before a party could move the DRT.

The CNX Nifty ended at 8398.30, down by 8.90 points or 0.11% after trading in a range of 8373.15 and 8461.05. There were 19 stocks advancing against 32 stocks declining on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 3.78%, ITC up by 2.41%, GAIL India up by 2.34%, HDFC up by 2.04% and Tech Mahindra up by 1.40%.  (Provisional)
On the flip side, Idea Cellular down by 4.37%, TCS down by 4.11%, Hindalco down by 2.77%, Infosys down by 2.70% and NTPC down by 1.55% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 27.51 points or 0.38% to 7,319.88, Germany’s DAX increased 53.09 points or 0.46% to 11,574.13 and France’s CAC increased 24.83 points or 0.51% to 4,888.80.

Asian equity markets ended mostly in red on Friday, with Chinese shares ended lower following trade data out of China that disappointed on exports. Reports from the General Administration of Customs showed that China's exports fell an annual 6.1 percent in December, exceeding forecast for a decrease of 4.0 percent. Imports grew 3.1 percent annually in the month, just above the expectations of 3.0 percent climb. Sentiments dampened further tracking weak cues from Wall Street where stocks declined overnight after President-elect Donald Trump failed to provide details on fiscal policies that were expected to bolster the economy. However, oil extended overnight gains and the dollar edged up from a five-week low versus the yen, helping limit overall losses in the region.