Post Session: Quick Review

Indian equity benchmarks traded on a jubilant note and closed in green for third consecutive day. The equity benchmarks rose to touch near two and half month high led by gains in Banking and Consumer Durables stocks. The benchmarks extended their rally on account of rollover of long position to the next month series on the final trading day of expiry of January Futures & Options contracts. Markets are generally excited about results declared by some finance companies as the numbers have not shown any major impact of demonetization. The markets traded in fine fettle in early deals taking encouragement with report that Donald Trump and Narendra Modi have discussed opportunities to strengthen the partnership between the United States and India in broad areas such as the economy and defense. Some support also came with a private report which said that the Indian government is expected to continue with fiscal consolidation and deliver a popular, but not a populist budget with a fiscal deficit target of 3% in 2017-18. Separately, another report highlighted that the forthcoming Union Budget is likely to stay away from any harsh measures amid heightened economic uncertainty and the country facing considerable challenges from the demonetization induced demand shock. Meanwhile, a high-level committee on digital payments has suggested a tax to discourage cash transactions, a cap on the maximum allowable limit for large-size cash transactions and a complete abolition of charges on card payments to incentivize digital transactions. Indian financial markets will be closed tomorrow on Thursday i.e. on January 26, 2017 on account of Republic Day holiday.

On the global front, Asian markets closed mostly in green, as investors welcomed US President Donald Trump’s eagerness to deliver on his campaign promises, coupled with better than expected Japanese exports data and South Korean GDP figures. Japan’s exports rose for the first time in 15 months in December on strong sales of electronics and car parts, a positive sign for the export-reliant economy even as US protectionism threatens to hurt trade across the region and dent external demand. China stocks rose for the fourth straight day although optimism over improving corporate earnings was offset by a surprise increase in rates on medium-term loans. European stocks moved sharply higher on Wednesday, amid fresh earnings reports and as investors eyed the release of German business climate data due later in the day.

Back home, telecom stocks displayed mixed reactions after Bharti Airtel registered its lowest bottom line figures in four years as demonetization and intense competition with Reliance Jio hit revenues. Consolidated net profit in October-December quarter declined nearly 55 percent to Rs 503.7 crore as against Rs 1,108.1 crore in the same period a year ago. The street expects that time is not easy for these companies, as the kind of onslaught seen from Reliance Jio is going to continue which would put pressure on their margins.

The BSE Sensex ended at 27688.07, up by 312.49 points or 1.14% after trading in a range of 27439.68 and 27736.83. There were 23 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.89%, while Small cap index was up by 0.84%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 2.31%, Consumer Durables up by 2.17%, Realty up by 1.72%, PSU up by 1.57% an Oil & Gas up by 1.56%, while IT down by 0.21%, TECK down by 0.08% and Power down by 0.07% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were HDFC up by 3.96%, Adani Ports & Special Economic Zone up by 3.67%, Hero MotoCorp up by 3.15%, Axis Bank up by 3.00% and Coal India up by 2.67%. (Provisional)

On the flip side, Wipro down by 1.27%, Bharti Airtel down by 1.26%, Reliance Industries down by 1.04%, Sun Pharma down by 0.96% and Infosys down by 0.88% were the top losers. (Provisional)

Meanwhile, a committee on digital payments formed to promote digitalization and chaired by Chief Minister Chandrababu Naidu in its interim report submitted to Prime Minister Narendra Modi at Niti Ayog has made various suggestions. The panel has recommended eliminating the Merchant Discount Rate charges (MDR) to make digital payments cheaper than cash. Panel has suggested banking cash transaction tax on transaction of Rs 50,000 and above. Further it suggested bringing all government insurance, educational institutes, fertilisers, PDS and petroleum sectors within the ambit of digital payments. 

To boost digital payments, panel has suggested to provide Aadhaar-enabled micro ATM infrastructure for 1.54 lakh post offices and 50 per cent subsidy on Aadhaar Pay, Biometric (FP & Iris) sensors should be given to all merchant points. Further panel has said that all payment banks and banking correspondents should be made interoperable through AEPS.

Naidu said that there are lots of cost of handling physical currency because of its printing, movement and security while there is no such cost for digital currency and said that with the increase of volume of digital transitions. The panel made a case for relief in prospective taxes for encouraging merchants to accept digital payments and no retrospective taxation to Merchants doing digital transactions.

The CNX Nifty ended at 8597.50, up by 121.70 points or 1.44% after trading in a range of 8493.95 and 8612.60. There were 40 stocks advancing against 11 stocks declining on the index. (Provisional)

The top gainers on Nifty were Kotak Mahindra Bank up by 6.80%, Bosch up by 4.62%, BPCL up by 4.51%, Bank of Baroda up by 4.36% and Adani Ports & Special Economic Zone up by 4.04%. (Provisional)

On the flip side, Wipro down by 1.35%, Bharti Airtel down by 1.33%, HCL Technologies down by 1.20%, Infosys down by 1.01% and Aurobindo Pharma down by 0.93% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 17.21 points or 0.24% to 7,167.55, Germany’s DAX increased 130.55 points or 1.13% to 11,725.49 and France’s CAC increased 45.33 points or 0.94% to 4,875.36.

Asian equity markets ended mostly in green on Wednesday, with positive data out of Japan and South Korea, as well as overnight gains in the US on optimism for economic growth supporting underlying sentiment. Japanese shares rose sharply amid a broad-based rally across all sectors after official data showed Japan's exports rose for the first time in 15 months in December, helping Prime Minister Shinzo Abe's efforts to revive the economy. Further, Chinese shares ended higher despite the country's central bank increasing interest rates on medium-term loans ahead of Lunar New Year public holidays. Taiwan Stock Exchange was closed on account of ‘Non Trading Day’.