Post Session: Quick Review

Indian equity benchmarks traded on a choppy note and closed in green for fourth consecutive day supported by a rally in Power and Bankex stocks. Recent corporate results have been better than expected. The benchmarks made a gap-up opening and traded in fine fettle in early deals as traders took some support with President Pranab Mukherjee’s statement that demonetization may have led to temporary slowdown in economy but it will bring more transparency in the system. Sentiments remained optimistic with the Finance Minister Arun Jaitley statement that the Indian economy is set to grow at a healthy rate in spite of the global economic slowdown in the coming years, because of three important initiatives taken by the present NDA Government. The minister added that JAM (jan dhan accounts, aadhaar cards and mobile phones) would make for financial inclusion, the GST for integrating India into one market and avoiding taxes on taxes and demonetization for removing black money from the system and integrating the shadow economy with the main economy. Investors expect big-ticket announcements in the upcoming Union Budget on February 1, including incentives for employment generation in labour intensive sectors and a plan for setting up coastal employment zones that would directly link tax incentives to job creation etc. Meanwhile, a report indicated that India has marginally improved its ranking in the graft watchdog Transparency International’s corruption perception index for 2016. The Berlin-based anti-graft organization has used World Bank data, the World Economic Forum and other institutions to rank 176 countries by perceived levels of corruption in public sector. India, China and Brazil with a score of 40 each figured in the 10 key economies in the mid-range. India’s score has improved by two points from 38 in 2015.

On the global front, Asian markets ended mixed, in holiday-thinned trade, while oil and the dollar retained gains in the wake of strong US corporate earnings. Japan’s Nikkei closed in green, after data showed December core consumer prices fell at the slowest annual pace in nearly a year, suggesting inflation should pick up in coming months. A private poll showed that the Bank of Japan is expected to leave its monetary policy settings unchanged, maintaining the current pace of bond-buying as well as holding its negative interest rate and long-term bond yield target steady amid signs of a more sure-footed economic recovery. European shares inched lower with UBS dragging bank stocks lower after posting a drop in full-year profit, while Britain’s biggest supermarket Tesco surged after agreeing a 3.7 billion-pound takeover.

Back home, mixed reaction were displayed in sugar stocks, on reports that Indian Sugar Mills’ Association (ISMA) revised downwards its estimates for sugar production during the 2016-17 season (October-September) to 213 lakh tones, in view of drought in key growing states of Maharashtra and Karnataka.

The BSE Sensex ended at 27868.80, up by 160.66 points or 0.58% after trading in a range of 27759.48 and 27980.39. There were 18 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.65%, while Small cap index was up by 0.49%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 2.10%, Bankex up by 1.49%, Consumer Durables up by 1.35%, PSU up by 1.29% and TECK up by 0.64%, while FMCG down by 1.43% and Realty down by 0.45% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 4.70%, ICICI Bank up by 4.66%, NTPC up by 3.18%, SBI up by 2.83% and Maruti Suzuki up by 2.08%. (Provisional)

On the flip side, ITC down by 2.74%, Lupin down by 1.54%, Tata Motors down by 1.42%, Wipro down by 1.39% and Hindustan Unilever down by 1.36% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) in the 76th round of its Industrial Outlook Survey (IOS) has indicated a decline in business sentiments. In the survey which was conducted during October-December 2016, RBI has said that business sentiments of the Indian manufacturing sector deteriorated in the third quarter of the current financial year and are likely to decline in the fourth quarter. The survey elicited response from 1221 manufacturing companies and was conducted during October-December 2016.

In third quarter, RBI has indicated slight moderation in the sentiments in demand condition for the second successive quarter. It said that in respect of several parameters like order books, capacity utilisation and imports, the level of optimism was lower in third quarter than second quarter. However, the level of optimism was more about the export performance, while optimism on production remained unchanged for the third quarter. The sentiment on profit margin remained largely unchanged due to reduced pessimism about the cost of finance and the cost of raw.

On business sentiments outlook in fourth quarter, the survey stated that they had largely followed similar pattern. However, in respect of demand condition (Order Books, Production), the outlook deteriorated. Further it said that pressure from rise in cost of raw material was expected to bring down profit margin. Improved sentiments were expressed in pending orders, exports, and cost of finance.

The CNX Nifty ended at 8641.95, up by 39.20 points or 0.46% after trading in a range of 8606.90 and 8672.70. There were 34 stocks advancing against 17 stocks declining on the index. (Provisional)

The top gainers on Nifty were BHEL up by 5.46%, Bharti Airtel up by 5.20%, ICICI Bank up by 4.19%, Bank of Baroda up by 3.67% and NTPC up by 3.33%. (Provisional)

On the flip side, ITC down by 3.01%, Bosch down by 1.77%, Wipro down by 1.59%, Lupin down by 1.53% and Tata Motors down by 1.50% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 2.38 points or 0.03% to 7,159.11, Germany’s DAX decreased 23.84 points or 0.2% to 11,824.79 and France’s CAC decreased 23.43 points or 0.48% to 4,843.81.

Asian equity markets made a mixed closing on Friday amid a deepening rift between the US and Mexico and ahead of US fourth-quarter advance GDP figures later in the day. Mexico's President Enrique Pena Nieto on Thursday scrapped his trip to Washington after US President Donald Trump signed an executive order to move forward on construction of a physical wall between the two countries and repeated his claim for Mexico to foot the bill. Trading volumes were relatively thin amid holidays in China, South Korea and Taiwan for the start of Lunar New Year. Chinese markets are closed through next Thursday. Meanwhile, Japanese shares ended higher on a weaker yen as the Bank of Japan surprised market participants by increasing its buying in five- to 10-year bonds in an attempt to bring down bond yields. Also, Japan's core consumer prices fell at the slowest annual pace in nearly a year in December, bringing some relief to the central bank, which has been struggling with deflationary pressures for quite some time.