Post Session: Quick Review

Indian equity benchmarks altered between negative and positive territory throughout the day and ended the session slightly above the neutral line after a strong Budget rally in previous session. The global outcomes still remains a source of worry for the market even after budget announcement. Global recourse such as US President Donald Trump’s policy changes on visa and healthcare front can fuel instability/volatility in the local markets which could be a cause of concern. The markets made a cautious start and traded near neutral lines in early deals amid weak Asian cues. Investors read the fine-prints whereby Finance minister Arun Jaitley came out with a low-key Budget on Wednesday which in his words set out to Transform, Energize and Clean India. Jaitley though maintained fiscal prudence in the Budget, the foreign investors may have some renewed interest as the Finance Minister tweaked the domestic transfer pricing rules and exempted some FPIs from indirect transfer provision. He also further clarified the GAAR rules. Traders took some support following Niti Aayog vice-chairman Arvind Panagariya expressing hope that the economic growth in the next fiscal year would be in the range of 7-7.5 percent.

Some support also came with a private report which highlighted that India is expected to clock a GDP growth of 7.1 percent in 2017-18, up from 6.3 percent in 2016-17, as the country gets sufficiently remonetised and the schemes in the Budget play a supportive role. The uptick in the growth numbers would be largely driven by the remonetisation process which is expected by April end, as this in turn would boost the consumption levels in the country. Separately, S&P Global Ratings said that Union Budget 2017-18 shows India’s commitment to improve fiscal performance but heavy debt burden and weak public finances remain key rating constraints. Finance Minister Arun Jaitley presented the Budget for next fiscal in Parliament yesterday in which he planned to cut fiscal deficit to 3.2 percent and 3 percent of GDP for next financial year and 2018-19 respectively. The deficit in the current fiscal is estimated to be 3.5 percent of GDP.

On the global front, Asian markets ended mostly in red, on tensions between Iran and the US, over a ballistic missile test by Tehran this week and even the tenor of President Donald Trump’s phone calls with world leaders. Japan’s Nikkei share average fell to its lowest in more than a week after a stronger yen soured sentiments. Japanese policymakers rejected Trump’s charges of currency manipulation on Wednesday. Prime Minister Shinzo Abe defended the Bank of Japan’s huge stimulus program and said it was to reflate the economy and was not currency manipulation. European stocks were trading under pressure as investors awaited a fresh batch of corporate earnings, as well as the Bank of England’s policy decision and a speech by European Central Bank President Mario Draghi.

The BSE Sensex ended at 28184.78, up by 43.14 points or 0.15% after trading in a range of 28070.81 and 28299.92. There were 16 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.76%, while Small cap index was up by 0.89%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.90%, IT up by 1.51%, TECK up by 1.44%, PSU up by 0.84% and FMCG up by 0.60%, while Auto down by 1.19%, Capital Goods down by 1.01% and Bankex down by 0.01% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Dr. Reddy’s Lab up by 3.57%, Coal India up by 2.86%, Sun Pharma up by 2.50%, Bharti Airtel up by 2.30% and Infosys up by 1.89%. (Provisional)

On the flip side, Mahindra & Mahindra down by 2.51%, Tata Motors down by 1.83%, GAIL India down by 1.54%, Larsen & Toubro down by 1.46% and Bajaj Auto down by 1.37% were the top losers. (Provisional)

Meanwhile, in the Union Budget 2017-2018, Finance Minister Arun Jaitley has announced that government will be introducing a new and restructured central scheme, namely, Trade Infrastructure for Export Scheme (TIES) to boost export infrastructure. It will give relief to Indian exporters who are facing huge challenges due to inadequate infrastructure which pushes their transactions costs, impacting competitiveness of Indian goods in the global markets.

The new scheme, TIES will come into operation from the next financial year, 2017-18 and will replace a similar initiative called ASIDE (Assistance to States for Infrastructure Development of Exports) which was discontinued by the centre in 2015-16, when states’ share in net proceeds of union tax revenues was increased to 42% from 32%, in line with the 14th Finance Commission’s recommendations.

Federation of Indian Export Organisations (FIEO) has said that the scheme will help in modernising infrastructure in states for exporters like last mile connectivity to ports, testing labs and certification centres.

The CNX Nifty ended at 8722.30, up by 5.90 points or 0.07% after trading in a range of 8685.80 and 8757.60. There were 25 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.20%, Aurobindo Pharma up by 3.15%, Tech Mahindra up by 2.58%, Sun Pharma up by 2.47% and Bharti Airtel up by 2.41%. (Provisional)

On the flip side, Hindalco down by 2.87%, Mahindra & Mahindra down by 2.79%, ACC down by 2.69%, Bosch down by 2.14% and IndusInd Bank down by 2.09% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 6.58 points or 0.09% to 7,101.07, Germany’s DAX decreased 36.65 points or 0.31% to 11,622.85 and France’s CAC decreased 2.58 points or 0.05% to 4,792.00.

Asian equity markets ended mostly lower on Thursday, with a firmer yen sending Japanese shares tumbling. Trading sentiments weakened further on uncertainty about what US President Donald Trump means for the global economy. The Federal Reserve's Open Market Committee on Wednesday reiterated its expectations for moderate economic growth while leaving benchmark interest rates unchanged, in line with expectations. The statement noted improvements in consumer and business sentiment while cautioning that market-based measures of inflation compensation are ‘still low’. The dollar remained on the defensive as Fed policymakers offered little clarity on the possible impact of Trump's economic policies on interest rate outlook. Chinese markets remained closed for the Lunar New Year holidays.