Indian benchmarks end volatile session with modest gains

A session after showcasing a vivacious rally and amassing close to two percent, Indian benchmark indices consolidated on Thursday and ended the day with modest gains. The session was characterized by extreme volatility as the frontline indices went through a rollercoaster ride amid lack of direction and a pandemonium around global equity markets. Sentiments got some support from Niti Aayog vice-chairman Arvind Panagariya’s expectation that the India’s economic growth in the next fiscal year would be in the range of 7-7.5%. Furthermore, a private report also highlighting that India is expected to clock a GDP growth of 7.1% in 2017-18, up from 6.3% 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. Meanwhile, 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 has pegged the fiscal deficit for 2017-18 at 3.2%, down from 3.5% expected in the current financial year.

On the global front, Asian equity markets ended mostly lower on Thursday, as the Fed reiterated its intention to lift rates gradually as the labour market tightens, acknowledging rising confidence among U.S. consumers and businesses. Investors will now be looking towards Friday’s jobs report after the uncertainty created during Donald Trump’s first two weeks in office, brought equity indices down from record highs. Japan and Hong Kong led losses among Asian equity markets. 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 also weigh on sentiments. Meanwhile, European stocks fell in early trade, trimming some of the sharp gains made in the previous session, as investors eyed corporate earnings and waited for the latest economic assessments from the Bank of England.

Back home, after getting positive start, the local indices failed to capitalize on the initial momentum and continued to see-saw around the neutral line for most part of morning trades, and even drifted deeper into the red terrain in noon session. Thereafter, the key indices tried hard to claw back into the green terrain in late afternoon session but fresh bouts of profit booking again brought the indices to lower levels by the end of trade. Eventually the NSE’s 50-share broadly followed index Nifty, got buttressed by close to quarter percent to settle below the crucial 8,750 support level, while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over eighty points and closed above the psychological 28,200 mark. Moreover, the broader markets managed a touch better than the larger peers today as the BSE’s midcap and smallcap indices settled with gains of 0.92% and 0.95% respectively. On the BSE sectoral space, IT stocks recovered in today’s trade, up 1.7% (IT index) after falling as much as 4% in the previous two sessions on visa concerns. Furthermore, oil & gas stocks extended their yesterday’s gains as finance minister Arun Jaitley announced to create an integrated public sector oil major after merging the oil sector PSUs across the value chain in order to enhance their capacity to bear higher risks. The move will be positive for all public oil marketing companies (OMCs) and upstream companies. However, Auto stocks dropped after reporting lower January sales, with the BSE Auto index falling over 1%.

The market breadth remained optimistic, as there were 1582 shares on the gaining side against 1222 shares on the losing side, while 134 shares remained unchanged.

Finally, the BSE Sensex gained 84.97 points or 0.30% to 28226.61, while the CNX Nifty was up by 17.85 points or 0.20% to 8,734.25. 

The BSE Sensex touched a high and a low of 28299.92 and 28070.81, respectively and there were 15 stocks on gainers side against 15 stocks on the losers side on the index.
The broader indices ended in green; the BSE Mid cap index jumped 0.92%, while Small cap index was up by 0.95%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.18%, IT up by 1.78%, TECK up by 1.68%, PSU up by 0.96% and FMCG up by 0.76%, while Auto down by 1.07% and Capital Goods down by 0.79% were the only losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 3.31%, Sun Pharma up by 2.64%, Bharti Airtel up by 2.45%, Coal India up by 2.30% and Infosys up by 2.05%. On the flip side, Mahindra & Mahindra down by 2.49%, Tata Motors down by 2.00%, GAIL India down by 1.61%, Bajaj Auto down by 1.20% and Larsen & Toubro down by 1.17% were the top losers.

Meanwhile, Reserve Bank of India has warned the public against use of virtual currencies such as Bitcoins, pointing out that it has not authorised trading or usage of virtual currencies. In a latest statement, the central bank said that “it has not given any licence/authorisation to any entity/company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader etc. dealing with virtual currencies will be doing so at their own risk.”

It has also drawn attention to a December 2013 notification cautioning the investors against the same and has stated that those investing in such virtual currencies are exposing themselves to potential financial, operational, legal, customer protection and security related risks.

In order to create awareness among investors, RBI in December 2013 had issued a notification stating that the virtual currencies stored in e- wallets are prone to losses arising out of hacking and there is no established regulatory framework for recourse to customer problems or disputes. Further, central bank had also flagged issues surrounding valuation and said that those who trade on unregulated platforms face legal and financial risks.

The CNX Nifty traded in a range of 8,757.60 and 8,685.80. There were 25 stocks in green as against 26 stocks in red on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.20%, Tech Mahindra up by 3.18%, Aurobindo Pharma up by 3.15%, Sun Pharma up by 2.47% and Coal India up by 2.41%. On the flip side, Hindalco down by 2.87%, Mahindra & Mahindra down by 2.79%, ACC down by 2.69%, Bosch down by 2.34% and Yes Bank down by 1.95% were the top losers.

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.