Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day on Monday and closed in green near the highest point of the day with gain of around three-fourth  of a percent. Investors opted for bargain-hunting as well as short-covering ahead of derivatives expiry this week. The equity benchmarks made a cautious start and traded slightly in green in early deals as uncertainty over US fiscal and monetary policies kept the momentum tepid. Traders took support with the news that the GST Council on Saturday approved a law to compensate states for any loss of revenue from the implementation of the new national sales tax but deferred approval for enabling laws to the next meeting. The council will meet again on March 4 and 5 to approve the legally vetted draft of the supporting legislations for Central GST (C-GST) and Integrated GST (I- GST), days before the start of the second leg of the Budget Session. A joint study carried out by the Associated Chambers of Commerce & Industry of India (ASSOCHAM) and global advisory firm Ernst & Young (EY), stated that the government’s demonetization move has led to widespread adoption of online payment and is expected to have a positive long term impact on the economy through better tax compliance, increase in the tax to GDP ratio and higher tax collections.

Some support also came with report that overseas investors have pumped in over Rs 9,500 crore ($1.4 billion) into the country’s capital markets this month so far, enthused by clarity on FPI taxation. According to depository data, Foreign Portfolio Investors (FPIs) infused a net sum of Rs 3,002 crore in equities during February 1-17 and another Rs 6,559 crore in the debt segment, translating into a total inflow of Rs 9,561 crore ($1.42 billion). Domestic Institutional Investors (DIIs) were net buyers in the equity markets on Friday, as they bought shares worth Rs 499.2 crore with gross purchases and gross sales of Rs 1,694 crore and Rs 1,194.8 crore, respectively. On a month-to-date basis, they have bought shares worth Rs 1,445.7 crore till February 17. The latest government figures which showed that savings due to Direct Benefit Transfer (DBT) over the last three years have touched Rs 50,000 crore as on December 31, 2016. This amount is equivalent to the subsidy paid out under DBT in this financial year, implying nearly a year’s subsidy was saved. Presently, 84 schemes in 17 ministries are covered under the DBT, up from 34 schemes as on March 31, 2015.

On the global front, Asian markets closed mostly higher, with Tokyo shares erased morning losses and Hong Kong equities resumed its rally. Japan’s exports rose in January at a slower pace than the previous month due to a decline in shipments to the US and the Lunar New Year holidays and as concerns about growing trade protectionism cast doubts over the outlook. European shares were trading mostly in green helped by stronger telecoms stocks, but a slump in Unilever following Kraft Heinz’s abrupt withdrawal of its $143 billion bid for its larger rival weighed on the broader market.

Back home, telecom shares closed in green on media report that Vodafone Group would likely finalize talks for a merger with Idea Cellular within a month. Meanwhile, Tata Teleservices (Maharashtra) rose on reports that the company was seeking to be part of an entity that would include Reliance Communications, Aircel and MTS.

The BSE Sensex ended at 28681.94, up by 213.19 points or 0.75% after trading in a range of 28419.27 and 28691.02. There were 22 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.61%, while Small cap index was up by 0.83%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 2.07%, Metal up by 1.93%, TECK up by 1.88%, Utilities up by 1.42% and PSU up by 1.17%, while FMCG down by 0.21% was the sole loser on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 4.44%, Tata Steel up by 3.84%, GAIL India up by 3.13%, HDFC Bank up by 2.60% and Infosys up by 2.03%. (Provisional)

On the flip side, Axis Bank down by 1.91%, ITC down by 1.10%, Dr. Reddy’s Lab down by 0.68%, HDFC down by 0.58% and ICICI Bank down by 0.37% were the top losers. (Provisional)

Meanwhile, India’s coal imports fell in January by 21.7 per cent to 14.31 million tonnes (MT) against 18.28 MT in the same month last year, on the back of sufficient availability of fuel with the power utilities.

As per mjunction services, an online procurement and sales platform floated jointly by SAIL and Tata Steel, coal imports were lower in January because in power sector, the state utilities are replete with stock and are aiming to curb imports altogether (except for coast-based plants) by March 2017. Besides, there was decrease in non-coking coal imports in January 2017 compared to December 2016 since non-power sector consumers stopped restocking the material after steam coal prices reversed its declining trend midway through January.

Earlier, in September 2016, the government had said that it was working on a plan to end dependency on coal imports in next 3-4 months in order to facilitate consumption of the surplus fossil fuel produced by Coal India (CIL). In 2015-16, CIL which accounts for over 80% of domestic output, achieved a record production of 536 MT, which was 42 MT more than the previous fiscal.

The CNX Nifty ended at 8884.25, up by 62.55 points or 0.71% after trading in a range of 8809.80 and 8886.25. There were 35 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were TCS up by 4.20%, Tata Steel up by 3.89%, Infosys up by 3.09%, GAIL India up by 2.90% and BPCL up by 2.80%. (Provisional)

On the flip side, Axis Bank down by 1.88%, Bosch down by 0.95%, ITC down by 0.76%, Dr. Reddy’s Lab down by 0.73% and Tech Mahindra down by 0.70% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 60.96 points or 0.52% to 11,817.98, France’s CAC increased 7.27 points or 0.15% to 4,874.85, while UK’s FTSE 100 decreased 2.21 points or 0.03% to 7,297.75.

Asian equity markets ended mostly higher on Monday as the yen weakened after Japanese trade balance figures missed expectations, and oil prices held steady after posting their first weekly decline in five weeks on concerns over rising production and swelling stockpiles in the US. Reports showed that Japan posted a merchandise trade deficit of 1,086.9 billion yen in January as exports slowed down from the previous months due to a decline in US exports and the timing of Chinese New Year holidays. That missed forecasts for a shortfall of 625.9 billion yen following the 640.4 billion yen deficit in December. Chinese shares ended higher after reports that pension funds are entering the stock market. Investor sentiment was also boosted after China's securities regulator unveiled new rules on Friday restricting excessive and frequent fundraising by some listed companies. Japanese shares eked out small gains in a choppy session marked by low volumes as investors stayed on the sidelines with the US markets closed for a holiday. Though, a lack of clarity on the timing and scope of promised pro-growth policies from the Trump administration and the probability of a US rate hike as early as March kept a lid on gains across the region. The Federal Reserve will release the minutes of its last monetary policy meeting on Wednesday, with investors looking for further clues on Fed's assessment of the economic conditions and the timing of the next rate hike.