Post Session: Quick Review

Indian equity benchmarks traded with volatility and closed in red ahead of US President Donald Trump’s speech. Investors were eyeing the third quarter growth rates and the revised advance estimate for GDP growth in 2016-17 to be released later in the day. The Central Statistics Office is due to unveil the revised advance estimate for GDP growth for 2016-17 after factoring in the note ban impact in the December quarter. The market traded cautiously but in positive terrain in early deals as traders took support from Finance Minister Arun Jaitley’s statement that India has potential to grow faster and plans are underway to reduce poverty and create jobs in rural areas. As per economic affairs secretary Shaktikanta Das the Goods and Services Tax (GST) will be implemented by July 1 and not later as feared earlier on. The GST will replace a plethora of cascading central, state, interstate and local taxes with a single, nationwide, value-added tax on goods and services. The secretary added that positive effects of demonetization will be visible from April and the completion of remonetization process will drive consumption going forward. Sentiments turned pessimistic with India Ratings and Research’s (Ind-Ra’s) estimates that aggregate fiscal deficit of Indian states will increase marginally to 3.3% of gross domestic product (GDP) in FY18 from its forecast of 3.2% for FY17. It expects states’ debt/GDP ratio may increase marginally to 24.3% in FY’18 from 24% forecasted for FY’17. Separately, Paris-based think tank OECD cut India’s growth forecast to 7% for 2016-17 in view of demonetization, but said the pace will accelerate to 7.3% in the next fiscal. The organization forecast the country’s economic growth to rise further to 7.7% in 2018-19. The Organization for Economic Cooperation and Development (OECD) had in February last year projected the country’s economy to expand at 7.4 per cent in 2016-17.

On the global front, Asian markets closed mixed, as investors awaited a speech by US President Donald Trump for signals on tax reform and infrastructure spending. Japan’s industrial output unexpectedly fell in January for the first time in six months, pressured by a slowdown in shipments of cars to the United States in a sign of an economy grappling for a more sure-footed recovery. European stocks were trading on mixed note and near the unchanged line as investors digested a wave of earnings reports.

Back home, select logistics stocks closed in green taking support from Economic affairs secretary Shashikanta Das statement that GST will be implemented by July 1 this year. Logistics sector is seen as the biggest beneficiary of the GST implementation.

The BSE Sensex ended at 28763.34, down by 49.54 points or 0.17% after trading in a range of 28721.12 and 28876.54. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.18%, while Small cap index was up by 0.63%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.20%, Realty up by 1.64%, Basic Materials up by 0.78%, Capital Goods up by 0.64% and Power up by 0.50%, while Oil & Gas down by 1.26%, Energy down by 0.95%, FMCG down by 0.45%, IT down by 0.38% and PSU down by 0.34% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 3.50%, Asian Paints up by 2.34%, Adani Ports & Special Economic Zone up by 1.70%, Mahindra & Mahindra up by 1.26% and Lupin up by 0.77%. (Provisional)

On the flip side, Coal India down by 2.52%, Bajaj Auto down by 1.74%, NTPC down by 1.30%, Hero MotoCorp down by 1.21% and ITC down by 1.08% were the top losers. (Provisional)

Meanwhile, in order to push implementation of various schemes in the urban sector, the Urban Development Ministry has recommended a six-fold increase in reform incentive fund to over Rs 3,000 crore annually over the next three years. 

The government will provide these incentives by ranking the cities based on performance under five reforms which are - getting credit ratings, initiatives for value capturing finances, adopting ‘trust and verify’ method, land title reforms and bringing in professionalism in municipalities. These set of reforms were recommended by a group of secretaries for bringing in transformation in the urban sector.

The Ministry has proposed to increase ‘reform incentive fund’ from Rs 500 crore during 2017-18 to over Rs 3,000 crore per year over the next three years of implementation period. Earlier, in 2016-17, the government had distributed about Rs 400 crore for those who pursued reforms indicated in AMRUT guidelines.

Moreover, with an aim to cut down on delays for granting permission by adopting ‘grant approvals first and verify later’ approach, the Urban Development Ministry has come out with implementation framework in respect of these reforms under which it targets to provide online approval facility for building construction in all 4,041 cities and towns by 2019-20.

The CNX Nifty ended at 8875.20, down by 21.50 points or 0.24% after trading in a range of 8867.60 and 8914.75. There were 20 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were BHEL up by 6.02%, Bharti Airtel up by 3.61%, Asian Paints up by 2.38%, Yes Bank up by 2.11% and Hindalco up by 1.96%. (Provisional)

On the flip side, BPCL down by 5.40%, Grasim Industries down by 3.40%, Coal India down by 2.55%, Bajaj Auto down by 1.50% and NTPC down by 1.45% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 2.58 points or 0.04% to 7,250.42, Germany’s DAX decreased 9.46 points or 0.08% to 11,813.21, while France’s CAC increased 1.5 points or 0.03% to 4,846.68.

Asian equity markets ended on a mixed note on Tuesday as investors awaited US President Donald Trump's address before a joint session of Congress tonight, where he is expected to lay out plans for pro-business policies including tax reform, health care and infrastructure spending. Chinese shares ended higher in thin trading after Trump said the United States attaches great importance to cooperative relations with China. Japanese shares too inched higher despite a stronger yen and comments from BOJ Governor Haruhiko Kuroda that Japan was still distant from achieving its 2 percent inflation target. The day's economic reports also painted a mixed picture, with Japan's industrial output declining for the first time in six months in January, while housing starts expanded at a faster pace and retail sales increased for a third straight month. Meanwhile, the Taiwanese market was closed for the Peace Memorial Day holiday.