Post Session: Quick Review

Indian equity benchmarks traded on a firm note for most part of the day but market witnessed profit booking in last hour which dragged it down and ended the session in red. The market made a positive start in early deals as traders took support from a survey which highlighted that a significant majority of private equity firms in India are optimistic about stronger deal activity this year, with funds looking at financial services and healthcare as the top sectors for investment. Separately, terming demonetization as a credit positive for India in the medium term, global ratings agency Moody’s Investors Service in its report, on Indian credit, said that it will strengthen countries institutional framework by reducing tax avoidance and corruption. The report added that it should also result in efficiency gains through greater formalization of economic and financial activity, which would help broaden the tax base and expand usage of the financial system. However, Moody’s estimates growth to slow down to 6.4% in the January-March quarter, from 7% in the previous three months. Meanwhile, buoyed by higher-than-expected GDP growth, Finance Minister Arun Jaitley said that a 7 percent expansion in third quarter belies exaggerated claims of note ban impact on rural economy. But, with a 7 percent growth in gross domestic product (GDP) the worst fears for the economy have been put behind. Sluggishness gripped the market as investors may have looked to book profits taking note that demonetization has impacted capacity utilization, with spending on fresh capacity creation by companies postponed by around six months. Investors were also cautious with report that the latest official figures of GDP growth in India for the third quarter ended December do not accurately reflect the negative fallout of the ban on high value currency. A private report stated the inability of official statistics to capture the negative growth effects on the unorganized sectors, as the official numbers are based largely on organized sector data; the GDP growth estimate for Q4 2015 was also revised lower by 0.8 percentage points (pp) to 6.5% y-o-y from 7.2%, thereby creating a large favourable base effect for comparison.

On the global front, Asian markets closed mostly higher, as investors were encouraged by President Donald Trump’s measured tone in his first speech to Congress, which sent Wall Street stocks sharply higher. China’s newly appointed banking regulator vowed to strengthen supervision of the lending sector, underscoring Beijing’s determination to fend off financial risks and push forward with reforms this year. The European markets were trading in red pausing after a strong rally in the previous session. A senior member of the European Parliament said that exploiting loopholes in European Union rules could bar Britain from accessing the bloc’s securities markets after Brexit.

The BSE Sensex ended at 28823.82, down by 160.67 points or 0.55% after trading in a range of 28784.31 and 29145.62. There were 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.45%, while Small cap index was down by 1.21%. (Provisional)

The only gainer on BSE was Auto up by 0.37%, while Realty down by 4.19%, Power down by 1.96%, Utilities down by 1.88%, Telecom down by 1.68% and PSU down by 1.63% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 2.65%, Bajaj Auto up by 2.00%, Hero MotoCorp up by 1.57%, TCS up by 1.21% and Wipro up by 0.38%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 3.23%, NTPC down by 2.62%, Sun Pharma down by 2.49%, Mahindra & Mahindra down by 1.99% and Dr. Reddy’s Lab down by 1.98% were the top losers. (Provisional)

Meanwhile, amid the talks of India adopting 5G technology, which in present form can deliver up to 1000 mbps download speed, from this year, Telecom Regulatory Authority of India (Trai) chairman R S Sharma has said that India must make the most from the diverse applications under the upcoming 5G technology to solve some of its developmental problems in areas such as transport and agriculture.

5G is the next-generation mobile network which is expected to boost range and speed that the current 4G and 3G couldn’t cope to deliver. Telecom secretary J S Deepak had earlier said that India lagged behind in adoption of 3G and 4G but it wants to catch with the world for 5G technology.

Trai chief has suggested opting 5G technology as soon as possible, saying that “It's a fantastic technology and may help the government to solve some of its developmental problems in areas such as transport and agriculture”. He also said that 5G is an exciting area where application domains are going to be hugely diverse.

Mentioning use of 5G in various domains like transport, smart cities, agriculture and irrigation, Sharma pointed that individual domains must come ahead and explore the application scenarios of it. Further, he mentioned that the 2G/3G/4G applications are communication applications but 5G involves a use of technology in areas not traditionally connected with the communication system.

The CNX Nifty ended at 8893.90, down by 51.90 points or 0.58% after trading in a range of 8879.80 and 8992.50. There were 16 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors - DVR up by 2.91%, Tata Motors up by 2.70%, Bajaj Auto up by 2.53%, Ultratech Cement up by 2.35% and Hero MotoCorp up by 1.63%. (Provisional)

On the flip side, BPCL down by 4.31%, Idea Cellular down by 3.27%, Adani Ports & Special Economic Zone down by 2.89%, Sun Pharma down by 2.58% and NTPC down by 2.56% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 4.51 points or 0.06% to 7,378.39, Germany’s DAX decreased 10.97 points or 0.09% to 12,056.22 and France’s CAC decreased 1.6 points or 0.03% to 4,959.23.

Asian equity markets ended mostly higher on Thursday, with financials and material stocks leading gainers, after a rally on Wall Street overnight lifted the Dow Jones Industrial Average above the 21,000 mark for the first time ever. US President Donald Trump's much-anticipated debut address to Congress on Tuesday night offered little policy details on his stimulus plans, but investors were relieved by the President's more measured than expected tone and his apparent desire to pass an immigration reform bill that would give some illegal immigrants legal status. Meanwhile, Japan's Nikkei share average hit a 14-month peak as the yen weakened against the dollar on heightened expectations for the Federal Reserve to raise interest rates this month and after Wall Street soared to record highs. Though, Chinese shares ended lower after a string of hawkish remarks from Federal Reserve officials stirred concerns that an interest rate hike in the US could trigger fresh capital outflows and hurt domestic liquidity.