Post Session: Quick Review

Indian equity benchmarks traded in red for most part of the day but witnessed buying by participants in last hour of trade which pulled the market above neutral line and ended the session in green. The market recovered from the day’s lows and closed almost flat with Nifty closing above 8900 mark. The market made a weak start in early deals as traders were concerned that the US Federal Reserve will raise interest rates at its next monetary policy meeting later this month, which could lead to foreign fund outflow from the emerging markets. Some selling also crept in after a research report by brokerage firm notified that the third quarter GDP or gross domestic product, numbers may have been inadvertently exaggerated by the Central Statistical Organisation (CSO) as there was no clear gauge for the informal sector. Investors took cautious approach after the GST Council proposed to raise the peak tax rate to 40 percent after the GST Council proposed raising the peak rate in the Bill to 20 percent, from the current 14 percent, in the model goods and services tax (GST) Bill, to obviate the need for approaching Parliament for any change in rates in future. This is only an enabling provision and the highest rate levied on goods will still be 28% (14% central GST and 14% state GST). The demerit and luxury goods will attract higher 28 rate plus cess. This provision will also allow the government to remove the cess at some stage and instead have a higher GST rate only, which will make for a neater GST.

However, buying crept in on reports that India’s services industry rebound in February for the first time in four months. The Nikkei/IHS Markit Services Purchasing Managers’ Index rose to 50.3 in February from 48.7 in January, marginally above the 50-mark that separates growth from contraction. The index had declined to a near-three year low in November after the demonetization drive which washed away 86% of cash out of circulation. Separately, even as the government came under attack from several skeptics that challenged its 7% GDP growth in December quarter CII has come in favour of the government.

On the global front, Asian markets closed lower, ahead of a speech by US Federal Reserve Chair Janet Yellen. Japan’s core consumer prices rose for the first time in over a year in January due to a pickup in energy costs and private consumption, offering some hope for the central bank's efforts in accelerating inflation to its 2 percent target. Data in China showed the Caixin services PMI edged down o 52.6, well below the 53.3 seen as consumer spending during the Chinese New Year holidays may not have been as robust as expected. European stocks were lower on Friday, as investors continued to lock in profits from significant gains posted earlier in the week. Euro zone monthly retail sales fell in January for the third consecutive month, against market expectations of a rise.

Back home, sugar stocks close in green with report that sugar production will fell by 19% to 16.24 million tonnes during the first five months of the 2016-17 marketing year ending September on account of lower cane supply in drought-hit states like Maharashtra and Karnataka.

The BSE Sensex ended at 28853.93, up by 14.14 points or 0.05% after trading in a range of 28716.21 and 28860.13. 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 0.29%, while Small cap index was up by 0.41%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 1.28%, Oil & Gas up by 1.21%, Energy up by 1.16%, Utilities up by 1.12% and TECK up by 0.85%, while FMCG down by 0.32%, Auto down by 0.19%, Bankex down by 0.16% and Capital Goods down by 0.05% were the losers on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 3.59%, Reliance Industries up by 2.12%, Hero MotoCorp up by 1.50%, Sun Pharma up by 1.46% and Axis Bank up by 1.29%. (Provisional)

On the flip side, HDFC down by 1.84%, Asian Paints down by 1.25%, ITC down by 0.91%, ICICI Bank down by 0.79% and SBI down by 0.67% were the top losers. (Provisional)

Meanwhile, with an aim to provide better business environment by removing obstacles, the government is likely to soon relax foreign direct investment (FDI) policy in select sectors, including single brand retail. This move is part of the Union Budget for 2017-18 announced by Finance Minister Arun Jaitley on February 1, 2017.
Union Minister Harsimrat Kaur Badal has stated that the government will consider the proposal made by foreign retailers for allowing non-food items like homecare products under the policy. The government is also considering a proposal to increase FDI limit in print media from 26 percent to 49 percent. Besides, in order to attract more global players in single brand retail sector, a proposal to allow 100 per cent FDI through the automatic route in the sector is also under consideration.

FDI in India has increased by 22 percent to $35.85 billion during April-December 2016. Earlier, the government had relaxed FDI norms in over a dozen sectors, including defence, civil aviation, construction and development, private security agencies, real estate and news broadcasting. Foreign investments are considered essential for India, which needs around $1 trillion to overhaul its infrastructure such as ports, airports and highways to boost growth. Foreign investments will help improve the country's balance of payments situation and strengthen the value of the rupee against global currencies, especially the US dollar.

The CNX Nifty ended at 8902.20, up by 2.45 points or 0.03% after trading in a range of 8860.10 and 8907.10. There were 24 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 6.14%, Hindalco up by 4.96%, GAIL India up by 3.53%, Grasim Industries up by 2.66% and Reliance Industries up by 1.73%. (Provisional)

On the flip side, Bosch down by 2.08%, HDFC down by 2.04%, Ambuja Cement down by 1.55%, Asian Paints down by 1.34% and Eicher Motors down by 1.20% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 22.4 points or 0.3% to 7,359.95, Germany’s DAX decreased 53.24 points or 0.44% to 12,006.33 and France’s CAC decreased 7.64 points or 0.15% to 4,956.16.

Asian equity markets ended lower on Friday after Wall Street pulled back from a record overnight, on growing expectations of an interest rate hike by the Federal Reserve at its March 14-15 policy meeting. Japanese shares fell as the yen strengthened after four days of losses and a raft of data painted a mixed picture of the world's third-largest economy. In the latest sign of an uptick in inflation around the world, Japan's core consumer prices rose for the first time in over a year in January. The jobless rate dropped to 3.0 percent from 3.1 percent in December, while household spending fell for the 11th straight month, indicating the country's economic recovery remains fragile. The Markit/Nikkei Japan services PMI slipped to 51.3 in February from 51.9 in January. Further, Chinese shares slipped ahead of the opening of National People's Congress' annual session. While the largely ceremonial legislature is expected to steer clear of dramatic reforms, leaders may announce new measures to rein in debt and tighten oversight of financial markets.