Indian benchmarks end marginally higher ahead of assembly elections results

Indian benchmark indices give up most of their early gains to close marginally higher on Friday, amid profit taking in selective frontline stocks. Today’s session largely remained characterized by consolidation as the aimless indices moved only sideways in a tight band ahead of Assembly poll results of five states on Saturday. Sentiments got some support after various exit polls suggested the Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) may comfortably cross the majority mark of 202 in the 403-seat UP Assembly, or come close to it. As for other states, most exit polls said the BJP was likely to retain power in Goa and wrest power from the Congress in Uttarakhand.  Further, investors got some comfort with the report that the government's revenue collection from indirect tax during April-February grew by an impressive 22.2%, while that of direct tax rose by 10.7%. Total direct and indirect tax collections at February end stood at Rs 13.89 lakh crore, 81.5% of the target of Rs 16.99 lakh crore, as per the revised estimate for 2016-17. However, gains remained capped with CRISIL’s report that a revival in private sector investment cycle is likely to be deferred to fiscal 2019 as there is ample headroom in capacity utilization, stretched balance sheets and just a moderate pick-up in demand. In the next fiscal year ending March 2018, CRISIL predicts only a mild recovery due to an absence of fiscal and monetary stimuli and unsupportive global environment.  Meanwhile, Telecom stocks gained traction on the report that the government is set to go for 5G spectrum auction this year -making an early move to initiate rollout of latest communications technologies. The government will also go for a fresh auction in 700 MHz band, which drew a blank last year as companies complained of high reserve price. Further, some auto stocks surged after the Vehicle sales across categories registered a marginal increase at 17,19,699 units in February 2017 from 17,03,736 in the same month last year. Domestic passenger vehicle sales rose by 9.01% y-o-y to 255,359 units in February, while Sales of commercial vehicles moved up 7.34% to 66,939 units in February. On the other hand, shares of gold loan companies like Manappuram Finance edged lower after the Reserve Bank of India (RBI) said NBFCs cannot lend more than Rs 20,000 in cash against gold. Earlier, NBFCs were allowed to disburse high value loans of Rs 1 lakh and above against gold only through cheque.

On the global front, Asian equity markets concluded the first full week of March on optimistic note as oil prices rebounded from three-month lows and the European Central Bank upgraded its growth and inflation forecasts for the euro area, while signaling little urgency to ease policy again in the light of improving economic outlook. Japanese market edged higher as exporters benefitted from the dollar hitting a six-week high against the yen, while investors waited for a US jobs report that could pave the way for a rate hike as early as next week. However, Chinese stocks declined as the country's central bank skipped its open market operations for a second straight day to help ease pressure on liquidity in the banking system. Meanwhile, European stocks rose, heading for their biggest advance in more than a week, as energy shares gained with the price of oil.

Back home, after gap up opening, the local benchmarks showed some strength in early trades, but the sentiments turned pessimistic in late morning trades and indices started drifting lower, however the markets regained their momentum in the final hour of trade and finished the day with marginal gains. The NSE’s 50-share broadly followed index Nifty, added single digit gains to settle above the crucial 8,900 support level, while Bombay Stock Exchange’s Sensitive Index or Sensex gained around twenty points and ended above the psychological 28,900 mark. However, the broader markets failed to show any kind of fervor and settled on an uninspiring note, underperforming their larger peers by a fat margin.  The market breadth on the BSE was pessimistic, as there were 1153 shares on the gaining side against 1641 shares on the losing side, while 180 shares remained unchanged.

Finally, the BSE Sensex surged 17.10 points or 0.06% to 28946.23, while the CNX Nifty was up by 7.55 points or 0.08% to 8,934.55.

The BSE Sensex touched a high and a low of 29076.63 and 28851.04, respectively and there were 12 stocks on gainers side as against 18 stocks on the losers side on the index.

The broader indices ended in red; the BSE Mid cap index declined by 0.25%, while Small cap index was down by 0.12%.

The top gaining sectoral indices on the BSE were Telecom up by 0.87%, TECK up by 0.50%, Capital Goods up by 0.47%, IT up by 0.38% and Industrials up by 0.31%, while Metal down by 0.65%, Power down by 0.59%, Utilities down by 0.57%, Energy down by 0.47% and Oil & Gas down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.22%, Hero MotoCorp up by 1.16%, Larsen & Toubro up by 1.02%, TCS up by 0.88% and ONGC up by 0.87%. On the flip side, ICICI Bank down by 0.99%, Power Grid down by 0.88%, Bajaj Auto down by 0.79%, NTPC down by 0.76% and ITC down by 0.59% were the top losers.

Meanwhile, in order to ease the worries of Indian professionals over H1B visa, the government has said that the steps taken by the US were aimed at illegal immigration and added that they would continue to engage with both members of the US administration as well as members of the US Congress on their interests and concerns pertaining to not just H1B visa but other issues as well.

Talking on the discussions held between Foreign Secretary S. Jaishankar with his interlocutors in the US last week, External Affairs Ministry Spokesperson Gopal Baglay has said that there was a strong recognition as well as respect for Indian skills and contribution of the Indian technological manpower to the US economy. He also said it has been India's view that the presence of skilled Indian professionals is positive for the US economy as well, particularly when the US seeks to build a stronger economy. He pointed out that there are other advantages from the presence of Indian professionals in the US like backward linkages.

Calling the H1B visas a trade and business issue, Baglay further said that their views have been clearly conveyed to the concerned US interlocutors. He also said that the government believes that the plans of the US Administration for the US economy present an opportunity for the two countries to further consolidate their strong economic partnership.

The CNX Nifty traded in a range of 8,975.70 and 8,903.95. There were 22 stocks in green as against 29 stocks in red on the index.

The top gainers on Nifty were Bosch up by 3.32%, Bharti Airtel up by 1.30%, Bharti Infratel up by 1.26%, Yes Bank up by 1.13% and L&T up by 1.09%. On the flip side, Tech Mahindra down by 2.55%, BPCL down by 1.54%, Grasim Industries down by 1.34%, ICICI Bank down by 1.10% and NTPC down by 1.01% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 30.1 points or 0.41% to 7,345.06, Germany’s DAX increased 60.07 points or 0.5% to 12,038.46 and France’s CAC increased 24.89 points or 0.5% to 5,006.40.

Asian equity markets ended mostly higher on Friday as oil prices rebounded from three-month lows and the European Central Bank upgraded its growth and inflation forecasts for the euro area, while signaling little urgency to ease policy again in the light of improving economic outlook. Japanese shares closed at its highest since December 2015 as exporters benefitted from the dollar hitting a six-week high against the yen, while investors waited for a US jobs report that could pave the way for a rate hike as early as next week. The all-important February jobs report is slated for release tonight after a glowing report from payroll processor ADP on Wednesday showed US businesses added the most jobs in three years last month. However, Chinese stocks closed slightly lower as the country's central bank skipped its open market operations for a second straight day to help ease pressure on liquidity in the banking system.