Post Session: Quick Review

Indian equity benchmarks traded jubilantly throughout the day on Tuesday with Nifty and Sensex ending with gain a of around one and half percent. The 50-share NSE index Nifty hits a new high of 9,122.75 and the Sensex soared 616 points to 29,561.93. Investors shrugged off a report that the wholesale price index-based inflation (WPI) jumped to a 39-month high of 6.55% in February compared to 5.25% in the previous month on the back of expensive food and fuel items, even as manufacturing products saw a decline in inflation. The market made a gap up start in early deals as sentiments was buoyed after the BJP’s victory in the UP Assembly elections. The rupee opened higher against the dollar amid renewed selling of the US currency by banks and exporters. Foreign Portfolio Investors stood net buyers in the domestic equity market on Friday, as they bought shares worth Rs 1,937.16 crore on March 10 with gross purchases and gross sales of Rs 755.56 crore and Rs 652.67 crore, respectively. Traders took support from the stunning victory of BJP in UP Assembly polls and market experts believe benchmark equity indices may hit new highs on hopes of further economic reforms. The development has raised the chances of increased foreign inflow amid steady rupee, as predictability and stability of the government may help in sustaining high PE Indian equities.

Some support also came with industrial production bouncing back into expansion in January, kicking off the financial year’s last quarter on a positive note amid expectations that it will bear the brunt of demonetization. The Index of Industrial Production (IIP) rose 2.7% in January from a year ago, the second fastest monthly growth this financial year behind 5.7% recorded in November. Industrial production had contracted 0.1% in December, the first full month after demonetization, which was announced on November 8. Separately, the government’s revenue collection during April-February of current fiscal year has shown a healthy growth, indirect tax collection surged by 22.2 percent at Rs 7.72 lakh crore, on the back of robust collection in excise duty mop-up, while that of direct tax the rise was 10.7 percent to Rs 6.17 lakh crore led by increase in personal income tax.

On the global front, Asian markets closed mixed, with data out of China supported Shanghai. China’s factory output and fixed-asset investment grew more strongly than expected in the first two months of the year, but retail sales disappointed after the government reduced a tax break on small cars. In Japan, the Nikkei 225 closed in red as Toshiba plunged after the company announced it would postpone earnings filings again due to the need for more time with auditors to review its US nuclear subsidiary Westinghouse. The European markets were trading mostly in red after British government won final approval from parliament for legislation giving Prime Minister Theresa May the power to trigger the country’s exit from the European Union.

The BSE Sensex ended at 29421.82, up by 475.59 points or 1.64% after trading in a range of 29356.05 and 29561.93. There were 25 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices end in green; the BSE Mid cap index was up by 1.34%, while Small cap index up by 1.19%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 2.83%, Consumer Durables up by 2.59%, Realty up by 2.57%, Consumer Disc up by 1.81 and Bankex up by 1.79%, while Telecom down by 0.58% and Metal down by 0.37% were the only losers on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 5.67%, Hindustan Unilever up by 4.22%, Larsen & Toubro up by 4.03%, HDFC up by 3.69% and Asian Paints up by 3.51%. (Provisional)

On the flip side, Coal India down by 6.49%, Bharti Airtel down by 0.93%, Axis Bank down by 0.88%, GAIL India down by 0.63% and Bajaj Auto down by 0.20% were the top losers. (Provisional)

Meanwhile, the level of confidence of Indian companies declined in February from those recorded four months ago. According to the Markit Business Outlook survey, just 16 per cent of firms expect output to expand over the course of the next year, compared with 25 percent in October 2016, the lowest reading of the 12 countries for which composite outlook data were available. Besides, the expectations of weaker growth in new business inflows and job creation in India are expected to remain relatively muted.

The survey said that new business is anticipated to rise over the course of the next 12 months, though confidence is at its lowest mark since the global financial crisis. Indian enterprises foresee new projects in the pipeline, strong client demand and the possible introduction of the goods & services tax as potential growth drivers for the year ahead. On the other hand, it noted that competitive pressures, government policies, client defaults, and uncertainty in global markets are seen as threats to the outlook.

On the cost inflation front, the survey said that cost inflation expectations have been revised lower, in line with decisions by the central bank not to cut rates. Further, it added that goods producers are projected to face more intense rises in cost burdens than their services counterparts, though in both cases inflation anticipations are weaker than in October.

The CNX Nifty ended at 9073.35, up by 138.80 points or 1.55% after trading in a range of 9060.50 and 9122.75. There were 44 stocks advancing against 7 stocks declining on the index. (Provisional)

The top gainers on Nifty were ICICI Bank up by 5.90%, Hindustan Unilever up by 4.32%, Larsen & Toubro up by 4.05%, Ultratech Cement up by 3.76% and HDFC up by 3.50%. (Provisional)

On the flip side, Coal India down by 6.66%, Bosch down by 2.11%, Idea Cellular down by 1.39%, Axis Bank down by 0.95% and Bharti Airtel down by 0.73% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 12.42 points or 0.1% to 11,977.61, France’s CAC decreased 15.29 points or 0.31% to 4,984.31, while UK’s FTSE 100 increased 8.6 points or 0.12% to 7,375.68.

Asian equity markets ended mixed on Tuesday as tumbling oil prices, European political risks and an impending Federal Reserve meeting remained high on investors' radar. Meanwhile, a slew of positive data out of China drew a lukewarm response. Chinese shares ended on a flat note even as a slew of economic reports suggested that the world's second-largest economy remained strong at the start of 2017. Chinese factory output and fixed-asset investment figures for the first two months of the year exceeded estimates, but annual growth in retail sales slowed during the period. Another report showed that China's property sales surged in the first two months of the year despite a slew of government curbs since October. Japanese shares fell from a 15-month high as the dollar fell against the yen ahead of this week's BoJ and Federal Reserve monetary policy meetings. The Fed is widely expected to increase interest rates at the end of its two-day policy meeting on Wednesday, while the Bank of Japan is expected to keep its rates and yield-curve policy steady when it reviews its monetary policy on Thursday.