Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day and ended in green with Nifty closing above 9150 mark. The equity benchmarks made a gap-up opening in early deals after the Federal Reserve increased its interest rate by quarter a point amid rising confidence that the economy is poised for more robust growth. Traders took support on report that India’s merchandise exports registered double-digit growth in February for the first time since the Narendra Modi government took office, on the back of a 47% rise in engineering goods and improved international demand. Exports swelled by 17.48% in February to $24.5 billion but a steeper increase in imports at 21% widened the trade deficit to $8.8 billion from $6.5 billion in the year-ago period. Some support also came after global credit rating agency Moody’s statement that the recent state election results will facilitate reforms by the BJP led Indian government. The agency said the 2017 state election results demonstrate broad-based popular support for the Indian government’s policy agenda and will facilitate the implementation of further reforms, a credit positive for the sovereign. Also, the International Monetary Fund (IMF) enlightened that India’s economic growth is expected to pick up once the effects of cash shortages linked to the currency exchange initiative fade. IMF in its note highlighted that further subsidy reduction and tax reforms, including a robust design and full implementation of the Goods and Services Tax (GST), are necessary to attain medium-term fiscal consolidation plans.

On the global front, Asian markets closed higher, following indications of a measured response from the Federal Reserve in countering inflation. The Bank of Japan kept monetary policy steady in the wake of the US Federal Reserve’s second interest rate hike in three months, underscoring the diverging policy paths of major global central banks. Bank of Japan Governor Haruhiko Kuroda said an uptick in inflation toward 1 percent won’t immediately trigger an interest rate hike, signaling that Japan will stick to its ultra-easy policy even as other major economies eye withdrawing stimulus. European stocks moved higher after the Federal Reserve decided to hike interest rates as expected and investors looked ahead to the Bank of England’s monetary policy decision due later in the trading session.

The BSE Sensex ended at 29581.55, up by 183.44 points or 0.62% after trading in a range of 29482.83 and 29614.79. There were 24 stocks advancing against 6 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.55%, while Small cap index was up by 1.08%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 3.09%, Basic Materials up by 1.80%, Power up by 1.79%, Industrials up by 1.58% and Consumer Durables up by 1.56%, while Telecom down by 0.14% was the sole loser. (Provisional)

The top gainers on the Sensex were Tata Steel up by 4.59%, Adani Ports & Special Economic Zone up by 4.55%, Bajaj Auto up by 2.41%, Asian Paints up by 1.89% and Infosys up by 1.87%. (Provisional)

On the flip side, Hero MotoCorp down by 1.32%, Bharti Airtel down by 0.87%, Reliance Industries down by 0.60%, ICICI Bank down by 0.32% and Coal India down by 0.29% were the top losers. (Provisional)

Meanwhile, the International Monetary Fund (IMF), in its latest report 'Global Prospects and Policy Challenges' has said that India’s economic growth is likely to improve, once impact of the cash shortage linked to the currency exchange move fades. The report also expects the fiscal deficit to continue to shrink in the near-term.

In order to attain medium-term fiscal consolidation plans, the report has said that emphasis is needed on various measures such as subsidy reduction and tax reforms, including a robust design and full implementation of the Goods and Services Tax (GST) to achieve these fiscal consolidation plans.

The report further noted that the steps has been taken by emerging economies like India to reduce excessive corporate leverage and improve bank's balance sheets or adoption of more prudent risk-management practices, including to reduce currency and maturity balance sheet mismatches, which will help reduce vulnerabilities to global financial conditions, possible capital outflows, and sharp currency movements.

The CNX Nifty ended at 9156.30, up by 71.50 points or 0.79% after trading in a range of 9128.55 and 9158.45. There were 44 stocks advancing against 7 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports & Special Economic Zone up by 4.95%, Tata Steel up by 4.51%, Hindalco up by 4.40%, Bajaj Auto up by 2.33% and IndusInd Bank up by 2.27%. (Provisional)

On the flip side, Hero MotoCorp down by 1.41%, Bharti Airtel down by 0.74%, Reliance Industries down by 0.62%, Idea Cellular down by 0.53% and ICICI Bank down by 0.35% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 67.49 points or 0.92% to 7,436.13, Germany’s DAX increased 122.9 points or 1.02% to 12,132.77 and France’s CAC increased 40.82 points or 0.82% to 5,026.30.

Asian equity markets ended higher on Thursday after the US Federal Reserve lifted its benchmark short-term rate by 25 basis points, as expected, and stuck to its forecast of two more such increases this year and three in 2018, saying the economy is doing well. Investors who had feared much faster US hikes heaved a sigh of relief after the Fed emphasized further rate increases would only be ‘gradual’. A rebound in oil prices and Dutch Prime Minister Mark Rutte's victory over anti-Islam lawmaker Geert Wilders in a parliamentary election also supported underlying sentiment. Chinese shares ended higher after the country's central bank lifted interest rates by 10 basis points on both medium-term lending facility loans and reverse repurchase agreements in a bid to avoid downward pressure on the yuan and counter capital outflows. Further, Japanese shares ended marginally higher even as the dollar fell against the yen and the Bank of Japan kept its monetary stimulus unchanged, as widely expected, saying the economy is on a moderate recovery trend.