Post Session: Quick Review

Indian equity benchmarks traded on a weak note for most part of the day and ended with modest cut. The benchmarks fell for a second consecutive session although it pared some losses in the second half of the day, as investors focused on individual stock movements. The street expects a period of consolidation ahead of the earnings season scheduled to start in mid-April. The equity benchmarks made a positive start and traded slightly in green in early deals after Cabinet yesterday cleared four supporting GST legislations, paving the way for their introduction in Parliament. Once approved by Parliament, the states would start taking their SGST bill for discussion and passage in the respective state assemblies. Traders reacted negatively to SBI Research report which highlighted that if the UP government fulfils its farmer loan waiver promise, banks are likely to take a hit of Rs 27,420 crore and the scheme will lead to some stress on the state’s fiscal arithmetic. The BJP had in its UP election manifesto promised to waive farmers’ loans if elected to power. The report said that schedule commercial banks together had an outstanding farm credit of Rs 86,241.20 crore in UP with the average ticket size of Rs 1.34 lakh, as of 2016, most of which is to small and marginal farmers. Separately, a foreign brokerage firm reported that the implementation of Goods and Services Tax (GST) is likely to be fiscally neutral and its impact on inflation is expected to be less than 20 basis points. Banking stocks faced selling pressure after a foreign brokerage firm downgraded a slew of large Indian lenders, citing expectation of weak earnings. Few drug makers slumped on worries of regulatory action from the US Food and Drug Administration. Hectic pressure was witnessed in select oil companies after a parliamentary panel reported that upstream oil and gas producers will face substantial additional tax liability under the proposed GST regime due to the clipping of existing tax breaks, a higher tax rate on services and the temporary exclusion of five hydrocarbons from the new indirect tax system.

On the global front, Asian markets closed mostly in green, while the dollar and US bond yields were on the back foot on the prospect of a less-hawkish Federal Reserve policy trajectory. China stocks closed slightly higher but investors’ risk appetite was restrained amid growing signs of tighter liquidity in the banking system. Hong Kong stocks climbed to a near 20-month high bolstered by continued inflows from Chinese investors and signs of global economic recovery. Japan’s Nikkei closed in red weighed by financial stocks, which were hurt by lower US yields and exporter stocks, which fell on the yen’s gains against the dollar. European shares were trading mostly lower as investors looked ahead to the February inflation data from the UK. European Union finance ministers expressed concern over the future of free trade after what one of them called a surreal meeting of finance chiefs of the world’s 20 biggest economies at the weekend.

The BSE Sensex ended at 29494.79, down by 23.95 points or 0.08% after trading in a range of 29380.14 and 29585.05. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.46%, while Small cap index was down by 0.17%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.30%, FMCG up by 0.93%, Basic Materials up by 0.42%, Capital Goods up by 0.29% and IT up by 0.25%, while Healthcare down by 1.53%, Bankex down by 0.46%, Telecom down by 0.45%, Energy down by 0.42% and Auto down by 0.35% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 1.74%, ONGC up by 1.55%, Infosys up by 0.82%, Larsen & Toubro up by 0.72% and Hindustan Unilever up by 0.66%. (Provisional)

On the flip side, Dr. Reddy’s Lab down by 4.79%, Axis Bank down by 3.18%, GAIL India down by 1.48%, Maruti Suzuki down by 1.23% and Asian Paints down by 1.19% were the top losers. (Provisional)

Meanwhile, credit rating agency, ICRA in its latest report has said that the revival of irrigation sector backed by adequate funding support may add to the order inflow of construction companies. It added that the government investment in urban infrastructure segments has helped construction companies improve their order book positions and the revival of irrigation sector is beneficial for construction companies.

The rating agency said that the revival of irrigation sector backed by adequate funding support is a credit positive for construction companies. It noted that irrigation sector has witnessed good traction over the last one year and is likely to see improved execution with increased funding support from the State and the Central Governments budgetary allocation and the Long Term Irrigation Fund (LTIF) of NABARD.

The report pointed that states like Telangana have significantly increased allocation towards the irrigation sector to fast track the development of irrigation projects and added that while funding issues for these projects are largely addressed with fund availability from LTIF, other execution impediments could still delay completion of many projects.

The report stated that the construction sector’s gross value added (GVA) witnessed a YoY growth of 2.7 percent during Q3 FY2017 which is similar to the modest growth witnessed in the past quarters. Besides, it said that the growth in the construction GVA despite the disruption in the execution caused by the demonetisation reflects the resilience of the organised construction sector. In view of government’s fiscal targets and other increased expenditures, the agency noted that the revival of public private partnership is crucial for improving the pace of infrastructure development.

The CNX Nifty ended at 9125.60, down by 1.25 points or 0.01% after trading in a range of 9087.20 and 9147.75. There were 26 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Grasim Industries up by 2.93%, ITC up by 2.00%, ONGC up by 1.65%, Hindalco up by 1.55% and Bharti Infratel up by 1.52%. (Provisional)

On the flip side, Idea Cellular down by 4.96%, Dr. Reddy’s Lab down by 4.55%, Axis Bank down by 2.75%, Aurobindo Pharma down by 2.10% and Tata Motors - DVR down by 1.68% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 19.26 points or 0.26% to 7,410.55, Germany’s DAX decreased 1.1 points or 0.01% to 12,051.80, while France’s CAC increased 9.63 points or 0.19% to 5,021.79.

Asian equity markets ended mostly in green on Tuesday as crude oil prices advanced in Asian deals on speculation that OPEC members are likely to extend output cuts beyond June. Chinese stocks ended higher despite signs of tighter liquidity in the banking system. China's central bank should clarify its new short-term policy rate and the target rate level as soon as possible, a central bank working paper said, as authorities in the world's second-largest economy slowly shift to a tightening bias. Though, Japanese shares ended slightly lower due to selling pressure following a public holiday on Monday, as a weakening of the US dollar against the yen added to worries over protectionist moves under US President Donald Trump. The omission of the customary pledge to avoid protectionism from a statement by the Group of 20 major economies over the weekend underscored the challenges to free trade that have coincided with Trump’s vows to rewrite trade deals.