Indian equity indices convalesce; Sensex ends above 29400 mark

It turned out to be a stable day for the Indian benchmark indices, which climbed well over half a percent point and managed to end above the crucial support levels. Investors remained optimistic on hopes that the Goods and Services Tax (GST) will be implemented on time. The government introduced the supporting legislation for the GST in Parliament on Monday, reinforcing expectations that it would make the July 1 deadline for the roll-out of this singular tax reform. According to Revenue Secretary Hasmukh Adhia, GST will not only usher in a transparent tax system thereby reducing cascading of taxes, but will also result in reduction of prices for consumers and broaden the tax base in the country. Investors got further confidence with the report that manufacturing activity improved in March after a three months of decline, while various government measures are likely to push up activity in the infrastructure sector going forward. The yearly SBI Composite Index, one of leading indicator for manufacturing activity in the Indian economy, bounced back to above 50-mark level to 50.3 after 3-months of decline. The report also noted that going by the findings, index of industrial production (IIP) growth may continue to be in the positive territory in February and March, this year. However, gains remained capped with the report that India will face a below normal rainfall during the June to September south-west monsoon season. About 70% of India's rainfall happens in this period and irrigates almost half of India's farmland, being of particular importance for Kharif crops.

On the global front, Asian equity markets ended mostly higher on Tuesday as investors shrugged off US President Donald Trump's drubbing on health care and turned hopeful that the White House will take a lead role in crafting legislation to overhaul the US tax code, which has bi-partisan support across the country. Japan's Nikkei closed up 1.1%, its biggest one-day gain in more than two weeks, while Australian stocks ended the day 1.3% higher, their strongest performance since November 23, 2016.  South Korean stocks gained after data showed the domestic economy grew at a slightly faster pace than initially thought in the fourth quarter of 2016, supported by strong construction activity. However, Chinese market ended lower on concerns about tightening liquidity conditions after the central bank refrained from injecting short-term funds into the banking system for the third session in a row. Meanwhile, European stocks rebounded in a broad rally after two days of declines as investor concerns over U.S. President Donald Trump's policy efforts eased and mining shares rose. 

Back home, the local benchmarks got off to a positive start in the morning trade as market participants were largely influenced by the supportive leads from Asian markets. Thereafter, the frontline indices soon gathered momentum and traded with over half a percent gains through the session. Finally, the NSE's 50-share broadly followed index Nifty, got buttressed by over half a percent to settle just above the crucial 9,100 support level, while Bombay Stock Exchange's Sensitive Index- Sensex accumulated over one hundred and seventy points and closed above the psychological 29,400 mark. Moreover, the broader markets too participated in the rally and closed with gains of around half a percent. The market breadth remained optimistic, as there were 1448 shares on the gaining side against 1391 shares on the losing side, while 215 shares remained unchanged.

Finally, the BSE Sensex surged 172.37 points or 0.59% to 29409.52, while the CNX Nifty was up by 55.60 points or 0.61% to 9,100.80.

The BSE Sensex touched a high and a low of 29442.18 and 29301.22, respectively and there were 20 stocks on gainers side as against 10 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained by 0.72%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Telecom up by 0.94%, Basic Materials up by 0.81%, Utilities up by 0.79%, Bankex up by 0.78% and Auto up by 0.77%, while Realty down by 0.35%, Energy down by 0.30% and Oil & Gas down by 0.25% were the only losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.23%, HDFC up by 1.97%, Tata Motors up by 1.48%, Asian Paints up by 1.32% and ICICI Bank up by 1.26%. On the flip side, ONGC down by 1.08%, ITC down by 0.50%, Lupin down by 0.45%, Reliance Industries down by 0.41% and Coal India down by 0.33% were the top losers.

Meanwhile, the Commerce Secretary Rita Teaotia has said that India is offering far deeper proposals in the proposed mega Regional Comprehensive Economic Partnership (RCEP) agreement than most of the other member nations of the grouping, for liberalisation of trade in services. She also said that the country will give more concessions in RCEP than any other country will do.

Highlighting on the importance of trade in goods and services, the commerce Secretary has said that the sector holds huge potential to boost economic growth and create employment in all economies. Talking on the second review of India-Singapore free trade agreement, she said that there have been difficulties in concluding this review due to certain small issues.

Citing certain issues, Rita Teaotia said that the asset management ratio for Indian banks has tended to be higher than it is for counterpart banks from other nationalities. She also pointed out that in India, this ratio is same for both foreign and Indian banks, but in Singapore, it is hard to know on exactly what premise the asset management ratio is based. Therefore, it leads to worries and concerns in the industry. She added that the other issue is the restrictions in the movement of professionals.

The RCEP is a mega trade agreement being negotiated among 16 countries including ASEAN, India, China, Japan, South Korea, Australia and New Zealand. It aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights.

The CNX Nifty traded in a range of 9,110.40 and 9,079.80. There were 40 stocks in green as against 11 stocks in red on the index.

The top gainers on Nifty were Eicher Motors up by 3.86%, Axis Bank up by 3.51%, Tata Motors - DVR up by 3.01%, ZEEL up by 2.69% and Tata Power up by 2.18%. On the flip side, Tech Mahindra down by 2.75%, Kotak Mahindra Bank down by 1.28%, ONGC down by 1.06%, Coal India down by 0.41% and Hero MotoCorp down by 0.40% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 3.89 points or 0.05% to 7,297.39, Germany’s DAX increased 73.42 points or 0.61% to 12,069.49 and France’s CAC increased 2.67 points or 0.05% to 5,020.10.

Asian equity markets ended mostly in green on Tuesday as investors shrugged off US President Donald Trump's drubbing on health care and turned hopeful that the White House will take a lead role in crafting legislation to overhaul the US tax code, which has bi-partisan support across the country. Japanese shares rebounded from a six-week low as oil prices edged up in Asian deals and the dollar recovered from its lowest level since November against the yen on hopes Trump would be able to enact promised tax cuts and infrastructure spending. Though, Chinese shares ended lower on concerns about tightening liquidity conditions after the central bank refrained from injecting short-term funds into the banking system for the third session in a row. The People's Bank of China (PBOC) skipped open market operations again on Tuesday, saying liquidity levels in the banking system were ‘appropriate’ and there was no reason to inject more funds. The Indonesian market was closed for the Hindu New Year holiday.