Indian benchmarks settle at record closing highs ahead of RBI policy review

Indian stock markets sustained the joy of closing in the positive territory for the second successive session on Wednesday after the frontline equity gained around quarter percent and settled at record closing highs. Sentiments got some support after government exceeded the tax collection estimates for 2016-17 fiscal at Rs 17.10 lakh crore, indicating that it should be able to meet the fiscal deficit target for the year. While direct tax mop-up during the April-March period grew 14.2% at Rs 8.47 lakh crore, indirect tax kitty swelled by 22% over last year to Rs 8.63 lakh crore. Some support also came with the report that department of Industrial Policy and Promotion (DIPP) and global think-tank OECD are jointly organising a seminar in Delhi to assess India's FDI regime and find ways to further improve the ease of doing business. The international seminar will also analyse the business climate in the country. However, many market participants remained on the sidelines and refrained from any buying activity ahead of the Reserve Bank of India's monetary policy statement due tomorrow. Rising interest rate in the US provides sufficient indication that benchmark policy rate of RBI is not going to go down but may increase in the future depending on domestic and external factors. However, investors are expecting the RBI to announce measures to absorb liquidity that has accumulated post demonetisation. Central bank Governor Urjit Patel in his last policy review on February 8 had kept the key interest rate on hold at 6.25%. Meanwhile, IT stocks came under pressure on the report that Trump administration has issued a stern warning to companies not to discriminate against American workers by misusing the H-1B work visas programme. In a fresh blow to Indian software professionals, the Trump administration has also moved to bar entry-level programmers from the H-1B visa programme.

On the global front, Asian equity markets ended mostly higher on Wednesday even as underlying sentiment remained cautious over North Korea's latest ballistic missile test, which landed in the Sea of Japan. Investors also remained cautious ahead of some key events this week, including the release of minutes of the latest Federal Reserve meeting on Wednesday, the US-China summit starting Thursday, and the closely-watched monthly US jobs report on Friday. Chinese shares edged higher as investors cheered Beijing's decision to launch a new economic zone in Hebei province, sending shares of several related firms surging by the daily limit of 10 percent. Meanwhile, European stocks are booking modest gains in early trading as mining and energy shares boost benchmarks in London, offsetting a cautious tone in broader financial markets ahead of this week's summit meeting between President Donald Trump of the United States and Xi Jinping of China.

Back home, the BSE Sensex breached 30,000-mark and the NSE Nifty surged above 9,250-mark in the opening trade, but failed to sustain it and slipped into the negative territory in later part of the trade. Thereafter, the benchmarks traded in tight range throughout the session and ended moderately higher.  Finally, the NSE's 50-share broadly followed index Nifty, got buttressed by over quarter percent to settle above the crucial 9,250 support level, while Bombay Stock Exchange's Sensitive Index-Sensex accumulated over fifty points and closed above the psychological 29,950 mark. Further, the broader markets succeed to outperform their larger peers as the BSE's midcap gained 0.46% and smallcap index jumped 1.12%. The market breadth remained optimistic, as there were 1998 shares on the gaining side against 932 shares on the losing side, while 142 shares remained unchanged.

Finally, the BSE Sensex surged 64.02 points or 0.21% to 29974.24, while the CNX Nifty was up by 27.30 points or 0.30% to 9,265.15.

The BSE Sensex touched a high and a low of 30007.48 and 29817.69, respectively and there were 18 stocks on gainers side as against 12 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained by 0.46%, while Small cap index was up by 1.12%.

The top gaining sectoral indices on the BSE were Realty up by 4.08%, Consumer Durables up by 2.41%, Telecom up by 1.76%, Capital Goods up by 1.53% and Industrials up by 1.47%, while IT down by 0.79%, TECK down by 0.21% and FMCG down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 4.50%, Maruti Suzuki up by 4.40%, Reliance Industries up by 3.19%, Larsen & Toubro up by 2.18% and Hindustan Unilever up by 1.82%. On the flip side, HDFC down by 2.78%, Coal India down by 1.69%, Infosys down by 1.39%, Asian Paints down by 1.36% and ITC down by 0.98% were the top losers.

Meanwhile, after the US Citizenship and Immigration Services released new guidance that computer programmers are no longer presumed to be eligible for H-1B visas. The Indian IT trade body, National Association of Software and Services Companies (NASSCOM) has said that the United States government's new policy memo on H-1B visas is going to have 'little impact' on Indian IT firms as they have already started applying for visas for higher-level specialized professionals this year. The US Citizenship and Immigration Services (USCIS) in its latest policy memorandum said that companies applying for visas must provide “evidence to establish that the particular position is one in a specialty occupation”.

Nasscom said that the clarifying guidance should have little impact on its members as this has been the adjudicatory practice for years and also as several of their member executives have noted recently, they are applying for visas for higher level professionals this year. It added that the demand for additional evidence showing that the said job is complex or specialized and requires professional degrees mentioned in the memo has been the de facto requirement for years.
Noting that member companies provide skilled talent and solutions to U.S. companies, the industry body said that the H-1B visa system exists specifically because of the persistent shortage of highly-skilled domestic IT talent in the U.S. and its members will continue to provide skilled talent and solutions to fill that gap and keep U.S. companies competitive globally.

The US Department of Homeland Security on March 31, 2017 issued a policy memorandum with subject line 'Rescission of the December 22, 2000 “Guidance memo on H-1B computer related positions”' suggesting that the older provisions will be cancelled. In its policy memorandum, the USCIS mentioned that 'Based on the current version of the Handbook, the fact that a person may be employed as a computer programmer and may use information technology skills and knowledge to help an enterprise achieve its goals in the course of his or her job is not sufficient to establish the position as a specialty occupation'.

The CNX Nifty traded in a range of 9,273.90 and 9,215.40. There were 28 stocks in green as against 23 stocks in red on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 4.57%, Maruti Suzuki up by 4.33%, Reliance Industries up by 2.94%, ZEEL up by 2.76% and Hindalco up by 2.17%. On the flip side, HDFC down by 2.72%, HCL Tech down by 2.11%, Coal India down by 1.69%, Infosys down by 1.35% and Tech Mahindra down by 1.35% were the top losers.

The European markets were trading mostly in green; UK’s FTSE 100 increased 12.43 points or 0.17% to 7,334.25, France’s CAC increased 8.98 points or 0.18% to 5,110.11, while Germany’s DAX decreased 29.38 points or 0.24% to 12,252.96.

Asian equity markets ended mostly in green on Wednesday even as underlying sentiment remained cautious after North Korea fired a ballistic missile into the Sea of Japan and the US said it is considering all options to tackle the threat posed by the country's repeated nuclear arms test. Investors also looked ahead to some key events this week, including the release of minutes of the latest Federal Reserve meeting later today, the US-China summit starting Thursday, and the closely-watched monthly US jobs report due on Friday. Chinese shares ended higher as investors cheered Beijing's decision to launch a new economic zone in Hebei province, sending shares of several related firms surging by the daily limit of 10 percent. Further, Japanese shares rose as the yen rally paused and data from Markit showed activity in the country's services sector expanded at the fastest pace in 19 months in March.