Post Session: Quick Review

Indian markets traded in red throughout the day, while it pared some losses in last hour of trade to end modestly in red. The equity benchmarks made a weak start and traded slightly in red in early deals on feeble global cues. Some pressure also crept in after global credit rating agency CRISIL in its latest report said that RBI will have to continue its vigil on inflation all through the current fiscal due to rising food prices, pick up in global commodities and stubborn demand led inflation. The agency expects inflation to average 5% in the fiscal year ended March 2018 higher than the 4.7% estimate for the fiscal ended March 2017, mainly as both food and non- food prices will be elevated. The street maintained a cautious approach after yesterday opposition questioned preparedness on new tax regime when the four bills related to GST was taken up in Rajya Sabha. Initiating a debate on the bills, Deputy Leader of Congress Anand Sharma raised concerns about the government's preparedness to implement the GST in the midst of the financial year, saying there is hardly any time left now as the Government is keen to roll out the indirect tax reform from July 1. The markets trimmed losses after the Reserve Bank of India’s six-member Monetary Policy Committee (MPC) voted unanimously to leave the repo rate at 6.25%, while hiking the reverse repo rate by 25 basis points to 5.75%. Projecting inflation for the first half of 2017-18 at 4.5% and at 5% for the second half, the bank expressed confidence that the economy will recover this fiscal. The central bank also projected India’s GDP growth at 7.4% for the current fiscal, up from the 6.7% projection for 2016-17.

Meanwhile, investors shrugged off the Asian Development Bank’s (ADB) report which highlighted that India’s growth rate will improve to 7.4% during 2017-18 and go up further to 7.6% in the next financial year, remaining ahead of China. The impact of the demonetization of high-value banknotes is dissipating as the replacement banknotes enter circulation. Stronger consumption and fiscal reforms are also expected to improve business confidence and investment prospects in the country. The country’s services sector registered second straight month of growth in March, driven by strong rise in new work orders amid softer inflationary pressures. The Nikkei India Services Purchasing Managers’ Index (PMI), which tracks the services sector output on a monthly basis, rose from 50.3 in February to 51.5 in March.

On the global front, Asian markets closed mostly in red, with risk appetite soured by signs that Fed might start paring its king-sized balance sheet later this year just as the chances of an early US fiscal stimulus faded further. Investors were also wary ahead of a potentially tense meeting between US President Donald Trump and his Chinese counterpart Xi Jinping, the first between the world’s two most powerful leaders. The Asian Development Bank said that developing Asia is on track to post its slowest annual growth in 16 years this year as it adjusts to China’s rebalancing and possible spillovers from global policy uncertainty. European markets were trading in red as investors were jittery ahead of the minutes of the European Central Bank’s latest policy meeting.

Back home, shares of select real estate companies closed in green as investors cheered the central bank’s decision on REITs. The Reserve Bank of India (RBI) allowed banks to invest in real estate investment trusts (REITs) as well as infrastructure investment trusts (InvITs).

The BSE Sensex ended at 29888.20, down by 86.04 points or 0.29% after trading in a range of 29817.59 and 29954.25. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.07%, while Small cap index was down by 0.27%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.10%, Oil & Gas up by 0.89%, Energy up by 0.76%, Power up by 0.69% and Basic Materials up by 0.54%, while Telecom down by 0.89%, FMCG down by 0.82%, Healthcare down by 0.70%, Consumer Durables down by 0.49% and Bankex down by 0.32% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 1.87%, Bajaj Auto up by 1.53%, GAIL India up by 1.41%, Power Grid up by 1.36% and Reliance Industries up by 1.31%. (Provisional)

On the flip side, ITC down by 1.68%, ICICI Bank down by 1.54%, SBI down by 1.50%, Coal India down by 1.17% and Dr. Reddy’s Lab down by 1.10% were the top losers. (Provisional)

Meanwhile, the activity in India's service sector expanded for the second successive month in March to reach at a five-month high on the back of strong rise in new work. The seasonally adjusted Nikkei Services Business Activity Index rose above the critical 50.0 level for the second-month running in March, posting 51.5 from 50.3 in February. Though the input costs facing services firms rose again in March, the improvement in business conditions, rise in output and slight growth in employment helped the index to move upwards. Underpinning the expansion in services activity was a back-to-back rise in new business inflows, while growth of new work also gathered pace in March.

The seasonally adjusted Nikkei India Composite PMI Output Index which measures both manufacturing and services also increased to 52.3 from 50.7 in February, signaling a quicker rise in private sector activity across the country. As per the survey, new business and output rose for the second straight month in March, with rates of expansion accelerating in both cases. Besides, the improvement in business conditions promoted job creation, while confidence towards the year-ahead outlook for activity was at a four-month high. The report further noted that factory new orders increased at the strongest rate since last October.

On the inflation front, the survey stated that input costs facing services firms rose again in March, thereby stretching the current sequence of inflation to seven months. The main items reported to be up in price over the month were fuel and food. In contrast to the trend seen in services, purchase cost inflation in the manufacturing industry softened to a four-month low. Moreover, amid reports of the passing on of higher cost burdens to clients, some services companies raised their own selling prices in March. Overall, the rate of charge inflation was slight, having softened since the preceding month. Services companies indicated that activity is expected to rise over the coming 12 months, with the overall degree of optimism at a four-month high.

The CNX Nifty ended at 9251.85, down by 13.30 points or 0.14% after trading in a range of 9218.85 and 9267.95. There were 26 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Steel up by 1.97%, Zee Entertainment up by 1.78%, Bajaj Auto up by 1.67%, Ambuja Cement up by 1.59% and Ultratech Cement up by 1.46%. (Provisional)

On the flip side, Hindalco down by 2.14%, ITC down by 1.77%, SBI down by 1.72%, ICICI Bank down by 1.61% and Coal India down by 1.28% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 39.07 points or 0.53% to 7,292.61, Germany’s DAX decreased 59.17 points or 0.48% to 12,158.37 and France’s CAC decreased 10.08 points or 0.2% to 5,081.77.

Asian equity markets ended mostly in red on Thursday, as oil prices retreated from one-month highs and a private survey showed activity in China's service sector expanded at a slower pace for the third straight month in March. Hawkish Fed minutes and anxiety ahead of a two-day meeting between US and Chinese leaders also weighed on markets. Japan's Nikkei share average tumbled to a four-month closing low after signs the US Federal Reserve may start cutting its king-sized balance sheet earlier than expected spooked the market. Hong Kong stocks fell in sympathy with Asia markets, as investors fretted about signs the Federal Reserve could scale back its massive stimulus this year amid frayed nerves ahead of a looming meeting between the US and Chinese presidents. Though, Chinese shares hit four-month highs, led by infrastructure companies after Beijing announced plans to build a special economic zone in the heartland of sleepy Hebei province.