Indian benchmarks settle in the red but outclass most of the global peers

Indian equity benchmarks showed smart recovery despite snapping the day in the negative territory as they managed to outclass most of the Asian and Europe peers by fat a margin. Sentiments got a boost after the Reserve Bank of India (RBI) projected India's growth to strengthen to 7.4% in 2017-18 from 6.7% in 2016-17. The central bank has maintained status quo on policy rate by leaving the repurchase rate (or repo rate) unchanged at 6.25% in its first bimonthly policy of FY18. However, it raised the reverse repo rate by 25 basis points to 6%. Further, RBI projected inflation to average around 4.5% in the first half of 2017-18 and 5% in the second half. Investors also got some confidence with Asian Development Bank's (ADB) report that India's growth rate will improve to 7.4% during 2017-18 and go up further to 7.6% in the next fiscal. According to the ADB, India has taken a host of economic reforms initiative, including the Goods and Services Tax (GST) and liberalization of the FDI regime, with a view to improve business climate and promote growth. Some support also came after 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. Meanwhile, Real estate shares gained traction after RBI allowed banks to invest in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Further, shares of railway related companies such as Texmaco Rail & Engineering, Kernex Microsystems and Stone India surged after the government approved setting up of Rail Development Authority.

On the global front, Asian markets ended mostly lower on Thursday, as investors were spooked by Federal Reserve minutes showing it is mulling a plan to tighten monetary policy by sucking cash out of the financial system. Investors were also wary ahead of a potentially tense meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping, the first between the world's two most powerful leaders.  However, 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. Meanwhile, losses in banks dragged European stocks lower in early trade, shaken by the Federal Reserve's plan to start reducing its buildup of government and mortgage-backed bonds that's been a pillar of support for equity markets worldwide.

Back home, after getting weak start, the local indices traded in tight range for most part of the session, but witnessed a strong recovery in the final hour of trade and finished the day with moderate losses. Finally, the NSE's 50-share broadly followed index - Nifty settled with trivial losses of three points above the psychological 9,250 levels, while Bombay Stock Exchange's Sensitive Index - Sensex shed forty six points and closed above the psychological 29,900 mark. The market breadth remained optimistic, as there were 1469 shares on the gaining side against 1413 shares on the losing side, while 137 shares remained unchanged.

Finally, the BSE Sensex decreased 46.90 points or 0.16% to 29927.34, while the CNX Nifty was down by 3.20 points or 0.03% to 9,261.95. 

The BSE Sensex touched a high and a low of 29954.25 and 29817.59, respectively and there were 13 stocks on gainers side as against 17 stocks on the losers side on the index.

The broader indices ended mixed; the BSE Mid cap index gained 0.15%, while Small cap index was down by 0.23%.

The top gaining sectoral indices on the BSE were Realty up by 2.00%, Energy up by 0.93%, Oil & Gas up by 0.92%, Power up by 0.65% and Basic Materials up by 0.49%, while FMCG down by 0.79%, Consumer Durables down by 0.64%, Healthcare down by 0.63%, Telecom down by 0.59% and Capital Goods down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.68%, Reliance Industries up by 1.66%, Bajaj Auto up by 1.46%, Power Grid up by 1.26% and GAIL India up by 1.18%. On the flip side, ITC down by 1.65%, ICICI Bank down by 1.40%, SBI down by 1.35%, Coal India down by 1.16% and Dr. Reddy’s Lab down by 0.91% were the top losers.

Meanwhile, emphasizing the need to turn problems into opportunities and work at expanding the scale of operation, President Pranab Mukherjee has said that every Indian mind is an innovative mind, having potential to come up with the solution to problems and if India has to become a great economic power, it has to invest heavily in innovation and entrepreneurship. He added that the Indian innovation strategy should focus on generating ideas that promote inclusive growth and benefit those who are at the bottom of the socio-economic pyramid.

Noting India will grow when whole of India grows; Mukherjee said with 68 percent of our population still live in villages in the rural areas, smart development can take place only if villages and villagers become smart. He expressed need of development in rural areas and said that they must have the required basic physical and social infrastructure with a layer of smart information and communication embedded in the infrastructure to improve governance and delivery of services, livelihood and economic opportunities.

To encourage youth to take up entrepreneurship and contribute to economic development, President further said that imparting skill and providing gainful employment is essential for them to face demographic challenge and harness the enthusiasm, energy and ambition. Besides, he said that India has a huge domestic market and this provides an advantage for the enterprises that use local material and technologies to produce low cost but good quality products for the market.

The CNX Nifty traded in a range of 9,267.95 and 9,218.85. There were 26 stocks in green as against 25 stocks in red on the index.

The top gainers on Nifty were Tata Steel up by 2.05%, ZEEL up by 1.78%, Bajaj-Auto up by 1.67%, Ambuja Cement up by 1.63% and UltraTech Cement up by 1.46%. On the flip side, Hindalco down by 2.19%, ITC down by 1.77%, SBI down by 1.72%, ICICI Bank down by 1.63% and Coal India down by 1.28% were the top losers.

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.