Indian markets reel under global pressure; settle with loss of over half a percent

Indian equity markets concluded the week on a daunting note with the benchmark indices suffering nasty lacerations of over half a percent in Friday's session. The frontline gauges failed to showcase any kind of resilience through the session and kept drifting to lower levels, to eventually settle around the psychological 9,200 (Nifty) and 29,700 (Sensex) levels. Market participants turned skittish after the United States launched cruise missiles against an air base in Syria, raising the risk of confrontation with Syrian backers Russia and Iran. Facing his biggest foreign policy crisis since taking office in January, Trump took the toughest direct U.S. action yet in Syria's six-year-old civil war. On the domestic front, sentiments were undermined as Reserve Bank of India (RBI) projected retail inflation to increase to 5% in the second half of the current fiscal citing risks of El Nino impacting the monsoon and one-off effects of the Goods and Services Tax. The central bank also said that a prominent risk could emanate from managing the implementation of the allowances recommended by the 7th Central Pay Commission (CPC). Investors got nervous as rupee surged to 20-month high, by extending gains to as much as 64.15 per dollar, it’s highest since August 2015. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports, while it also make the country's other major exporters less competitive. Meanwhile, telecom stocks Bharti Airtel and Idea Cellular rose after rival Reliance Jio Infocomm, a unit of Reliance Industries, withdrew its summer surprise offer to subscribers. Further, Avenue Supermarts, which runs a chain of retail stores under the D-Mart brand, rallied after rating agency CRISIL upgraded its ratings on the bank facilities of the company.

On the global front, Asian stocks ended mixed on Friday as geopolitical concerns grew after the United States launched cruise missiles against an air base in Syria. Eyes are also on Florida as Chinese President Xi Jinping and Donald Trump kicked off a two-day meeting after the US tycoon's accusations that Beijing was killing US jobs and manipulating its currency to give it a trade advantage. However, Chinese market ended higher, led by the Shanghai benchmark closing at a 15-month high, with risk appetite lifted by Beijing's decision to launch a new economic zone in Hebei province. Oil prices surged to a one-month high on concerns the military intervention could impact supplies from the Middle East. Meanwhile, European markets declined in early trade, weighed down by weakness in mining stocks as investors locked in some profits following the sector's stellar run this year.

Back home, the local indices got off to a somber opening, extending the downtrend for the second straight session as pessimistic sentiments prevailed across Asian markets. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. The key gauges suffered a setback in late afternoon trades as sudden bouts of selling emerged in the local markets. Finally, the NSE's 50-share broadly followed index - Nifty plunged by over half a percent to settle below the crucial 9,200 support level, while Bombay Stock Exchange's Sensitive Index - Sensex took a triple digit cut and closed tad above the psychological 29,700 mark. The market breadth remained pessimistic, as there were 1277 shares on the gaining side against 1640 shares on the losing side, while 125 shares remained unchanged.

Finally, the BSE Sensex decreased 220.73 points or 0.74% to 29706.61, while the CNX Nifty was down by 63.65 points or 0.69% to 9,198.30. 

The BSE Sensex touched a high and a low of 29886.12 and 29668.45, respectively and there were 7 stocks on gainers side as against 23 stocks on the losers side on the index.

The broader indices ended in red; the BSE Mid cap index declined 0.30%, while Small cap index was down by 0.47%.

The top gaining sectoral indices on the BSE were Telecom up by 0.75%, Oil & Gas up by 0.48% and Capital Goods up by 0.10%, while Healthcare down by 1.43%, Metal down by 1.24%, Realty down by 1.19%, Bankex down by 0.96% and Basic Materials down by 0.75% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.14%, Bajaj Auto up by 1.13%, Bharti Airtel up by 0.83%, Hero MotoCorp up by 0.35% and NTPC up by 0.27%. On the flip side, Sun Pharma down by 3.04%, Lupin down by 2.61%, Adani Ports & SEZ down by 2.37%, Reliance Industries down by 2.28% and Dr. Reddy’s Lab down by 1.97% were the top losers.

Meanwhile, paving way for the rollout of the much-awaited Goods and Services Tax (GST) from July 1, the Rajya Sabha has approved four supplementary GST legislations- the Central GST Bill, the Integrated GST Bill, the GST (Compensation to States) Bill and the Union Territory GST Bill, without any amendments. The bills were returned by the Rajya Sabha after negation of a host of amendments moved by the opposition parties. These bills will now be presented before the President for his consent, following which, all the states will have to pass the States GST Bill after that the new indirect tax regime can be rolled out.

Finance Minister Arun Jaitley participating in the debate insisted that the GST, which will usher in a uniform indirect tax regime in the country, will not lead to inflation as apprehended by some sections. He also said the successive governments have contributed towards the GST and no one person can take credit for it. With implementation of the GST, revenue of the Centre, the states and the industry and trade must benefit, he added.

The GST Council, in its meeting had recommended a four-tier tax structure -- 5, 12, 18 and 28 per cent. On top of the highest slab, a cess will be imposed on luxury and demerit goods to compensate the states for revenue loss in the first five years of GST implementation. Besides, the rates are to be discussed by the GST Council on May 18-19.

The CNX Nifty traded in a range of 9,250.50 and 9,188.10. There were 14 stocks in green as against 37 stocks in red on the index.

The top gainers on Nifty were BPCL up by 4.58%, IOC up by 3.02%, Bharti Infratel up by 2.59%, TCS up by 1.33% and Bharti Airtel up by 0.89%. On the flip side, Bank of Baroda down by 3.66%, Sun Pharma down by 2.90%, Lupin down by 2.77%, Adani Ports & SEZ down by 2.41% and Kotak Mahindra Bank down by 2.39% were the top losers.

The European markets were trading mostly in red; Germany’s DAX decreased 62.06 points or 0.51% to 12,168.83, France’s CAC decreased 14.14 points or 0.28% to 5,107.30, while UK’s FTSE 100 increased 3.02 points or 0.04% to 7,306.22.

Asian made a mixed closing on Friday due to escalating geopolitical worries after the US bombed a Syrian regime target for the first time since the country's civil war began in 2011, in retaliation for this week's gruesome chemical weapons attack against civilians. Also, investors awaited cues from the meeting between leaders of the world's two biggest economies and the US employment report slated for release later in the day. A statement from the White House said that President Donald Trump and Chinese President Xi Jinping will discuss global, regional and bilateral issues of mutual concern. Meanwhile, Chinese stocks ended higher, led by the Shanghai benchmark closing at a 15-month high, with risk appetite lifted by Beijing's decision to launch a new economic zone in Hebei province.