Post Session: Quick Review

Paring early gains, equity markets ended in red with Nifty and Sensex breaching their crucial 9,200 and 29,600 levels respectively. Traders eyed key economic numbers like Index of Industrial Production (IIP) for February and Consumer Inflation for March scheduled to be released on Wednesday. The equity benchmarks made a positive start and traded slightly in green in early deals as traders took support with CII Business Confidence Index released during the weekend, which said that India Inc.’s perceptions about the state of the economy slid in the last quarter of 2016-17, yet industry’s confidence levels about the future have peaked to their highest level in more than six years. Foreign investors have pumped in a staggering $2.45 billion in capital markets in the last four sessions on the back of improved investor sentiments driven by passage of GST bills and growth in manufacturing sector. This comes following a record net inflow of Rs 56,944 crore ($8.7 billion) last month, mainly on expectations that BJP’s victory in recently held assembly polls would lead to faster reforms.

Selling crept in with credit rating agency, Fitch stating that the government’s excessive backing to banks in order to deal with stressed assets and loose macro-economic policy that could stoke inflation, would prove ‘negative’ for Indian economy. However, the agency noted that government's fiscal initiatives would help the country to reduce debt burden more rapidly than expected in the medium term. Information Technology (IT) stocks exerted pressure after Gartner report, highlighted that worldwide IT spending is projected to total $3.5 trillion in 2017, a 1.4% increase from 2016. This growth rate is down from the previous quarter’s forecast of 2.7%, due in part to the rising US dollar. Meanwhile, investors took note of former finance minister P Chidambaram statement that a rush to roll out the new tax regime from July 1 could be detrimental and fitment of items holds the key to the success of the new tax regime. He added that the GST Bills are far from perfect and several provisions could call for amendments over the coming two years or so.

On the global front, Asian markets closed mixed, as the increased geopolitical risks combined with expensive valuations prompted investors to shun risky assets in favour of safe-haven bets such as government debt. Japan’s Nikkei closed in green with a weaker yen lifted carmakers and other exporters. The Bank of Japan offered its most optimistic view of the country’s regional economies in nearly a decade, even as some firms warned that uncertainty over US President Donald Trump’s trade policies could affect their capital expenditure plans. European stocks traded lower with no major economic reports while investors kept an eye on geopolitical risks and digested corporate news flow.

Back home, majority of liquor stocks closed in red after Madhya Pradesh Chief Minister Shivraj Singh Chouhan announced that all liquor shops would be closed across the state in a phased manner. In the first phase, the state government closed all the shops falling within a radius of five kilometers from the banks of river Narmada on either side. In the next phase, the liquor shops would not be allowed to open in residential localities, near educational institutes or religious places.

The BSE Sensex ended at 29571.00, down by 135.61 points or 0.46% after trading in a range of 29553.04 and 29831.32. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.73%, while Small cap index was up by 0.66%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.03%, Oil & Gas up by 0.91%, PSU up by 0.89%, Basic Materials up by 0.81% and Industrials up by 0.79%, while IT down by 1.85%, TECK down by 1.30%, Consumer Durables down by 0.43%, Realty down by 0.19% and Utilities down by 0.09% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 1.60%, Axis Bank up by 1.46%, Adani Ports & Special Economic Zone up by 1.18%, Coal India up by 1.07% and Tata Steel up by 0.47%. (Provisional)

On the flip side, Infosys down by 3.00%, Asian Paints down by 1.92%, Wipro down by 1.71%, Reliance Industries down by 1.53% and HDFC down by 1.28% were the top losers. (Provisional)

Meanwhile, in order to manage government borrowing programme, the Finance Ministry is likely to set up a full-fledged independent public debt management agency (PDMA) by the end of 2018, which would help to resolve issues relating to conflict of interest as RBI decides on the key interest rates as well as undertakes buying and selling of government bonds.

At present, the government debt, including market borrowings, is managed by the Reserve Bank of India. Last year, moving towards an independent PDMA, the Finance Ministry as an interim arrangement had set up a Public Debt Management Cell (PDMC) at RBI's Delhi office, to allow separation of debt management functions from RBI to PDMA in a gradual and seamless manner, without causing market disruptions and it has given the overall charge of the PDMC to the Joint Secretary (Budget), Department of Economic Affairs.

Currently, the PDMC has only advisory functions to avoid any conflict with the statutory functions of the RBI. PDMC has been tasked to plan government borrowings, including market borrowings and other borrowings, like Sovereign Gold Bond issuance. Other functions of PDMC are to manage government's liabilities, monitor cash balances, improve cash forecasting and foster a liquid and efficient market for government securities.

The CNX Nifty ended at 9176.95, down by 21.35 points or 0.23% after trading in a range of 9174.85 and 9225.65. There were 29 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indian Oil Corporation up by 3.37%, BPCL up by 3.21%, Grasim Industries up by 3.14%, Yes Bank up by 2.98% and Bharti Infratel up by 2.42%. (Provisional)

On the flip side, Infosys down by 3.08%, Asian Paints down by 2.21%, Indiabulls Housing down by 2.09%, HCL Technologies down by 1.91% and Wipro down by 1.57% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 2.61 points or 0.04% to 7,346.76, Germany’s DAX decreased 31.06 points or 0.25% to 12,194.00 and France’s CAC decreased 31.14 points or 0.61% to 5,104.14.

Asian equity markets made a mixed closing on Monday as a weaker yen and higher oil prices helped offset worries over rising geopolitical tensions and weaker than expected US jobs data. Latest employment report stated that the US economy created just 98,000 new jobs in March, well below the 185,000 consensus figure that was forecast. The unemployment rate, however, fell to 4.5% from 4.7% as the number of people who found work outstripped the labor force. Japanese shares ended higher as the dollar rose for a third day against the yen after comments from a top Federal Reserve official reinforcing the central bank's commitment to interest rate hikes. Meanwhile, Chinese stocks fell after the country's chief insurance regulator came under investigation by its anti-corruption agency.