Post Session: Quick Review

Indian frontline indices snapped a three day losing streak on Tuesday with Nifty and Sensex settling above their crucial psychological 9,200 and 29,700 levels, respectively.  Optimistic buying in blue-chip stocks ahead of Index of Industrial Production (IIP) data for February and retail inflation for March scheduled to be released on Wednesday kept stocks on course. The equity benchmarks made a positive start and traded in fine fettle in early deals as traders took note of a report that India’s oil consumption fell for the third straight month in March as the demand growth in diesel, petrol and other products came to a crawl. The oil demand fell by 0.65% in March to 17,358 thousand metric tonnes (TMT). The country consumed 6,805 TMT of diesel in March, compared with 6,783 TMT in the year-ago period. Demand for petrol was 2,106 TMT as against 2,047 TMT in March 2016. Meanwhile, a government official said that India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, allowing most goods to make it to the lower bracket. A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%. Investors shrugged off report that foreign portfolio investors (FPIs) sold shares worth net Rs 558.25 crore on April 10, 2017. Investors remained cautious with the report that India’s inflation is seen climbing to within touching distance of the central bank’s 4% medium-term target in March, driven by higher food costs. According to the report, having sunk to its lowest level for at least five years in January, consumer price inflation is expected to have risen to 3.98% last month from February's 3.65%.

On the global front, Asian markets closed mostly in red, as concerns over geopolitical tensions continue to build. China stocks reversed earlier losses to end higher led by the Shanghai benchmark index closing at a 15-month high. Bank of Japan Governor Haruhiko Kuroda said the central bank is aiming for a moderate acceleration of inflation driven by increases in wages and corporate earnings. He said wages have not increased as much as hoped for despite a tightening job market. European shares were trading mostly in red as banks and tech stocks weighed, led lower by a slump in Dialog Semiconductor’s shares, though energy stocks provided support.

Back home, Tata Power and Adani Power closed in red after Supreme Court set aside Appellate Tribunal for Electricity (APTEL) order in the compensatory tariff case. The apex court set aside the electricity regulator’s order that allowed companies to charge compensatory tariff due to rise in costs of coal.

The BSE Sensex ended at 29793.53, up by 217.79 points or 0.74% after trading in a range of 29570.58 and 29804.51. There were 18 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.33%, while Small cap index was up by 1.02%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 1.50%, FMCG up by 1.47%, Realty up by 1.39%, PSU up by 1.38% and Telecom up by 0.98%, while Metal down by 1.57% and Basic Materials down by 0.31% were the only losers on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 2.82%, Power Grid up by 2.26%, Larsen & Toubro up by 1.81%, ICICI Bank up by 1.75% and SBI up by 1.70%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 4.91%, Cipla down by 1.69%, Tata Steel down by 1.36%, Bajaj Auto down by 0.69% and Maruti Suzuki down by 0.40% were the top losers. (Provisional)

Meanwhile, indicating a slight decline in manufacturing activity during the January-March quarter (Q4), industry body, the Federation of Indian Chambers of Commerce and Industry (FICCI) has said that increased cost of production due to rise in minimum wages and raw material costs along with hardening of commodity prices in the international market has impacted manufacturing competitiveness.

FICCI latest quarterly survey on 'Indian manufacturing sector' which assessed the expectations of manufacturers for Q-4 (January-March 2017) for twelve major sectors, noted that the proportion of respondents expecting higher growth during the January-March 2017 quarter has slightly fallen to 46 per cent as against 48 per cent (revised) for October-December 2016-17 and the percentage of respondents reporting fall in exports reduced to 18 per cent in the fourth quarter from 30 per cent in the previous quarter.

In terms of order books, almost 47 per cent respondents reported higher order books for the fourth quarter as compared to 48 per cent in October-December quarter of last year, which is almost the same. Besides, hiring outlook remains subdued in manufacturing in coming months as 77 per cent of the participants said that they are unlikely to hire additional workforce in next three months.

However, in terms of capacity utilisation, there was a decline and over 35% respondents in the January-March 2017 quarter as compared to 43% respondents in previous quarter reported to have higher capacity utilization. Accordingly, the future investment outlook was less optimistic, with 75% respondent in Q-4 (Jan-March 2017) as against 77% respondents in Q-3 (October-December 2016) reporting that they don’t have any plans for capacity additions for the next six months. Responses were drawn from 320 manufacturing units from both large and SME segments with a combined annual turnover of over Rs 3.8 lakh crore.

The CNX Nifty ended at 9236.25, up by 54.80 points or 0.60% after trading in a range of 9172.85 and 9242.70. There were 31 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were ITC up by 3.14%, ICICI Bank up by 2.12%, Ambuja Cement up by 2.08%, Power Grid up by 2.00% and Bank of Baroda up by 1.99%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 5.32%, Zee Entertainment down by 2.29%, Tata Power down by 1.78%, Cipla down by 1.65% and Tata Steel down by 1.48% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 20.65 points or 0.17% to 12,179.87, France’s CAC decreased 5.54 points or 0.11% to 5,101.91, while UK’s FTSE 100 increased 35.63 points or 0.48% to 7,384.57.

Asian equity markets ended mostly in red on Tuesday as rising geopolitical tensions in the Middle East and the Korean peninsula as well as uncertainty over the French election kept investors nervous. Japanese shares retreated as a stronger yen amid rising geopolitical tensions put pressure on exporters. However, Chinese shares bucked the weak trend to hit 15-month highs after Beijing on Saturday announced plans to build Xiongan New Area, modelled on the Shenzhen special economic zone next to Hong Kong that helped kick start China's economic reforms in 1980.