Post Session: Quick Review

Erasing some of their initial losses, Indian equity benchmarks ended Wednesday’s trade in red with cut of around half a percent. The equity benchmarks made a dismal start in early deals on account of geo-political tug-of-war over West Asia and the Korean Peninsula which weighed on the domestic sentiments. Foreign portfolio investors sold shares worth Rs 635.79 crore in domestic equity markets on Tuesday with gross purchases and gross sales of Rs 3773.59 crore and Rs 4409.38 crore, respectively. Investors also turned cautious ahead of Infosys earnings due on April 13. The country’s second largest software services exporter is expected to show subdued bottom-line growth for January-March quarter but the key factor to watch out for would be its guidance for FY18 and whether the company will meet its FY17 dollar revenue guidance or not. Some selling also crept in after leading exporters’ body EEPC India raised a red flag against the debilitating impact of sharp rise in rupee against dollar in the last three months on exports, which may slip off from the recovery path, if the situation persists further. Since the first week of January, rupee has gained by close to six percent, eroding significantly the exporters’ margins and more importantly the competitive edge against India’s trade rivals in the international markets. Meanwhile, investors turned jittery over Former finance minister P Chidambaram’s comment that a more realistic deadline for rolling out the goods and services tax was October 1, instead of the scheduled date of July 1. While maintaining GST would be good for the country in the long-term, the senior Congress leader cautioned the government saying that implementation of the mega tax reform could be inflationary in the short-term. He cited the preparation time needed for small and medium-scale enterprises to get on to the new tax reform structure and the time needed for activating the GSTN platform as the main reasons why he thought October was a more realistic deadline.

On the global front, Asian markets closed mixed, as tensions continue to ratchet up on the Korean Peninsula following a warning from North Korea of a nuclear attack on the US. North Korea had warned of a nuclear attack on the United States at any sign of aggression, as a US Navy strike group steamed toward the Korean peninsula - a force President Donald Trump described as an armada. European markets were trading in green ahead of the French presidential election. The jobless rate in the UK surprised with a slight drop to a fresh 11-year low in February, while wage inflation increased more than expected.

Back home, select sugar stocks closed in green on reports that sugar prices are expected to remain firm in sugar season 2017 (SS2017) because closing inventory is expected to be at an 8-year-low following a fall in production in Maharashtra and Karnataka. That’s despite the government’s recent move to allow duty-free import of raw sugar of 0.5 million tonne up to June 12, 2017, and reduction in consumption due to demonetization.

The BSE Sensex ended at 29634.60, down by 153.75 points or 0.52% after trading in a range of 29549.74 and 29838.82. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.19%, while Small cap index was down by 0.46%. (Provisional)

The few gaining sectoral indices on the BSE were Realty up by 1.04%, Healthcare up by 0.73% and Telecom up by 0.30%, while Utilities down by 1.40%, Power down by 1.15%, Consumer Durables down by 0.97%, Industrials down by 0.78% and PSU down by 0.70% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 2.30%, Hero MotoCorp up by 0.99%, Dr. Reddy’s Lab up by 0.56%, Bajaj Auto up by 0.55% and Bharti Airtel up by 0.53%. (Provisional)

On the flip side, Tata Steel down by 2.06%, Adani Ports & Special Economic Zone down by 2.05%, Wipro down by 2.03%, GAIL India down by 1.87% and NTPC down by 1.65% were the top losers. (Provisional)

Meanwhile, amid growing demand to write off farm loans, Minister of State for Finance Santosh Kumar Gangwar has said that there is no proposal under consideration of the union government, to waive loans of farmers of the country but major initiatives have been taken by the government to reduce the debt burden. He noted that the schemes are available to reduce costs by timely repayment of the amount borrowed.

Talking about the government initiatives to help the farmers, Gangwar said that under the Department of Agriculture, Cooperative & Farmers' Welfare with an interest subvention scheme, the government provides short-term crop loans up to Rs 3 lakh at subsidised interest rate of 7 per cent per annum. Besides, an additional incentive of 3 per cent is provided to farmers for prompt repayment of loans within due date, making an effective interest rate for them at 4 per cent.

Gangwar also said that lending agencies are instructed to provide relief measures in cases of natural calamities that not only restructures existing crop loans but also extends fresh loans.  He further said that the benchmark for initiating relief measures by banks has also been reduced to 33 per cent crop loss in line with the National Disaster Management Framework.

The CNX Nifty ended at 9201.10, down by 35.90 points or 0.39% after trading in a range of 9161.80 and 9246.40. There were 19 stocks advancing against 32 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bosch up by 3.38%, Bharti Infratel up by 3.22%, Sun Pharma up by 2.31%, Eicher Motors up by 1.91% and BPCL up by 1.21%. (Provisional)

On the flip side, Tata Steel down by 2.15%, Hindalco down by 1.99%, GAIL India down by 1.99%, Zee Entertainment down by 1.96% and Adani Ports & Special Economic Zone down by 1.90% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 26.82 points or 0.36% to 7,392.32, Germany’s DAX increased 53.81 points or 0.44% to 12,193.16 and France’s CAC increased 24.22 points or 0.47% to 5,126.08.

Asian equity markets made a mixed closing on Wednesday, with Japanese shares ending lower as rising geopolitical tensions curbed risk appetite, with exporters badly hit as the safe-haven yen spiked to a five-month high. The dollar fell under 110 yen for the first time in five months and gold prices hit five-month highs after North Korean state media warned of a nuclear attack on the United States at any sign of American aggression. US President Donald Trump wrote on Twitter that he explained to China last week that a trade deal with the US will be far better for them if they solve the North Korean problem. Meanwhile, a rise in oil prices on reports that Saudi Arabia wants output cuts extended for another six months, supported market sentiment. Chinese stocks ended lower, as softer producer inflation data raised questions on the sustainability of the country's economic recovery and some shares that had rallied on plans for a new economic zone lost steam. China's producer price inflation cooled for the first time in seven months in March as iron ore and coal prices tumbled, pressured by fears that the country's steel production is outweighing demand and threatening a glut of the metal this year.