Post Session: Quick Review

Indian equity markets witnessed sharp sell-off for the second consecutive day with frontline gauges settling in red with cut of around six tenth of a percent points. The downward journey was on account of weak global cues and lower-than-expected results from Infosys for the March quarter. A weak trend in other Asian markets in line with sell-off in the US on continued geopolitical tensions and comments by President Donald Trump expressing concern about a strong greenback also dented the domestic sentiments. The equity benchmarks traded slightly in red in early deals as investors indulged in cutting down their bets on disappointing macroeconomic data. Industrial growth contracted unexpectedly in February while consumer inflation quickened to a five-month high in March, a double setback for the Indian economy as it enters the new financial year. Industrial production shrank by 1.2% in February against a 3.3% rise in January. However, consumer inflation accelerated to 3.81% in March largely due to increased fuel prices. The Reserve Bank of India last week kept interest rates unchanged citing inflation risks. Some selling also crept in after a private report highlighted that India’s GDP growth is likely to decelerate to 6.7 percent in March quarter but it will gradually recover to around 7.7 percent in 2018 supported by higher consumption and public spending. The private financial services major expects GDP to average 7.3 percent in the second half of 2017 and 7.7 percent in 2018 supported by higher consumption (state pay hikes, remonetisation, lower lending rates) and public spending.

Meanwhile, according to a survey, more than two-thirds of global investment professionals expect the geopolitical climate to affect investment returns over the next three to five years. And a full 70% of respondents expect these changes to negatively affect market performance. In the past nine months or so, the world has seen its share of upheaval, starting last June with the Brexit vote and continuing in November with the election of Donald Trump as president. Separately, a private report highlighted that even as the Central finances have improved over the years, the average fiscal deficit for the states has widened to over 3% of the gross state domestic product in fiscal 2017 and is likely to stay wide in 2017-18 as well. The Centre’s deficit has narrowed from 6.5% of the GDP in 2009-10 to 3.5% in 2016-17. It is projected at 3.2% in 2017-18. Adding the woes, IT sector too exerted pressure taking cues from the country’s second-largest software services company Infosys which posted lower-than-expected January-March earnings. Infosys has reported marginal rise of 0.17 percent in its consolidated net profit at Rs 3603 crore for the quarter ended March 31, 2017 as compared to Rs 3597 crore for the corresponding quarter in the FY16.

On the global front, Asian markets closed mostly in red, with Tokyo closing down on a strong yen and Shanghai gained after solid trade figures. China’s imports soared by 31.1% in yuan terms, with exports up 14.8% for the first quarter from a year ago. China reported a trade surplus of CNY 454.94 billion in the period. South Korea’s central bank raised its growth outlook for this year and kept interest rates unchanged at a record low for a 10th straight month, while its governor shifted policy to a more hawkish stance. The European markets were trading in red amid shares set for a weekly loss, with banks leading the losses.

The BSE Sensex ended at 29456.26, down by 187.22 points or 0.63% after trading in a range of 29442.26 and 29660.48. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.02%, while Small cap index was up by 0.18%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.03%, Realty up by 1.00%, Energy up by 0.72%, Healthcare up by 0.59% and PSU up by 0.45%, while Metal down by 2.91%, IT down by 2.58%, TECK down by 2.44%, Telecom down by 1.83% and Basic Materials down by 1.70% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 1.16%, Power Grid up by 0.91%, Reliance Industries up by 0.89%, HDFC up by 0.62% and Asian Paints up by 0.51%. (Provisional)

On the flip side, Infosys down by 3.70%, Tata Steel down by 3.07%, Bharti Airtel down by 2.65%, TCS down by 2.56% and Tata Motors down by 2.45% were the top losers. (Provisional)

Meanwhile, despite calls for further delaying the launch of long-awaited goods and services tax (GST), Revenue Secretary Hasmukh Adhia has said that the government is ready to roll out the GST and will launch it as planned on July 1 to boost economic growth and state revenues. In this regard Adhia asked the firms not to count on a postponement of a tax more than a decade in the making.

Noting that the entire parallel economy will vanish after rollout of the GST, the Revenue Secretary said that it would also transform the county’s $ 2 trillion economy and market of 1.3 billion people into a single economic zone with common indirect taxes - something that neither the European Union nor the United States can boast.

Adhia said that the government is expecting revenue buoyancy to go up as the benefit of avoiding tax which was accruing to the entrepreneur or to the trader - will now come to them. He expressed confident that indirect revenues would exceed a target of 9-10 percent in the fiscal year to March 2018 and added that expected revenue buoyancy would leave room to lower GST rates and simplify the tax structure.

The CNX Nifty ended at 9148.40, down by 55.05 points or 0.60% after trading in a range of 9144.95 and 9202.65. There were 17 stocks advancing against 34 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indian Oil Corporation up by 3.12%, Indiabulls Housing up by 2.17%, Bank of Baroda up by 1.83%, BPCL up by 1.62% and Sun Pharma up by 1.21%. (Provisional)

On the flip side, Hindalco down by 5.16%, Infosys down by 3.74%, Bharti Infratel down by 3.28%, Tata Steel down by 3.05% and Tata Motors - DVR down by 2.76% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 33.59 points or 0.46% to 7,315.40, Germany’s DAX decreased 31.85 points or 0.26% to 12,122.85 and France’s CAC decreased 23.75 points or 0.47% to 5,077.36.

Asian equity markets ended mostly in red on Thursday after the dollar and US Treasury yields stumbled following US President Donald Trump's comments that the greenback is getting too strong and his administration will not label China a currency manipulator. Trump also said that he preferred the Federal Reserve to keep interest rates relatively low. Japanese shares ended lower amid a stronger yen as Trump's comments on the dollar and interest rates as well as tensions over US relations with Russia and North Korea spooked investors. However, Chinese shares ended marginally higher as positive trade data helped investors shrug off fears of policy tightening. Official data showed that China's export growth accelerated in March in a positive sign for global demand, while import growth moderated. Exports surged an annual 16.4 percent in March, much faster than the 4.3 percent rise expected. Imports grew 20.3 percent from a year earlier.