Indian markets prolong the somber run for second straight session

Thursday's trading session turned out to be an abysmal end of the week for the Indian equity markets as they prolonged the somber run for yet another session and deposed over half a percent 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 1.2% in February against a 3.3% rise in January, while Consumer inflation accelerated to 3.81% in March largely due to increased fuel prices. The decline in Industrial production was broad-based with manufacturing contracting 2%, mining reporting a 3.3% rise in February and electricity generation stagnant at 0.3%. Besides, a weak trend in other global markets on continued geopolitical tensions and comments by President Donald Trump expressing concern about a strong greenback, also dampened trading sentiment. Adding the woes, the country's second-largest software services company Infosys has posted lower-than-expected January-March earnings. Infosys has reported marginal rise of 0.17% 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. Furthermore, the company's revenue outlook and plan to return cash to shareholders fell short of expectations, raising concerns at the start of the earnings-reporting season. The company expects its 2017-18 revenue to grow between 6.1% and 8.1% in dollar terms and 6.5-8.5% in constant currency terms.

On the global front, Asian markets ended mostly lower on Thursday after the US dollar slumped and Treasury bond yields dropped to the lowest level this year in reaction to President Donald Trump's comments that the greenback was getting too strong and that he won't brand China a currency manipulator. Japanese markets declined for a third day, though they pared the day's worst losses as the yen erased an earlier gain, while Hong Kong stocks gained after China's overseas shipments last month jumped the most in two years as global demand held up. Global equity markets are entering a key period, with earnings season ramping up against a backdrop of mounting geopolitical tensions around Syria and North Korea as well as elections in Europe. Meanwhile, European shares fell in early trade, leaving an index of the continent's top companies set for a weekly loss with banks the biggest drag.

Back home, after getting a weak start, the local benchmarks traded in tight range below neutral line for most part of the trade, but witnessed a sharp selling in late afternoon trades post opening of European markets. Eventually, the NSE's 50-share broadly followed index Nifty, suffered over half a percent cut to settle near the crucial 9,150 support level, while Bombay Stock Exchange's Sensitive Index, Sensex slipped by over one hundred and fifty points and closed below the psychological 29,500 mark. However, broader markets managed to outperform the larger peers as the BSE's midcap and smallcap indices settled with moderate gains.

Finally, the BSE Sensex decreased 182.03 points or 0.61% to 29461.45, while the CNX Nifty was down by 52.65 points or 0.57% to 9,150.80. 

The BSE Sensex touched a high and a low of 29660.48 and 29442.26, respectively and there were 12 stocks on gainers side as against 18 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.03%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.04%, Realty up by 0.92%, Energy up by 0.75%, Healthcare up by 0.64% and PSU up by 0.49%, while Metal down by 2.84%, IT down by 2.73%, TECK down by 2.62%, Telecom down by 2.15% and Basic Materials down by 1.66% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.39%, Power Grid up by 0.94%, Reliance Industries up by 0.75%, HDFC up by 0.61% and Asian Paints up by 0.49%. On the flip side, Infosys down by 3.86%, Bharti Airtel down by 3.03%, Tata Steel down by 2.92%, TCS down by 2.77% and Tata Motors down by 2.63% were the top losers.

Meanwhile, the Union Cabinet chaired by the Prime Minister Narendra Modi has given its approval for setting up of a special purpose vehicle to be called Government e-Marketplace (GeM SPV) as the National Public Procurement Portal. The SPV will be set up as Section 8 Company registered under the Companies Act, 2013, for providing procurement of goods & services required by various government departments, organizations and public sector undertakings (PSUs).

The move is aimed at making GeM an autonomous body, which would help in taking all the decisions including those related to finance at a faster pace. The GeM SPV will provide an end-to-end online marketplace for central and state government ministries, departments, Public Sector Undertakings, autonomous institutions and local bodies, for procurement of common use goods and services in a transparent and efficient manner. It will also provide the tools of e-bidding and reverse e-auction as well as demand aggregation to facilitate the government users to achieve the best value for the money.

The commerce ministry last year had launched GeM for online purchase of goods and services to bring in more transparency and streamlining government procurement, projected at Rs 10,000 crore a year. Presently, over 9,000 products from 250 categories, including computers, stationery and several services, are registered by different vendors on the portal. Meanwhile, the Cabinet also decided that Directorate General of Supplies & Disposal (DGS&D) shall be wound up and cease its functions by October 31, 2017. 

The CNX Nifty traded in a range of 9,202.65 and 9,144.95. There were 17 stocks in green as against 34 stocks in red on the index.

The top gainers on Nifty were IOC up by 3.12%, Indiabulls Housing up by 2.17%, Bank of Baroda up by 1.92%, BPCL up by 1.62% and Sun Pharma up by 1.21%. On the flip side, Hindalco down by 5.13%, Infosys down by 3.71%, Bharti Infratel down by 3.28%, Tata Steel down by 3.05% and Tata Motors DVR down by 2.77% were the top losers.

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.