Post Session: Quick Review

Intra-day trend reversal which took place in the last hour of trade mainly led to negative session of trade at Dalal Street on Tuesday that dragged Sensex and Nifty below psychologically crucial 29,400 and 9,150 levels, respectively with losses of around one third of a percent. Local barometer gauges, otherwise in the entire session traded jubilantly as sentiments remained up-beat with the World Bank’s latest report, in which it said that India’s economic momentum is expected to pick up speed from 6.8 percent in 2016 to 7.2 percent by 2017 after a modest setback due to weaker than expected investments and the effects of the withdrawal of large denomination bank notes. It also said that timely and smooth implementation of the GST could prove to a significant benefit to economic activity.

However, markets erasing all the gains suddenly took a U-turn in last hour of trade as profit-booking activities witnessed at higher levels. Weakness in Indian rupee against dollar dampened sentiments. The rupee depreciated 8 paise to 64.59 at the time of equity markets closing, as the dollar pulled away from five-month lows, with comments from US Treasury Secretary Steven Mnuchin and higher debt yields giving the bruised greenback some breathing space. Meanwhile, India Meteorological Department’s (IMD) said that monsoon rainfall may be 96% of the normal with an error margin of 5% on either side. IMD further said that there are more than 50% chances of El-Nino developing from August.

Weak opening in European counters too dampened sentiments, as tensions between North Korea and the U.S. intensified and European monitors criticized Turkey’s referendum. Asian markets ended mixed, as geopolitical tensions took a backseat following a failed missile test by North Korea at the weekend and US Vice President Mike Pence continuing his tour of Asia.

Closer home, with intra-day trend reversal most of the sectoral indices on BSE succumbed to selling pressure, nevertheless stocks from Utilities and Power counters managed to conclude the session into positive territory. On the flip side, massive drubbing was witnessed by stocks from Realty, Metal and Energy counters which were the prominent losers of the session.

In stock-related action, Coal India was down by over two percent on concerns over limited divestment in the company. Recently Coal Controller’s Organization has downgraded 177 of Coal India’s 413 mines, potentially impairing the monopoly miner’s profitability. Stocks of United Breweries and United Breweries (Holdings) edged lower by over two percent each after Businessman Vijay Malya has reportedly been arrested in London by Scotland Yard just weeks after UK set in motion the process of extradition of the industrialist who has been declared a proclaimed offender.

The market breadth was in the favour of decliners, as there were 1,120 shares on the gaining side against 1,769 shares on the losing side while 137 shares remain unchanged. (Provisional)

The BSE Sensex ended at 29319.10, down by 94.56 points or 0.32% after trading in a range of 29286.38 and 29701.19. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.63%, while Small cap index was down by 0.74%. (Provisional)

The only gaining sectoral indices on the BSE were Utilities up by 0.27% and Power was up by 0.03%, while Realty down by 3.48%, Metal down by 1.81%, Energy down by 1.04%, Healthcare down by 0.94% and Telecom down by 0.94% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 1.60%, Wipro up by 0.93%, HDFC Bank up by 0.68%, ICICI Bank up by 0.46% and Power Grid Corporation up by 0.32%. On the flip side, Tata Steel down by 2.55%, Coal India down by 2.34%, Sun Pharma down by 1.76%, Asian Paints down by 1.68% and Reliance Industries down by 1.48% were the top losers. (Provisional)

Meanwhile, the World Bank in latest report titled ‘Globalization Backlash’, has said that India’s GDP is expected to see uptick from 6.8 per cent in 2016-2017 to 7.2 per cent by current fiscal year and rise further to 7.5 per cent in 2018-19 fiscal. It also forecasted that India’s economic growth will rise slowly to 7.7 per cent in 2019-2020 supported by a recovery in private investments. It noted that the economic growth slowed down to 6.8 per cent in 2016-17 on the back of weak investments and the impact of demonetization. It also stressed that the GDP slowed to 7 per cent during the third quarter of 2016-17, from 7.3 per cent during the first half of the fiscal.

According to the report, the significant risks to economic growth could derive from fallout of note ban on small and informal economy, stress in the financial sector along with uncertainty in global environment. It also pointed out that a rapid hike in the prices of oil and other commodities could have a negative implication for the economy. However, it suggested that timely and smooth implementation of the GST could prove to a significant uptick risk to economic activity in 2017-18.

The report further said that India’s fiscal, inflation and external conditions are expected to remain stable. It also said that the centre will continue to consolidate modestly, while retaining the push towards infrastructure spending. The report stated that the country’s inflation will stabilize, underpinned by favourable weather and structural reforms. It added that normal monsoons have so far offset increases in petroleum prices.

Specifying about the external factor, it said that exchange rate has appreciated, partly reflecting expectations of a narrowing inflation gap between India and the US and limited external vulnerabilities as the current account deficit is expected to remain below 2 per cent of the GDP and fully financed by FDI inflows. It added that challenges to India’s favourable growth outlook could stem from continued uncertainties in the global environment, including rising global protectionism and a sharp slowdown in the Chinese economy, which could further delay a meaningful recovery of external demand.

The CNX Nifty ended at 9105.15, down by 34.15 points or 0.37% after trading in a range of 9095.45 and 9217.90. There were 14 stocks advancing against 37 stocks declining on the index. (Provisional)

The top gainers on Nifty were Aurobindo Pharma up by 1.75%, Indian Oil Corporation up by 1.51%, NTPC up by 1.51%, Hindalco up by 1.30% and HDFC Bank up by 0.73%. On the flip side, Tata Steel down by 2.70%, Ambuja Cement down by 2.47%, Coal India down by 2.29%, Eicher Motors down by 2.27% and Bharti Infratel down by 2.16% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX declined 76.89 points or 0.63% to 12,032.11, UK’s FTSE 100 dropped 71.17 points or 0.97% to 7,256.42 and France’s CAC was down by 64.32 points or 1.27% to 5,006.78.

Asian equity markets ended on a mixed note on Tuesday as geopolitical tensions took a backseat following a failed missile test by North Korea at the weekend and US Vice President Mike Pence continuing his tour of Asia. Pence met with Japanese Prime Minister Shinzo Abe on the second leg of his tour of the region, where he said the US would work with its allies in dealing with North Korea. Chinese shares ended lower amid worries over increasing regulation and the sustainability of the country's economic growth. Stronger than expected first quarter GDP and March economic data on Monday failed to impress investors, who fear momentum will begin to fade in coming months. Hong Kong shares ended down as traders returned from the Easter long weekend. Meanwhile, Japanese shares ended higher as a weaker yen offered some respite to exporters.