Post Session: Quick Review

Indian equity markets witnessed a choppy trade with the movement restricted within a tight range around the neutral line for most part of the day and closed with modest gains. The domestic stocks struggled for direction amid lower global cues and as investors turned cautious ahead of a slew of corporate results, particularly banks. The equity benchmarks made a cautious start and traded marginally in red with the report that the International Monetary Fund (IMF) has cut India’s annual growth estimate for 2017 by 0.4 percentage points to 7.2 percent, mainly owing to temporary negative consumption shock induced by cash shortages and payment disruptions from recent currency note withdrawal and exchange initiative. Adding the woes, Information Technology (IT) sector exerted pressure after India’s largest software services exporter, Tata Consultancy Services (TCS) missed estimates on both the profit and revenue front with negative growth in the BFSI and retail segments. Banking stocks were under pressure after the Reserve Bank of India ordered banks to consider raising provisioning for even standard assets as a precautionary measure, and singled out telecom sector to be considered immediately for provisioning amid intense competition eroding the sector’s profitability.

Sentiments, however, was supported by India Meteorological Department’s (IMD’s) statement that India will get normal rainfall this monsoon season, somewhat allaying fears that an El Nino phenomenon may disrupt the weather system that’s the lifeline for the country’s rural economy. The June-September monsoon rainfall this year is expected to be 96% of the long-term average with a 5% error margin bringing relief to millions of farmers in the country. Separately, some support also came with report that India has jumped one spot to 8th rank in the 2017 on Global FDI Confidence Index. Governance and regulatory issues made up 7 of the top-10 factors that investors consider when deciding on an investment destination according to the report.

On the global front, Asian markets closed mostly in red, as investors turned jittery after British Prime Minister Theresa May’s surprise decision to hold early elections. China’s main indexes fell for their fourth straight session as investors’ worries deepened that tighter regulations against speculation and shadow banking will hurt the country’s credit-fuelled recovery. Japan stocks closed in green as gains in the Warehousing, Banking and Paper & Pulp sectors led shares higher. European shares were trading higher as a rebound in basic resources stocks and some positive first-quarter results outweighed weakness in oil and gas stocks.

The BSE Sensex ended at 29367.16, up by 48.06 points or 0.16% after trading in a range of 29241.48 and 29383.36. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.73%, while Small cap index was up by 0.79%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 2.16%, Utilities up by 2.13%, Realty up by 1.44%, Metal up by 0.86% and Basic Materials up by 0.79%, while Bankex down by 0.38%, IT down by 0.32%, Healthcare down by 0.17% and TECK down by 0.08% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Power Grid up by 4.25%, Adani Ports & Special Economic Zone up by 2.16%, NTPC up by 1.64%, Asian Paints up by 1.54% and Maruti Suzuki up by 1.34%. (Provisional)

On the flip side, SBI down by 1.76%, Dr. Reddy’s Lab down by 0.66%, Hero MotoCorp down by 0.62%, ONGC down by 0.61% and ICICI Bank down by 0.55% were the top losers. (Provisional)

Meanwhile, in order to deepen the corporate bond market and ensure better price discovery avenues for investors, the capital market regulator, the Securities and Exchange Board of India (SEBI) is planning to put in place a framework for consolidation and re-issuance of debt securities, whose proposal will be discussed at the next meeting of SEBI.

The market regulator has taken a series of measures and with an increase in corporate bond issuances in recent years, it is looking at ways to boost overall liquidity in the debt securities segment. The proposal focuses on minimising the number of International Securities Identification Numbers (ISINs). The framework for securities issued under the 'Issue and Listing of Debt Securities' regulations of SEBI, would help in capping the fragmented issues and could be a possible solution to improve liquidity. Besides, a liquid corporate bond market would help in better price discovery ways.

Trading of corporate bonds in the secondary market has increased in last couple of years and stood at Rs 14.7 lakh crore in the last financial year, from just Rs 1.48 lakh crore in 2008-09 period. Besides, private placement of corporate bonds rose to Rs 6.4 lakh crore in 2016-17 compared to Rs 1.18 lakh crore in 2007-08.

The CNX Nifty ended at 9113.10, up by 7.95 points or 0.09% after trading in a range of 9075.15 and 9120.50. There were 24 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Power Grid up by 4.32%, Tata Power up by 2.93%, Bharti Infratel up by 2.88%, Adani Ports & Special Economic Zone up by 2.30% and NTPC up by 1.86%. (Provisional)

On the flip side, Aurobindo Pharma down by 3.58%, SBI down by 1.96%, Tech Mahindra down by 1.12%, Ultratech Cement down by 0.89% and ICICI Bank down by 0.88% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 2.21 points or 0.03% to 7,149.71, Germany’s DAX increased 39.48 points or 0.33% to 12,039.92 and France’s CAC increased 17.24 points or 0.35% to 5,007.49.

Asian equity markets ended mostly in red on Wednesday as lingering geopolitical tensions coupled with political uncertainty in Europe sent investors fleeing from riskier assets. A spate of tepid corporate earnings from the US also weighed on markets. Britain's parliament votes today on holding a snap election in June after Prime Minister Theresa May said she had decided ‘with reluctance’ that an election was needed to strengthen the government's hand as the country commences Brexit negotiations. France heads to the first round of presidential elections on Sunday, with opinion polls suggesting increased uncertainty regarding who will become the next president. Meanwhile, US President Donald Trump said that he didn't live up to a campaign promise to label China a currency manipulator because he believes China will resolve the crisis on the Korean Peninsula. Chinese shares closed lower, as commodity prices fell and investors remained skeptical about the prospects for faster economic growth. The IMF on Tuesday raised its economic growth forecast for China for this year and next but warned of serious longer-term problems unless it reduces its reliance on credit. However, Japanese shares closed marginally higher as the yen weakened slightly, helping lift exporters.