Indian equity indices unable to gather stem; end on a flat note

Indian stock markets ended the range bound day of trade on a flat note as investors gauged the impact from British Prime Minister Theresa May's surprise decision to hold early elections. There was no major buying in any corner that could lift the markets and traders remained on sidelines ahead of the first-round presidential polls in France this weekend and amid brewing geopolitical tensions. Market participants also remained cautious with the report that IMF trimmed India's annual growth forecast by 0.4 percentage points to 7.2% for 2017, citing the temporary negative consumption shock induced by cash shortages and payment disruptions from the recent demonetization move. Adding the woes, 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. The company's net profit for the Q4 fell 2.5% sequentially to Rs 6,608 crore, while revenues declined 0.3% to Rs 29,642 crore. It's for the second consecutive quarter that it has underperformed Infosys. Further, several banking stocks came under pressure after IndusInd Bank missed estimates on profit front and ahead of Yes Bank earnings later today. IndusInd Bank reported a rise of 21.16% in its net profit at Rs 751.61 crore for the quarter ended March 31, 2017 as compared to Rs 620.35 crore for the same quarter in the previous year. Net Profit was adversely impacted by sharp jump in provisions despite stable asset quality. Provisions and contingencies jumped 101.32% to Rs 430.13 crore in the quarter from Rs 213.66 crore in the same quarter last year. However, sentiments got some support with the repot that India jumped one spot to 8th rank in the 2017 A.T. Kearney Foreign Direct Investment (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. Some support also came with the report that Foreign institutional investors (FIIs) have pumped in Rs 2618.02 crore in the domestic equity markets in April so far with gross purchases and gross sales of Rs 48894.31 crore and Rs 46276.29 crore, respectively. On a year-to-date basis, they have bought shares worth Rs 42250 crore, as per data available with depository NSDL.

On the global front, Asian markets ended mostly lower on Wednesday as investors fled to safer assets ahead of the French presidential election. France's presidential election is closely watched as the stakes for investors are high, with two anti-EU, anti-euro candidates among the four seen still in contention to make it to a second round two weeks after Sunday's ballot. Further, China's main indexes fell for their fourth straight session on Wednesday, as investor worries deepened that tighter regulations against speculation and shadow banking will hurt the country's credit-fuelled recovery. Shares from Sydney to Seoul also fell, but Japan bounced back from earlier losses as the yen weakened.  Meanwhile, European stocks edged higher in early trade, as investors assessed a stack of earnings reports a day after the market suffered its worst session in five months.

Back home, after getting a weak start, local benchmarks traded in tight range, altering between positive and negative territory, throughout the session and ended on flat note. Finally, the NSE's 50-share broadly followed index Nifty, put single digit cut to settle above the crucial 9,100 support level, while Bombay Stock Exchange's Sensitive Index or Sensex gained around seventeen points and ended above the psychological 29,300 mark. However, broader markets managed a touch better than the larger peers as the BSE's midcap and smallcap indices settled with gains of 0.66% and 0.76% respectively.

The market breadth remained pessimistic, as there were 1599 shares on the gaining side against 1233 shares on the losing side, while 175 shares remained unchanged.

Finally, the BSE Sensex gained 17.47 points or 0.06% to 29336.57, while the CNX Nifty was down by 1.65 points or 0.02% to 9,103.50. 

The BSE Sensex touched a high and a low of 29388.25 and 29241.48, respectively and there were 14 stocks on gainers side as against 16 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.66%, while Small cap index was up by 0.76%.

The top gaining sectoral indices on the BSE were Utilities up by 2.06%, Power up by 2.04%, Realty up by 1.48%, Basic Materials up by 0.67% and Industrials up by 0.66%, while Bankex down by 0.53%, IT down by 0.34%, Healthcare down by 0.22% and TECK down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 4.35%, Adani Ports & SEZ up by 1.88%, NTPC up by 1.86%, Coal India up by 1.24% and Maruti Suzuki up by 1.02%. On the flip side, SBI down by 2.05%, Dr. Reddys Lab down by 0.73%, ICICI Bank down by 0.72%, ONGC down by 0.66% and Hero MotoCorp down by 0.60% were the top losers.

Meanwhile, in order to protect the domestic industries from cheap in-bound shipments, the government is likely to impose anti-dumping duty of up to $118 per tonne on import of 'Hydrogen Peroxide' chemical used by various industries in applications like corrosion control, paper and pulp bleaching from six countries--Bangladesh, Taiwan, Korea, Indonesia, Pakistan and Thailand. 

The directorate general of anti-dumping and allied duties (DGAD) in its final findings has recommended that the chemical was dumped in India which has impacted the domestic players. It has also recommended the duty in the range of $16.91 per tonne to $117.9 per tonne. While the DGAD recommends the duty, Finance Ministry imposes the same. The investigation was initiated on joint application for initiation of anti-dumping investigations by National Peroxide and Hindustan Organic Chemicals. The import of Hydrogen Peroxide has increased to 67,300 tonne during April 2014 to June 2015 from 17,464 tonne in 2011-12.

Countries initiate anti-dumping probes to determine if the domestic industry has been hurt by a surge in below-cost imports. As a counter-measure, they impose duties under the multi-lateral WTO regime. Anti-dumping measures are taken to ensure fair trade and provide a level-playing field to the domestic industry. They are not a measure to restrict imports or cause an unjustified increase in cost of products.

The CNX Nifty traded in a range of 9,120.50 and 9,075.15. There were 26 stocks in green as against 25 stocks in red on the index.

The top gainers on Nifty were Power Grid up by 3.98%, Bharti Infratel up by 3%, Tata Power up by 2.87%, Adani Ports & SEZ up by 2.35% and Grasim Industries up by 2.35%. On the flip side, Aurobindo Pharma down by 3.75%, SBI down by 1.86%, Hero MotoCorp down by 1.43%, Tech Mahindra down by 1.04% and ICICI Bank down by 1.01% were the top losers.

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.