Post Session: Quick Review

Indian equity benchmarks traded on a volatile note throughout the day in a narrow range and closed in red on last day of April derivatives expiry. The equity benchmarks snapped their trade after rallying for previous three consecutive sessions with key benchmark ‘Sensex’ closing below 30000 mark. The equity benchmarks made a soft start with cut of around quarter a percent in early deals as sentiments remained dampened after Finance Minister Arun Jaitley expressed concern over the worrying signs of economic protectionism and added that continued unpredictability in ties between major powers has brought new uncertainties to the fore. Separately, investors took note that a stronger rupee can help check inflation as it will pull down commodity prices, but export-reliant companies such as IT firms and drug makers are likely to take up to 4% hit on their earnings. Exporters’ body Federation of Indian Export Organisations (FIEO) said the rupee appreciation during the last two months has negatively impacted the country’s exports and demanded immediate support from the government. A stronger rupee against the dollar erodes the margins of the exporters and reduces their competitiveness.

Buying emerged in middle of the day, taking support from the report that bank credit growth improved to 5.52 percent in the first fortnight of the financial year (FY18), after falling to a whopping six-decade low of 5.08 per cent in the previous financial year (FY17). As per the Reserve Bank of India data, credit in the banking system rose to Rs 76.31 trillion in the fortnight to April 14 from Rs 72.31 trillion in the week to April 15, 2016. Meanwhile, the Global Business & Spending Outlook survey released highlighted that driven by positive economic sentiment, Indian companies are confident about increasing spending and investment to support top line growth while improving profitability this year. The report enlightened that around 67 per cent of Indian executives are positive about moderate spending and investment and financial executives are expected to spend more than last year on labour/headcount, hardware and infrastructure and financial reporting and compliance. 

On the global front, Asian markets closed mixed, with South Korea in focus as well as comments on free trade in North America from the White House. The Bank of Japan increased its real gross domestic product (GDP) forecast for the 2017-18 fiscal year to 1.6% from 1.5%, while keeping its target yield for the benchmark 10-year Japanese government bond at around 0% and 80 trillion yen annual pace of expansion of its monetary base. European markets were trading in red as investors waited to hear from European Central Bank President Mario Draghi and digested fresh corporate earnings.

The BSE Sensex ended at 29979.27, down by 154.08 points or 0.51% after trading in a range of 29973.40 and 30184.22. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.06%, while Small cap index was up by 0.01%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 0.57%, IT up by 0.47%, Oil & Gas up by 0.41%, Industrials up by 0.33% and Capital Goods up by 0.32%, while Metal down by 0.91%, FMCG down by 0.83%, Healthcare down by 0.78%, Telecom down by 0.49% and Consumer Disc down by 0.39% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 1.22%, Infosys up by 1.20%, GAIL India up by 1.15%, Cipla up by 1.11% and Wipro up by 1.10%. (Provisional)

On the flip side, Lupin down by 2.72%, ITC down by 1.94%, Axis Bank down by 1.86%, Tata Steel down by 1.82% and HDFC down by 1.54% were the top losers. (Provisional)

Meanwhile, in order to provide a fillip to the domestic markets, the Securities and Exchange Board of India (SEBI) has approved a slew of reform measures, which include approval to options trading in commodity derivatives, unified licence for brokers, mutual fund investments through digital wallets, stricter public offer norms and enhanced safeguards to curb illicit fund flows.

The regulator has also decided to exempt scheduled banks and financial institutions from certain provisions of the regulations pertaining to preferential allotments in an effort to help them to recover dues amid growing non- performing assets (NPAs). Besides, to deepen corporate bond market, it has cleared a new framework for consolidation and reissuance of debt securities. Liquidity in the secondary market for corporate bonds will be increased by way of minimal number of ISINs (International Securities Identification Numbers). Under the framework, approved by the SEBI board during its meeting here, an issuer will be permitted a maximum of 12 ISINs maturing per financial year.

Furthermore, SEBI has tightened the norms pertaining to participatory notes (P-Notes) to check black money flow into the securities market. The markets regulator also said that major non-banking finance companies (NBFCs) will be eligible for quota reserved for qualified institutional buyers in IPO and entities coming out with public offers including initial share sales will be required to appoint a monitoring agency to keep tabs on the utilisation of the proceeds in case the offer size is more than Rs 100 crore.

The CNX Nifty ended at 9328.70, down by 23.15 points or 0.25% after trading in a range of 9322.65 and 9367.15. There were 23 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 3.58%, ACC up by 2.21%, Indian Oil Corporation up by 2.12%, Kotak Mahindra Bank up by 1.52% and Ambuja Cement up by 1.48%. (Provisional)

On the flip side, Aurobindo Pharma down by 3.06%, Lupin down by 2.57%, ITC down by 1.91%, Axis Bank down by 1.65% and HDFC down by 1.57% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 45.31 points or 0.62% to 7,243.41, Germany’s DAX decreased 31.7 points or 0.25% to 12,441.10 and France’s CAC decreased 18.24 points or 0.34% to 5,269.64.

Asian equity markets ended mixed on Thursday with Japanese market snapping four-day rally, as the Bank of Japan (BoJ) kept its policy steady while sounding more upbeat on the economy, citing a pick-up in overseas demand. Even though Trump’s proposed changes in the tax system that includes a cut in the corporate tax rate from the current 35 percent to 15 percent, the plan left investors with questions on whether the changes would increased the budget deficit. Chinese shares ended higher after official data showed profits earned by Chinese industrial firms climbed markedly in March, though at a slower pace than in the first two months of the year. Industrial profits surged an annual 23.8 percent, well below the 31.5 percent spike in the January to February period. However, it was much faster than the 8.5 percent growth in the whole year 2016.