Post Session: Quick Review

Indian equity benchmarks ended the lackluster day of trade with marginal loss on Wednesday ahead of the US Federal Reserve’s policy outcome. Traders also remained concerned with Fitch Ratings maintaining the ‘BBB-’ sovereign rating - the lowest investment grade -on India, due to weak fiscal position and difficult business environment. It said that India is not immune to external shocks, but the country’s strong external finances make it less vulnerable than many of its peers, but weak public finances continue to constrain India’s ratings. Sentiments also remained down-beat with a United Nations (UN) report stating that India is expected to clock 7.1 percent growth this year before edging up to 7.5 percent in 2018. UN report warned that the country faces heightened risks related to the concentration of bad loans in the public sector banks.

However, losses remained capped with Prime Minister Narendra Modi reviewing the progress of the government’s agenda to curb black-money and tax evasion as well as the roll out of the Goods and Services Tax (GST). Also, Finance Minister Arun Jaitley has said the whole debate over the political cost of economic reforms has dissipated with the benefits reaching the deprived sections of society.

On the global front, European markets were trading in red in early deals, as investors digested the latest in Brexit negotiations and corporate earnings. Asian markets ended mixed on Wednesday, as investors remained cautious ahead of the outcome of the two-day US Federal Open Market Committee (FOMC) meet, due later in the day. The Fed is widely expected to stand pat on interest rates, but may offer hints on the possibility of a rate hike in June. Hong Kong and South Korea are closed for the Buddha’s birthday and Japan is shut for the rest of the week for the Golden Week holiday.

Back home, appreciation in Indian rupee against the US dollar helped Indian markets to cap the downside. The Indian rupee was trading at 64.15 at the time of equity markets due to sustained selling of the American currency by exporters. In stock specific development United Breweries and United Breweries Holdings edged higher, on reports of a buyout proposal of promoter Vijay Mallya’s stake in United Breweries by Dutch beer maker Heineken International BV. Real estate Company Godrej Properties rose by over seven per cent after it said it sold 1,000 apartments in Mumbai, Pune and Noida across three new projects since March 2017.

The NSE’s 50-share broadly followed index Nifty slipped marginally and hold its psychological 9,300 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around thirty points to finish below its psychological 29,900 mark. However, broader markets ended mixed.

The market breadth remained in favor of decliners, as there were 1,359 shares on the gaining side against 1,486 shares on the losing side while 161 shares remain unchanged. (Provisional)

The BSE Sensex ended at 29894.80, down by 26.38 points or 0.09% after trading in a range of 29846.57 and 30020.59. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index declined 0.30%, while Small cap index was up by 0.07%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.54%, IT up by 1.40%, TECK up by 0.94%, Basic Materials up by 0.37% and Power was up by 0.29%, while Healthcare down by 0.98%, Oil & Gas down by 0.67%, Consumer Durables down by 0.50%, Capital Goods down by 0.49% and Industrials was down by 0.44% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Power Grid up by 2.58%, TCS up by 1.98%, Infosys up by 1.59%, Coal India up by 1.49% and Hero MotoCorp up by 0.54%. On the flip side, Lupin down by 3.09%, HDFC down by 1.37%, ICICI Bank down by 1.16%, Tata Motors down by 1.11% and Maruti Suzuki down by 1.11% were the top losers. (Provisional)

Meanwhile, projecting India’s growth to remain stable at 7.1 per cent in 2017 before edging up to 7.5 per cent in 2018, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), in its latest report has said that the country is facing a key downside risk related to the concentration of bad loans in public sector banks (PSUs) and noted the need of bank recapitalization in a view of high gross non-performing assets ratio in PSUs which had reached to almost 12 per cent in 2016.

However the report expects growth in GDP due to higher private & public consumption and increased infrastructure spending, it has stated that if the US policies take a very severe protectionist turn and the trend spreads, the India’s growth could be affected by as much as 1.2 per cent in the coming years. It added that while the impact of demonetization on the economy is expected to be transient, a slower-than-expected recovery would particularly diminish the outlook for cash-intensive sectors and supply chains for agricultural products.  The report has also projected inflation rate at 5.3-5.5 per cent in 2017 and 2018, which are above the official target of 4.5-5 per cent.

The report also said that the unexpected withdrawal of the two largest denomination currency notes in November 2016 helped to expand banking sector liquidity and added that the recent reforms such as introduction of the Goods and Services Tax (GST), amendment of the bankruptcy law and opening up of the pharmaceuticals, defence and civil aviation sectors will boost the Country’s growth in the medium-term.

The CNX Nifty ended at 9311.95, down by 1.85 points or 0.02% after trading in a range of 9298.40 and 9346.30. There were 25 stocks advancing against 25 stocks declining on the index, while one stock remained unchanged. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 2.48%, Power Grid Corporation up by 2.45%, Ultratech Cement up by 2.27%, TCS up by 2.07% and Coal India up by 1.82%. On the flip side, Lupin down by 2.98%, Aurobindo Pharma down by 2.04%, Tata Power down by 1.79%, Hindalco down by 1.60% and Zee Entertainment down by 1.31% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 21.21 points or 0.17% to 12,486.69, UK’s FTSE 100 slipped 18.88 points or 0.26% to 7,231.17 and France’s CAC was down by 16.42 points or 0.31% to 5,287.73.

Asian equity markets ended mixed on Wednesday as Apple posted a surprise fall in iPhone sales in the second quarter and investors waited for cues from the Federal Reserve meeting. The US central bank is expected to hold rates steady amid signs of softening inflation, but its commentary will be scrutinized for new clues as to the Fed's views on the economy and interest rates. French politics also remained in focus ahead of the May 7 vote in the country to elect the new president. Moody's Investors Service said the escalation of tensions between the North Korean regime and the new US administration broadens the nature of geopolitical risk for South Korea, which is the most salient event risk for the sovereign and a constraint on the rating. Chinese shares ended lower, with investors turning cautious on lingering worries about the country's tougher regulations and a shift toward tighter policy. Markets in Hong Kong and South Korea were closed for the Buddha's birthday, while Japanese financial markets remain closed for the rest of the week for the Golden Week holiday.