Post Session: Quick Review

Indian equity benchmarks managed to keep their head above water and ended Tuesday’s trade marginally in green. Sentiments remained upbeat with traders taking encouragement from IMF’s statement that India’ growth is expected to rebound to 7.2 per cent in the 2017-18 fiscal and 7.7 per cent in 2018-19 after disruptions caused by demonetisation, the IMF said this while recommending the removal of long-standing structural bottlenecks to enhance market efficiency. Some support also came after Revenue Secretary Hasmukh Adhia said he is hopeful of a smooth transition to the GST regime and says it will help domestic firms to become more competitive apart from streamlining the taxation for all business activities. Meanwhile, Finance Minister Arun Jaitley said that the quarterly filing of returns under the Goods and Services Tax (GST) was not workable for taxpayers above Rs 50 lakh turnover. Only small taxpayers, whose turnover is below Rs 50 lakh per annum under the composition scheme, can avail of filing quarterly returns. But these will not be able to avail of input tax credit.

However, gains remained capped as traders turned cautious after agriculture minister Radha Mohan Singh asked chief ministers of all states and union territories to review their preparedness to mitigate possible drought in the event of a rain deficit in the upcoming monsoon season. The June-September monsoon rainfall this year is expected to be 96% of the long-term average, with a 5% error margin, as per the weather office’s forecast issued earlier this month. Depreciation in Indian rupee against US dollar too dampened sentiments. The rupee was trading at 64.63 a dollar, down by 33 paise from its Monday’s close of 64.30.

On the global front, European markets made a firm start on Tuesday, supported by an upbeat session on Wall Street and stabilization in commodity prices. However, Asian markets ended mixed, any catalysts to spur further gains and some of them have slipped from a two year high.

Back home, markets regulator SEBI has allowed investors to buy mutual fund schemes for up to Rs 50,000 through digital wallets, making it easier for them -- especially the young generation -- to purchase these instruments. On the sectoral front, banking counter edged lower as traders booked profit after rising as much as 1.59 per cent in the previous session. Banks gained on Monday after India tweaked its laws last week to help tackle a record $150 billion in bad loans, a move aimed at pushing reluctant lenders towards write-downs and errant borrowers into insolvency. Furthermore, new listing S Chand and Company gained around a percent on debut.

The NSE’s 50-share broadly followed index Nifty gained marginally and hold its psychological 9,300 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by around ten points to finish above its psychological 29,900 mark. Broader markets ended the session with a gain of around half a percent.

The market breadth remained in favor of advances, as there were 1,477 shares on the gaining side against 1,355 shares on the losing side while 166 shares remain unchanged. (Provisional)

The BSE Sensex ended at 29933.25, up by 7.10 points or 0.02% after trading in a range of 29911.44 and 30017.82. There were 13 stocks advancing against 16 stocks declining on the index, while one stock remained unchanged. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.19%, while Small cap index was up by 0.53%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 1.90%, Industrials up by 1.27%, Power up by 0.99%, Metal up by 0.76% and Oil & Gas was up by 0.76%, while Telecom down by 0.76%, Consumer Durables down by 0.63%, Bankex down by 0.19%, Consumer Disc down by 0.14% and Healthcare down by 0.11% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 1.84%, Adani Ports up by 1.37%, Wipro up by 1.27%, Axis Bank up by 1.25% and Reliance Industries up by 0.75%. On the flip side, Hero MotoCorp down by 2.97%, Lupin down by 2.07%, Bharti Airtel down by 1.75%, Power Grid Corporation down by 0.93% and Dr. Reddy’s Lab down by 0.90% were the top losers. (Provisional)

Meanwhile, expressing his hopes for resolution of rising bad loans problem with the newly promulgated ordinance in banking system, Finance Minister Arun Jaitley has said that the government is open to discuss proposal to provide more funds to the banks for recapitalization, mentioning that once the health of the lenders improves, it will dilute its stake in state-run banks to 52 per cent and that money will be used to inject capital in them.

Reiterating that the problem of bad loans is limited to a certain set of accounts which are not very large in number, Finance Minister has said that they are impacting the balance sheet because of huge quantum and further added that the government is trying over the last few years to address this problem and in view of this, it has recently empowered the central bank to take certain precipitative action in relation to resolving the issue of stressed asset itself by promulgation of the Banking Regulation (Amendment) Ordinance, 2017.

The government has allocated Rs.10,000 crore of capital infusion in public sector banks (PSBs) in 2017-18, which is lower than Rs 25,000 crore set aside in the previous budget and the state-run banks will have to raise about Rs 80,000 crore of equity capital over the next two years to comply with the Basel III norms and support credit growth.

The CNX Nifty ended at 9316.85, up by 2.80 points or 0.03% after trading in a range of 9307.70 and 9338.95. There were 26 stocks advancing against 24 stocks declining, while one stock remained unchanged. (Provisional)

The top gainers on Nifty were Indian Oil Corporation up by 2.86%, Adani Ports up by 2.06%, Larsen & Toubro up by 2.05%, Axis Bank up by 1.37% and Wipro up by 1.31%. On the flip side, Hero MotoCorp down by 3.50%, Indiabulls Housing down by 3.04%, Lupin down by 2.32%, Bharti Airtel down by 1.72% and Aurobindo Pharma down by 1.70% were the top losers. (Provisional)

European markets were trading in green; France’s CAC increased 23.22 points or 0.43% to 5,406.17, UK’s FTSE 100 jumped 36.96 points or 0.51% to 7,337.82 and Germany’s DAX was up by 64.44 points or 0.51% to 12,758.99.

Asian equity markets made a mixed closing on Tuesday as the French election euphoria faded and a lack of fresh catalysts kept investors on the sidelines. Chinese shares ended flat in thin trading as concerns over tougher financial regulations lingered. The People's Bank of China refrained from injecting cash into markets via open market operations for the third day running, adding to concerns over policy tightening. Japanese stocks ended down as the market ran out of steam after rallying to a 17-month high on Monday, though it was supported by the yen languishing at a near two-month low against the dollar. Meanwhile, financial markets in South Korea were closed amid the much-anticipated presidential election, with Moon Jae-in, a liberal candidate of the Democratic Party, appearing to be the front-runner.