Post Session: Quick Review

Friday turned out to be a disappointing session of trade for the Indian equity benchmarks, where frontline gauges went home with a cut of over two tenth of a percent. Sentiments remained dampened throughout the session with key indices traded mostly in red, as traders remained on sidelines ahead of government release of a new series of Index of Industrial Production (IIP) and Wholesale Price Index (WPI) later in the day, in a bid to map economic activity more accurately. Traders also remained cautious ahead of Consumer price inflation (CPI) data to be released later in the day. CPI is expected to have eased to a three-month low of 3.49% in April from 3.81% the previous month.

However, losses remained capped as some support also came with SBI Research’s Ecowrap report, which has said that the easing of crude oil prices will have positive effect not only on inflation but also on GDP growth. It has said that average crude oil prices will be around $ 45 for the next half of this year and this, coupled with positive macro fundamentals, could translate into better growth numbers for the country. 30,200 for Sensex and 9,400 for Nifty proved to be strong support levels. Meanwhile, Chief Economic Adviser Arvind Subramanian slamming global credit rating agencies for not upgrading India despite clear improvement in its economic fundamentals has said that they are following ‘inconsistent’ standards while rating India and China.

On the global front, European markets made positive start, as investors reacted to the latest batch of corporate earnings, while oil prices extended gains on renewed optimism over potential production cuts. Asian markets exhibited mixed trend on concern about the appetite of US consumers to keep spending. The Japanese market too was in red as the yen rose against the dollar.

Back home, select metal stocks edged higher on the report that India has imposed anti-dumping duty on 47 steel products, reinforcing New Delhi’s tough stance despite complaints from some of the targeted countries. Between April 2016 and January, India’s steel imports fell 38 per cent year-on-year, data from a government body showed, primarily due to the slew of protection measures announced by the government. Stocks related to textile sector remained buzzing, as the Finance Ministry has extended by one year the validity of existing anti-dumping duty on Partially Oriented Yarn (POY) imports from China.

The NSE’s 50-share broadly followed index Nifty lost over twenty points but somehow managed to hold its psychological 8,400 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over sixty points to finish below its psychological 30,200 mark. Broader markets witnessed selling pressure and ended the session with a massive cut of over half a percent.

The market breadth remained in favor of decliners, as there were 998 shares on the gaining side against 1,783 shares on the losing side while 178 shares remain unchanged. (Provisional)

The BSE Sensex ended at 30188.15, down by 62.83 points or 0.21% after trading in a range of 30111.45 and 30299.74. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.69%, while Small cap index was down by 0.80%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.16%, Realty up by 0.81%, TECK up by 0.68%, Auto up by 0.12% and Oil & Gas up by 0.09%, while Consumer Durables down by 0.98%, Bankex down by 0.89%, Power down by 0.81%, Healthcare down by 0.66% and Utilities down by 0.61% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 2.34%, Infosys up by 2.15%, Cipla up by 1.22%, Sun Pharma up by 0.83% and Tata Motors up by 0.77%. On the flip side, Asian Paints down by 2.81%, Axis Bank down by 2.67%, ICICI Bank down by 1.27%, Adani Ports & SEZ down by 1.20% and HDFC down by 0.96% were the top losers. (Provisional)

Meanwhile, after the Real Estate (Regulation and Development) Act, 2016, (RERA), came into effect, the Central Board of Direct Taxes (CBDT) has released the draft Income Computation and Disclosure Standard (ICDS) on real estate transactions for public consultation, requesting stakeholders to submit their comments on draft by 26th May, 2017.

The proposed ICDS which is based on the guidance note issued by Institute of Chartered Acountants of India (ICAI) will be applicable from assessment year 2017-18 for specified assessees to compute income under the head ‘profits and gains of business or profession’ or ‘income from other sources’ and is also aimed at providing uniformity, certainty and harmonising the same norms with the provision of the Income Tax Act.

According to the draft, transactions will include sale of plots of land with or without development of common facilities, development & sale of residential and commercial units, transfer of development rights, re-development of existing buildings & structures and joint development agreements for any of the mentioned activities.

The ICDS will be applicable for determination of income from all forms of transactions in real estate, including land and buildings. It also proposes recognition of transferable development rights (TDR) at the fair value against fair market value or net book value. Further, the proposed ICDS does away with the ceiling for revenue recognition based on stage of completion determined with reference to the project cost incurred.

The CNX Nifty ended at 9400.90, down by 21.50 points or 0.23% after trading in a range of 9372.55 and 9437.75. There were 21 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hero MotoCorp up by 2.30%, Infosys up by 2.13%, Kotak Mahindra Bank up by 1.91%, Tech Mahindra up by 1.73% and Cipla up by 1.07%. On the flip side, Yes Bank down by 5.97%, Zee Entertainment down by 3.37%, Asian Paints down by 2.87%, Axis Bank down by 2.69% and Indiabulls Housing down by 1.44% were the top losers. (Provisional)

European markets were trading in green; France’s CAC increased 4.15 points or 0.08% to 5,387.57, Germany’s DAX added 17.22 points or 0.14% to 12,728.28 and UK’s FTSE 100 was up by 17.9 points or 0.24% to 7,404.53.

Asian equity markets made a mixed closing on Friday, after weak earnings from Macy's sent shares of American retailers plunging overnight and stoked worries about weak consumer spending in the US. Heightened political uncertainty in Washington triggered by President Donald Trump's abrupt firing of FBI chief James Comey and the improving odds of a June rate hike also kept underlying sentiment cautious. Japanese shares eased from 17-month highs as the yen rose against the dollar ahead of the G7 summit in Italy due this weekend and investors digested a slew of corporate earnings. Meanwhile, Chinese shares ended higher after China's central bank injected fresh funds through a medium-term lending facility to keep liquidity stable.