Post Session: Quick Review

Indian equity benchmarks ended on a positive note with key indices BSE Sensex and NSE Nifty closing at an all-time high.  The trade remained lackluster in first half but buying emerged in latter half, which pulled the markets to close higher. The equity benchmarks made a soft start in early deals as traders took support from Indian Meteorological Department’s (IMD) statement that the southwest monsoon will hit Kerala on May 30, two days ahead of schedule. Normally, the monsoon season begins on June 1. The onset of southwest monsoon over Kerala signals the arrival of monsoon over the Indian subcontinent. A foreign brokerage report highlighted that the Indian economy is entering a ‘productive growth phase’ and real GDP growth is likely to rise to 7.9% by December driven by favourable external demand, improving corporate balance sheets and private capex recovery. The research note enlightened that growth is likely to inflect higher, accelerating by almost 1% point over the next three quarters. It expects growth to pick up from the second quarter of this year onwards and accelerate by almost a full percentage point to 7.9% by December 2017 from the current run rate of 7%.

However, the United Nations revised downward India's economic growth forecast for 2017 but predicted an increased 7.9% GDP growth next year. The revised report projected that India will achieve an impressive 7.9% GDP growth in 2018, revising upwards its January estimates when it had said India’s growth will be 7.6% next year. The report, on the other hand, warned that stressed balance sheets in the country’s banking sector, which has emerged as a cause of concern for the Narendra Modi government, will have an adverse effect on investment rebound in the country. Meanwhile, the government said that the number of persons under the tax net has increased by 91 lakh in 2016-17 and attributed this ‘higher-than-usual’ rise to demonetization and the subsequent crackdown on tax evaders. This, along with undisclosed income of Rs 23,144 crore detected via search and survey actions and a surge in e-filing of tax returns, showed how the note ban was very effective in nailing down tax evaders, it claimed.

On the global front, Asian markets closed in red, on the continued chaotic US political situation which weighed on expectations for economic policies favoring tax cuts and higher spending. Japanese stocks closed in red after the dollar eased against the yen on weak US economic data, while financials stocks underperformed, hit by lower US yields. European markets were trading in red as mounting concerns over fresh US political events continued to weigh heavily on market sentiment. Market sentiment weakened following reports US President Donald Trump shared sensitive intelligence with Russia’s foreign minister in a meeting last week.

Back home, Tata Group stocks - Tata Motors, Tata Motors DVR, Tata Power and Tata Steel closed in green after Tata Group topped the list of India’s 100 most valuable brands once again, according to Brand Finance, a global brand valuation and strategy consultancy firm that released its 2017 report on Wednesday.

The BSE Sensex ended at 30642.54, up by 59.94 points or 0.20% after trading in a range of 30519.14 and 30692.45. There were 19 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.06%, while Small cap index was lower by 0.27%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.20%, Telecom up by 0.64%, Basic Materials up by 0.55%, Auto up by 0.52% and Industrials up by 0.23%, while Consumer Durables down by 0.77%, Oil & Gas down by 0.35%, Energy down by 0.32%, PSU down by 0.28% and IT down by 0.27% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 7.71%, Tata Motors up by 2.72%, ICICI Bank up by 2.26%, Asian Paints up by 0.90% and Hindustan Unilever up by 0.89%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 1.64%, Wipro down by 1.26%, HDFC down by 0.89%, Cipla down by 0.69% and ITC down by 0.55% were the top losers. (Provisional)

Meanwhile, improving further in this year’s ‘Renewable energy country attractiveness index’ (RECAI), India has overtaken the US to be at second place with China on top. According to the Ernst & Young’s (EY) RECAI, government’s strong support coupled with increasingly attractive economics helped the county to move up to second spot from third position which it held for the last two years.

The report has said that government’s program to build 175 GW in renewable energy generation by 2022 and to have renewable energy account for 40 per cent of installed capacity by the end of 2040, have contributed most to the upward trend, noting that the country has also added more than 10GW of solar capacity in the last three years - starting from a low base of 2.6 GW in 2014.

The report also suggested that the government needs to increase compliance with the Renewable Purchase Obligation (RPO) as well as ensure that country's distribution companies, many of which are financially distressed, have the capacity to continue to purchase renewable electricity, especially if bid prices level off or rise and the government could ease rules around tapping foreign debt to make capital available. Besides, it said that the government's additional emphasis on photo voltaic (PV) parks will help to plug the gap, but it needs to do more to encourage rooftop solar installations.

The CNX Nifty ended at 9522.65, up by 10.40 points or 0.11% after trading in a range of 9486.10 and 9532.60. There were 26 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Steel up by 8.01%, Bharti Infratel up by 3.37%, Indiabulls Housing up by 2.72%, Tata Motors up by 2.60% and ICICI Bank up by 2.35%. (Provisional)

On the flip side, Tech Mahindra down by 2.84%, Bosch down by 2.09%, ACC down by 2.00%, Yes Bank down by 1.94% and Adani Ports & Special Economic Zone down by 1.57% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 2.08 points or 0.03% to 7,519.95, Germany’s DAX decreased 52.55 points or 0.41% to 12,751.98, while France’s CAC decreased 31.15 points or 0.58% to 5,374.95.

Asian equity markets ended in red on Wednesday as oil prices fell on data showing rising US crude inventories and safe-haven assets such as the yen and gold inched higher on renewed worries about political situation in the US. The US political turmoil intensified after it emerged that President Donald Trump has tried to quash a Federal Bureau of Investigation probe against his former National Security Advisor James Flynn. Also, Trump took to Twitter to defend his sharing of what is reportedly highly classified information with Russia during an Oval Office meeting last week, saying he had the ‘absolute right’ as president to give 'facts pertaining to terrorism and airline flight safety' in the fight against ISIS and terrorism. Japanese shares ended lower as the dollar eased against the yen on weak US economic data, while financial stocks underperformed hit by lower US yields. Domestic economic reports also painted a mixed picture of the economy, with core machinery orders falling short of expectations in March, while industrial output declined less than initially estimated in the month. Further, Chinese shares snapped a four-day winning streak as concerns over regulatory crackdown lingered.