Post Session: Quick Review

Indian equity benchmarks snapped their winning streak ending in red as concerns about President Donald Trump’s FBI controversy weighed on global sentiments. The selling intensified on last hour of trade which dragged the key benchmark indices BSE Sensex and NSE Nifty below 30500 mark and 9450 mark respectively. The selling pressure was visible across the sectors barring IT and TECK shares which witnessed buying interest in otherwise weak market. The equity benchmarks made a soft start in early deals tracking feeble global cues. Traders even overlooked Commerce and Industry Minister Nirmala Sitharaman’s statement that India’s exports have been increasing despite global headwinds and efforts are being made to neutralize any impact on them due to implementation of GST. She added that the government will come out with amendments to the foreign trade policy to align it with the Goods and Services Tax (GST), which is scheduled to be rolled out from July 1.

Banking sector was reeling under pressure after domestic rating agency India Ratings and Research report highlighted that the banking system has Rs 7.7 trillion of unrecognized stressed loans in corporate and SME sector and around 35 per cent of that could slip into the NPA category in the next 12-18 months. It pegged stressed corporate and SME debt at 22 per cent of total bank credit. Select pharma companies were under pressure as the drug price regulator NPPA has initiated action against various firms, including Abbott Healthcare, Zydus Cadila and Dr Reddy’s, for non-compliance with provisions for new drugs under the price control regime. In a notification issued, the National Pharmaceutical Pricing Authority (NPPA) said that various companies have launched formulations by altering a scheduled formulation with strength dosage other than as specified in the Drugs Price Control Order (DPCO) 2013.

Meanwhile, the Goods and Services Tax (GST) Council approved all nine rules for the rollout of the new indirect tax regime. The nine rules finalized by the council pertain to composition, valuation, transition, input tax credit, invoice, payment, refund, registration and return. The council has begun discussion on the list of items that will attract 0 per cent GST. The council, chaired by Finance Minister Arun Jaitley, comprises states’ finance ministers. In its two-day meeting, the council is expected to finalize the GST rules and discuss fitment of rates, with less than 50 days to go for the rollout.

On the global front, Asian markets closed mostly in red, as uncertainty mounted over US President Donald Trump’s future following reports that he tried to interfere with a federal investigation. Indonesia stocks closed in green as gains in the Miscellaneous Industry, Mining and Financials sectors led shares higher. The home prices in China rose by 0.7% in April, barely faster than the 0.6% increase in March, following tougher curbs aimed at driving speculators out of what had been a red hot market. European stocks were trading lower to two-week lows on US political turmoil

The BSE Sensex ended at 30422.43, down by 236.34 points or 0.77% after trading in a range of 30409.28 and 30575.83. There were 6 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 2.21%, while Small cap index was down by 2.14%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.00% and TECK up by 0.45%, while Realty down by 3.39%, Metal down by 2.83%, Basic Materials down by 2.64%, Power down by 2.31% and Auto down by 2.18% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Wipro up by 3.35%, TCS up by 3.09%, Infosys up by 0.77%, Sun Pharma up by 0.68% and Lupin up by 0.23%. (Provisional)

On the flip side, Tata Motors down by 2.94%, Mahindra & Mahindra down by 2.16%, Bajaj Auto down by 2.03%, Hindustan Unilever down by 1.97% and Reliance Industries down by 1.95% were the top losers. (Provisional)

Meanwhile, amid rising worries over job losses due to the ongoing H-1B visa troubles, industry body, the Associated Chambers of Commerce of India (Assocham) has said that the Indian IT and BPM industry should shift their focus on domestic opportunities, noting that this is time to redraw strategy that gives a good look at the home market, which can more than make up at least in the short to medium term, for the possible dent on jobs in the disruptive overseas markets.

Assocham’s secretary general DS Rawat claimed 'lakhs of new jobs' can be created through the focus on domestic opportunity which can make up for the losses due to upheavals in global markets and changing technologies. The industry body has said government's financial inclusion programmes like Prime Minister Jan Dhan Yojana (PMJDY) and Aadhar based service delivery models offer interesting job opportunities in the country itself and added that an increased focus on the domestic front will be a win-win move for both the country as well as the IT industry. Besides, it has said that data generated by PMJDY and its linkages with Direct Benefit Transfer (DBT) can be a delight for different set of analytics and can be used to help the fast moving consumer goods, auto, telecom, insurance, agriculture sectors.

As per Assocham, the Indian IT-BPM industry employs about four million young workforce in the country in over 16,000 companies and 60 per cent of the current work done by the Indian IT industry is for global companies in the banking, financial services and insurance sector.  It has cited factors like huge Internet base (400 million) and said that increasing adoption of digital payments that will further fuel the growth of technology uptake in the country.

The CNX Nifty ended at 9423.75, down by 102.00 points or 1.07% after trading in a range of 9418.10 and 9489.10. There were 6 stocks advancing against 45 stocks declining on the index. (Provisional)

The top gainers on Nifty were TCS up by 3.04%, Wipro up by 2.88%, Infosys up by 0.79%, Sun Pharma up by 0.63% and Lupin up by 0.59%. (Provisional)

On the flip side, Yes Bank down by 3.95%, Grasim Industries down by 3.74%, Bosch down by 3.68%, Ultratech Cement down by 3.01% and Bank of Baroda down by 3.00% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 100.56 points or 1.34% to 7,402.91, Germany’s DAX decreased 108.98 points or 0.86% to 12,522.63 and France’s CAC decreased 59.01 points or 1.11% to 5,258.88.

Asian equity markets ended mostly in red on Thursday as US political turmoil continued to keep investors nervous. Besieged from all sides, the Trump administration appointed former FBI Director Robert Mueller as a special counsel to oversee the federal investigation into Russia's involvement in the US presidential election last year. That followed a report from The New York Times that former FBI Director James Comey had composed a memorandum recording the President's request to drop an investigation of Michael Flynn, the former national security adviser. Chinese shares ended lower as data showed home price growth in China's biggest cities softened in April due to stricter restrictions on property purchases. Further, Japanese shares hit 2-1/2-week lows as the yen's recent strength on fading expectations for continuous Fed rate-hike actions through 2017 and the allegations surrounding Trump's Russian ties overshadowed strong GDP data.