Post Session: Quick Review

Indian equity benchmarks traded in green throughout the day and ended the session with modest gains. The equity benchmarks made a gap-up opening in early deals as investors’ sentiments got a boost after the government last week finalized rates for the upcoming goods and services tax. There will be four rates for services at 5, 12, 18 and 28 percent, similar to tax slabs for goods. Traders took support from Revenue Secretary Hasmukh Adhia’s statement that inflation will fall by 2 percent on an implementation of the goods and services tax (GST) and will create buoyancy in the economy. He said, the rates have been so fixed that incidence of taxation has come down in many and remained at the same level as now in most of the remaining goods and services. Adhia made the point that rates of many items have reduced while some have been put on the exemption list. According to an ASSOCHAM report, the GST will feature on the top of the government’s list of achievements in the last three years that also saw some other credible measures on taxation and financial inclusion fronts. The industry body perceives financial inclusion, digitization and public investment on infrastructure like railways and power distribution among the many credible steps for structural changes in the economy.

Some support also came with report stating that overseas investors have pumped in more than $2 billion so far in the country’s capital market this month, helped by stable outlook for the rupee. According to latest depository data, Foreign Portfolio Investors (FPIs) invested a net Rs 4,157 crore in equities during May 2-19, while they poured Rs 12,941 crore in the debt markets during the period under review, translating into a net inflow of Rs 17,099 crore ($2.66 billion).Separately, a joint survey carried out by the Confederation of Indian Industries (CII) and Indian Bank’s Association (IBA), highlighted that the country’s economy is set to witness improvement in the overall conditions during the first quarter (Q1) of the current financial year due to improvement in the funding liquidity index, economic activity index and external financial linkages index.

On the global front, Asian markets closed mostly in green, despite a weekend missile test by North Korea that raised further concerns on its ability to deliver a nuclear warhead as far as the US states of Hawaii and Alaska. Japan’s exports rose in April to mark their fifth straight month of gains, as shipments of semiconductors and steel expanded, signaling that more robust overseas demand could underpin a steady economic recovery. European shares were trading mostly in red as investors awaited developments at a Euro group meeting on Greece later in the day, but Britain’s FTSE index re-approached last week’s record highs.

Back home, shares of aviation majors InterGlobe Aviation, SpiceJet and Jet Airways closed in red after crude oil prices rose on reports that an OPEC-led supply cut may not only be extended into next year but might also be deepened to tighten the market and prop up prices.

The BSE Sensex ended at 30566.56, up by 101.64 points or 0.33% after trading in a range of 30516.87 and 30712.15. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.25%, while Small cap index was down by 1.18%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 3.13%, Consumer Durables up by 0.59%, Capital Goods up by 0.50%, IT up by 0.41% and TECK up by 0.35%, while PSU down by 2.13%, Healthcare down by 1.75%, Basic Materials down by 1.47%, Utilities down by 1.45% and Power down by 1.34% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 6.14%, Larsen & Toubro up by 1.62%, Adani Ports & Special Economic Zone up by 1.37%, HDFC Bank up by 1.24% and Hindustan Unilever up by 1.21%. (Provisional)

On the flip side, SBI down by 4.46%, Lupin down by 4.27%, GAIL India down by 2.75%, Bajaj Auto down by 2.20% and Mahindra & Mahindra down by 2.01% were the top losers. (Provisional)

Meanwhile, aided by government’s various initiatives to improve ease of doing business, Foreign Direct Investment (FDI) flow into India increased 8 percent in fiscal year 2016-17 to touch a new high. According to the statistics released by Ministry of Commerce and Industry, FDI increased to $60.08 billion in fiscal year 2016-17 from previous high of $55.6 billion in fiscal year 2015-16.

The Commerce and Industry Ministry has said that during the last three years, the government eased foreign investment norms in 21 sectors covering 87 areas. It also said that the country has now become the topmost attractive destination for foreign investment, noting that the FDI flows increased by 62 percent to $99.72 billion as compared to $61.41 billion during the previous 30 months (April 2012 to September 2014), on the back of ‘Make In India’ initiative.

FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been relaxing the foreign investment norms in various sectors. At present, the government is mulling easing FDI policy on construction, print media and retail sectors. Meanwhile, India needs around $1 trillion to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

The CNX Nifty ended at 9439.30, up by 11.40 points or 0.12% after trading in a range of 9427.90 and 9498.65. There were 18 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were ITC up by 6.27%, Bharti Infratel up by 2.51%, Zee Entertainment up by 1.67%, Larsen & Toubro up by 1.60% and HCL Tech up by 1.46%.  (Provisional)

On the flip side, SBI down by 4.43%, Lupin down by 4.43%, Aurobindo Pharma down by 3.45%, Bank of Baroda down by 3.18% and Ambuja Cement down by 3.16% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 41.23 points or 0.33% to 12,597.46, France’s CAC decreased 1.02 points or 0.02% to 5,323.38, while UK’s FTSE 100 increased 25.5 points or 0.34% to 7,496.21.

Asian equity markets ended mostly in green on Monday as the Japanese yen weakened and US crude futures climbed back above $50 per barrel on expectations that major oil producing nations might extend their production cuts beyond an agreed-on June deadline when they meet on May 25. Investors shrugged off news that North Korea fired another ballistic missile on Sunday. Japanese shares ended higher in thin trading after official data showed the country's exports expanded for a fifth consecutive month in April, aided by higher shipments of semiconductors and steel. However, Chinese shares ended lower as worries over slowing economic growth and tighter regulations continued to haunt investors.