Indian benchmarks pare all gains to end lower ahead of May series F&O expiry

Indian benchmark indices ended the session on a negative note, dragged by fall in midcaps as well as escalating cross border tensions. Pakistani fighter jets flew near the Siachen Glacier today, according to a media report, but Indian Air Force sources said there was no violation of India's air space. Also, Pakistan's Air Force chief warned that his forces will respond to any aggression by the enemy in a manner that their future generations will also remember it. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted in to the negative territory as investors turned cautious ahead of the F&O expiry of May series due tomorrow. Market participants also awaited the minutes of US Federal Reserve's May policy meeting due later in the day for clues about its next interest rate hike.

Sentiments remained dismal on the report that weak investment activity, as reflected in the slow output growth in capital goods and infrastructure, is likely to depress Indian gross value added (GVA) growth to around 6.6 per cent in the fourth quarter ended March.  The report also indicated that the transition to Goods and Services Tax (GST) is also likely to create some disruption and impact the short-term sales volume across businesses. However, losses remained capped with Prime Minister Narendra Modi's statement that our aim is that India must be an engine of growth as well as an example in climate friendly development in the years to come.

On the global front, Asian markets ended mostly lower on Wednesday after the Trump administration unveiled its first budget proposal as a 'taxpayer first' plan that makes deep cuts to a number of programs while rising spending on border security and defense. Japanese shares rose notably to hit a one-week high, as weaker yen against dollar lifts mood. The dollar held firm, having rebounded from 6-1/2-month lows against its major peers thanks to a rise in U.S. Treasury yields, with investor focus now turning towards the Federal Reserve's monetary policy stance. Further, Chinese shares rose in the final minutes of trading, erasing losses spurred by Moody's cut its sovereign credit rating on China. Meanwhile, European Markets were ricocheting between positive and negative territory in early trade, as weakness in mining and autos sectors were offset by strength in oil producers. Investors remained cautious after British Prime Minister Theresa May said the UK has raised the threat level to maximum and the government was preparing to send soldiers on to streets as a second terror attack may be imminent after the Manchester pop concert bombing.

Back home, after getting a positive start, the local benchmarks showed some strength in morning trades, but the sentiments turned pessimistic in afternoon trades and index start drifting lower. Finally, the NSE's 50-share broadly followed index Nifty, suffered a moderate cut of quarter percent to settle below the crucial 9,400 support level, while Bombay Stock Exchange's Sensitive Index-Sensex- slipped around sixty-three points and closed just above the psychological 30,300 mark. On the BSE sectoral space, Capital Goods index remained the top laggard in the space and settled with over two and half percent laceration followed by the Telecom, Metal and Healthcare pockets, which went home with around two percent cuts. However, the high beta Oil & Gas along with Auto counters remained the only gainers in the space.

The market breadth remained in favor of decliners, as there were 685 shares on the gaining side against 2037 shares on the losing side while 147 shares remain unchanged.

Finally, the BSE Sensex lost 63.61points or 0.21% to 30301.64, while the CNX Nifty was down by 25.60 points or 0.27% to 9,360.55. 

The BSE Sensex touched a high and a low of 30534.15 and 30247.60, respectively and there were 8 stocks on gaining side as against 22 stocks on the losing side.

The broader indices ended in red; the BSE Mid cap index declined 1.43%, while Small cap index was down by 1.44%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.50% and Auto up by 0.06%, while Capital Goods down by 2.62%, Telecom down by 2.32%, Metal down by 2.23%, Healthcare down by 1.94% and Realty down by 1.87% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 4.30%, GAIL India up by 2.56%, Adani Ports & SEZ up by 2.41%, Hindustan Unilever up by 1.76% and TCS up by 1.48%. On the flip side, Larsen & Toubro down by 3.22%, Cipla down by 2.40%, Dr. Reddy’s Lab down by 2.24%, Coal India down by 2.20% and SBI down by 2.08% were the top losers.

Meanwhile, expressing happiness over improving economic condition of the country, Prime Minister Narendra Modi has said that India has improved upon all the macro-economic indicators over the last three years mainly due to universal banking & universal biometric identification and noted that the fiscal deficit, balance of payments deficit and inflation in the country has reduced, while GDP growth rate, foreign exchange reserves and public capital investments have increased.

Modi said the government has remained focused on many challenges such as uplifting farmers & poor, empowering women, ensuring rural communities have access to finance, building infrastructure within financial constraints and maintaining macro-economic stability so that inflation is contained. He noted that two crucial factors behind India`s growth story were universal banking and universal biometric identification. First the government launched Jan Dhan Yojana under which over 280 million bank accounts have been opened for the poor in rural and urban areas and now virtually every Indian family has a bank account. The second crucial element was the universal biometric identification system called Aadhar, which prevents claiming of benefits by those who are not eligible.

Prime Minister while inaugurating the 52nd annual meeting of the African Development Bank said that India had taken huge strides in development and could share with Africa some of the strategies used by his government over the last three years, as most of the challenges facing both India and Africa were the same. Besides, he said that India has had strong ties with Africa for centuries, adding that now Africa will be a top priority for India’s foreign and economic policy.

The CNX Nifty traded in a range of 9,431.90 and 9,341.65. There were 14 stocks in green as against 37 stocks in red on the index.

The top gainers on Nifty were Tata Motors up by 4.44%, Tata Motors- DVR up by 4.30%, GAIL India up by 3.06%, Adani Ports & SEZ up by 3.06% and BPCL up by 2.45%. On the flip side, Bank of Baroda down by 3.38%, Bharti Infratel down by 3%, Larsen & Toubro down by 2.95%, Aurobindo Pharma down by 2.76% and Hindalco down by 2.66% were the top losers.

The European markets were trading mostly in red; Germany’s DAX decreased 19.23 points or 0.15% to 12,639.92, France’s CAC decreased 3.35 points or 0.06% to 5,344.81, while UK’s FTSE 100 increased 16.42 points or 0.22% to 7,501.71.

Asian equity markets ended mostly in green on Wednesday after the Trump administration unveiled its first budget proposal as a ‘taxpayer first’ plan that makes deep cuts to a number of programs while rising spending on border security and defense. A surge in US Treasury yields helped the dollar rebound from 6-1/2-month lows against its major peers, while oil prices rose for a fifth straight session ahead of OPEC's key meeting Thursday. The world's major oil countries are likely to extend production cuts for another nine months after Iraq backed an extension. Meanwhile, the FOMC minutes for the May 2-3 FOMC meeting are due later in the day, with investors looking for signs whether the Fed will lift rates in June. Chinese shares rose in the final minutes of trading, erasing losses spurred by Moody’s Investors Service cutting China’s debt rating and negative comments from MSCI Inc. on the nation’s stock market. Further, Japanese shares rose notably to hit a one-week high as the yen's fall against the dollar lifted export-oriented shares and banking stocks also benefited from a rise in US Treasury yields.