Post Session: Quick Review

Indian equity benchmarks altered between positive and negative territory and ended the session modestly in green. The sustained buying by domestic institutional investors and retailers helped Nifty to close above 9600 mark for the first time. Investors kept a close tab on the arrival of monsoon rains which is expected to hit the southern Kerala coast by the end of the month. Investors will also be keeping an eye on Q4 GDP data that is scheduled to be announced on May, 31. Growth had slowed to 7% in Q3 after growing 7.4% in Q2. Manufacturing PMI data for the month of May will be announced on June, 01. The equity benchmarks made a cautious start and traded with marginal gains in early deals as traders took support with Union Minister Bandaru Dattatreya’s statement that retirement fund body EPFO will invest Rs 20,000 crore in exchange traded funds this fiscal as it has decided to raise the investment limit in ETFs. The Employees Provident Fund Organization (EPFO) Central Board of Trustees meeting agreed on the proposal for raising ETF investments from 10% to 15% of investible deposits.

Some support also came after a private poll of economist highlighted that India remained the fastest growing major economy in the world last quarter, with growth buoyed by an improved performance in manufacturing and services. The median forecast from a poll showed the economy grew 7.1 per cent annually in the first three months of this year. Annual growth was 7.0 per cent in the quarter ending December, and 7.9 per cent in the January-March quarter last year. Foreign investors have pumped in nearly $4 billion in the country’s capital market so far this month due to finalization of GST rates for bulk of the items and stable outlook for the rupee. According to latest depository data, FPIs invested a net Rs 9,007 crore in equities during May 2-26, while they poured Rs 15,769 crore in the debt markets during the period under review, translating into a net inflow of Rs 24,776 crore ($3.85 billion).

On the global front, Asian markets closed mostly in red, amid reports that North Korea launched a ballistic missile test, its third such test in little over three weeks. The Bank of Japan saw interest payments on its huge government bond holdings decline for the first time in five years in the fiscal year that ended in March, a sign that its ultra-loose monetary policy was taking a toll on its financial health. European equities traded mixed as concerns over Italy’s banks and Britain’s national election campaign dominated European financial markets.

Back home, healthcare stocks witnessed immense weakness, following concerns on their profitability in the US on the back of pricing pressures. Results of major firms being dismal were also ailing the sector, and thereby dragged the stocks as well. Lupin and Aurobindo Pharma hit 52-weeks low, while Sun Pharmaceutical Industries touched three and half year low. Anil Dhirubhai Ambani Group (ADAG) stocks closed in red after a media report indicated that as much as 10 banks have raised a red flag on Reliance Communications (RCom) that posted a loss of Rs 1,285 crore in FY17. Reliance Infrastructure, Reliance Defence & Engineering and Reliance Capital also closed in red.

The BSE Sensex ended at 31109.06, up by 80.85 points or 0.26% after trading in a range of 30869.90 and 31214.39. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.05%, while Small cap index down by 1.56%. (Provisional)

The few gaining sectoral indices on the BSE were FMCG up by 1.73%, Auto up by 0.54% and Consumer Durables up by 0.14%, while Realty down by 4.56%, Healthcare down by 3.01%, PSU down by 1.36%, IT down by 1.21% and Capital Goods down by 1.09% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Power Grid up by 3.62%, Hindustan Unilever up by 3.58%, HDFC up by 3.30%, Cipla up by 2.62% and ITC up by 2.38%. (Provisional)

On the flip side, Sun Pharma down by 11.93%, Adani Ports & Special Economic Zone down by 5.32%, ICICI Bank down by 2.38%, SBI down by 1.37% and Axis Bank down by 1.35% were the top losers. (Provisional)

Meanwhile, impacted by stringent norms put in place by Securities and Exchange Board of India (SEBI) to curb the inflow of illicit funds, the share of foreign portfolio investments (FPI) through participatory notes (P-notes) has declined to 4-month low of Rs 1.68 lakh crore at the end of April. According to the data released by SEBI, the total value of P-Notes investment in Indian markets including equity, debt and derivatives, at April-end, declined to Rs 1,68,545 crore, from Rs 1,78,437 crore at the end of March. The total investment value through P-notes stood at Rs 1,70,191 crore in February-end and Rs 1,75,088 crore in January-end.

Of the total, P-note holdings in equities at April-end were at Rs 1,09,541 crore, while in debts and derivatives were at Rs 18,839 crore and Rs 40,165 crore respectively. The quantum of FPI investments via P-Notes decreased to 6 percent in April, from 6.6 percent in the preceding month. This was the lowest level of investment through the route since December, when the cumulative value of such investment stood at Rs 1.57 lakh crore.

The Special Investigation Team (SIT) on black money, set up by the Supreme Court, had recommended a slew of measures, including the need for Sebi to come up with stricter regulations on P-notes. Following which in order to strengthen the regulatory framework for P-notes, Sebi had recently tightened the norm by barring resident Indians, NRIs and entities owned by them from making investment through P-notes.

The CNX Nifty ended at 9601.95, up by 6.85 points or 0.07% after trading in a range of 9547.70 and 9637.75. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Power Grid up by 3.73%, Hindustan Unilever up by 3.35%, Cipla up by 3.32%, HDFC up by 3.11% and Bharti Infratel up by 2.64%. (Provisional)

On the flip side, Sun Pharma down by 11.74%, Tech Mahindra down by 11.41%, Adani Ports & Special Economic Zone down by 5.89%, Aurobindo Pharma down by 4.01% and Yes Bank down by 3.84% were the top losers. (Provisional)

The European markets were trading mixed; Germany’s DAX increased 8.53 points or 0.07% to 12,610.71, while France’s CAC decreased 5.55 points or 0.1% to 5,331.09.

Asian equity markets ended mostly in red on Monday after leaders of the G7 group of rich nations failed to make progress on narrowing differences on climate change and North Korea fired another missile off its east coast, the latest in a fast-paced series of missile tests defying world pressure and threats of more sanctions. Investor sentiment was also dampened after opinion polls published since the Manchester attack showed British Prime Minister Theresa May's lead over the opposition Labour Party has narrowed ahead of a June 8 election. Trading volumes remained thin across the region amid holidays in China, Britain and the United States. Japanese shares ended flat in choppy trade as investors waited for key US economic indicators out this week, including employment data, to provide clues on how soon US interest rates might rise. Meanwhile, Hong Kong stocks ended up, on which China markets were closed, with mainland property shares aiding the rise on anticipation of strong home demand in smaller Chinese cities.