Post Session: Quick Review

Indian equity benchmarks traded in a narrow range throughout the day and ended the session modestly in green. Nifty closed near intraday record high as the arrival of monsoon rains kept the sentiments upbeat. The monsoon, which delivers about 70 per cent of India’s annual rainfall, arrived at the southern Kerala coast, in line with forecasts, brightening the outlook for higher farm output and robust economic growth. Pharma stocks continued to see strong gains after days of correction. The equity benchmarks despite a dismal start managed to enter into green terrain in early deals as traders got some support after World Bank in its ‘India Development Report’ increased its hopes that India, the fastest growing major economy in the world, will grow at 7.2 per cent in the current fiscal and further up to 7.7 per cent by 2019-20 on strong fundamentals, reform momentum and improving investment scenario. The World Bank had in January scaled down India’s growth forecast to 7 per cent for 2016-17 and had estimated growth to rebound in 2017-18 to 7.6 per cent. In its latest report it said that Economic activity ought to accelerate in 2017-18 and GDP is projected to grow at 7.2 per cent from 6.8 per cent in 2016-17. According to domestic brokerage report India’s GDP numbers for the fiscal 2015-16 and 2016-17 are expected to be revised to 8.3 per cent and 7.6 per cent, respectively, because of new IIP and GDP series. The GDP numbers scheduled to be released on May 31, is expected to be pleasant affair and the new IIP and WPI series will impact all GDP numbers from 2013-14.

Some support also came after terming the Goods and Services Tax (GST) as a more efficient tax structure, Finance Minister Arun Jaitley stated that the new taxation regime will make tax collection efficient, check evasion and will also help India evolve as a more tax-compliant society.  He further added that GST is a product of federal India and it would require coordination between taxation authority of the Centre and the states. In view of this, tax training academies like National Academy of Customs, Indirect Taxes and Narcotics (NACIN) will play a major role in training officials.

On the global front, Asian markets closed mostly in red, with Nikkei closing slightly in red as losses in the Financial Services, Steel and Chemical, Petroleum & Plastic sectors led shares lower. In economic news, Japan household spending dipped 1.4% for the month of April, weaker than the 0.7% forecast. Meanwhile, April retail sales rose 3.2% on year, compared to a forecast of a 2.3% rise. European stock markets were trading in red as political issues throughout the euro zone weighed on sentiments and banks were under pressure after an analyst downgrade.

The BSE Sensex ended at 31159.10, up by 49.82 points or 0.16% after trading in a range of 31064.04 and 31220.38. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.94%, while Small cap index was up by 0.52%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 2.39%, Realty up by 1.27%, Utilities up by 0.92%, Basic Materials up by 0.84% and Bankex up by 0.63%, while Telecom down by 0.97%, Consumer Durables down by 0.92%, FMCG down by 0.91%, Capital Goods down by 0.88% and Power down by 0.23% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 3.56%, NTPC up by 2.97%, Lupin up by 2.31%, Dr. Reddy’s Lab up by 2.15% and Hero MotoCorp up by 2.06%. (Provisional)

On the flip side, Power Grid down by 1.89%, ITC down by 1.74%, HDFC down by 1.18%, Bharti Airtel down by 0.94% and TCS down by 0.94% were the top losers. (Provisional)

Meanwhile, in order to further enhance the transparency in the process of issuance and monitoring of offshore derivative instruments (ODIs), the capital market regulator, Securities and Exchange Board of India (SEBI) has proposed to tighten norms for ODIs by levying a fee as well as prohibiting them from being issued against derivatives except for those used for hedging purposes.

In its latest consultation paper on ‘streamlining the process of monitoring of ODIs or participatory notes (PNs)’, the Sebi has suggested levying a regulatory fee of $ 1,000 for a period of every three years, on ODI issuers and on each investor in these instruments, beginning from April 1, 2017. This move will discourage the ODI subscribers from taking ODI route and encourage them to directly take registration as foreign portfolio investors (FPIs).

The consultation paper states that the ODI  issuers  will be  given  time  till  December  31,  2020  to  wind  up  the  ODIs  issued against derivatives which are not for hedging purpose and it will be incumbent on ODI  issuing  FPI  to  ensure  that  ODI  is  issued  against  those  derivatives  which  are  purely for hedging purpose and not for naked speculation.  It has further said that the ODI issuing FPI shall put in place necessary system to ensure the same. As  a  result  of  the  different recent steps  taken  by  SEBI there  has  been  a  significant  reduction  in  the  notional  value  of  Outstanding  ODIs.

The CNX Nifty ended at 9626.15, up by 21.25 points or 0.22% after trading in a range of 9581.20 and 9635.30. There were 37 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Aurobindo Pharma up by 13.58%, Adani Ports & Special Economic Zone up by 4.01%, Bank of Baroda up by 3.05%, NTPC up by 3.00% and Tech Mahindra up by 2.28%. (Provisional)

On the flip side, Power Grid down by 2.42%, BPCL down by 1.98%, Bharti Infratel down by 1.40%, ITC down by 1.35% and IndusInd Bank down by 1.17% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 27.63 points or 0.37% to 7,520.00, Germany’s DAX decreased 4.85 points or 0.04% to 12,624.10 and France’s CAC decreased 29.03 points or 0.54% to 5,303.44.

Asian equity markets ended mostly in red on Tuesday as fears about political risks in Europe sapped investors' appetite for risk and helped spur demand for safe-haven assets such as the Japanese yen and gold. Trading volumes remained thin across the region amid public holidays in China, Hong Kong and Taiwan. Investors kept an eye on the US jobs report due this Friday after Fed Bank of San Francisco President John Williams said three interest-rate increases this year makes sense. Japanese shares ended marginally lower as the yen strengthened amid the prospect of early elections in Italy and concerns about a Greek bailout. In economic releases, Japanese household spending declined again in April, official figures showed today, while retail sales rose more than expected and the jobless rate held steady at a two-decade low in the month, Consumer price inflation rose an annual 0.3 percent, well below the BOJ's 2 percent target.