Post Session: Quick Review

Indian equity benchmarks traded on a lackluster note oscillating between green and red terrain and ended the session on a flat note with positive bias ahead of GDP data. The Sensex and Nifty closed on a flat note after hitting record highs as investors waited for fresh corporate triggers with the results season coming to an end. The Central Statistics Office (CSO) will release Gross Domestic Product (GDP) growth estimates for 2016-17 that will factor in rebased factory output and Wholesale Price Index (WPI) data. Sentiments got some support on report that Southwest monsoon arrived in Kerala on the expected date this year and is advancing into some parts of the Northeast India. A better than expected monsoon gets reflected in the balance sheet of companies. It usually results in better earnings for companies in the following quarter. The equity benchmarks made a cautious start in early deals ahead of the fourth quarter gross domestic product (GDP) numbers to be released post market hours. Meanwhile, India’s former chief statistician Pronab Sen statement that with the recent revision of the base year of the Wholesale Price Index (WPI) and the Index of Industrial Production (IIP) to 2011-12 from 2004-05, the country’s gross domestic product (GDP) for fiscal year 2016-17 will get a 40-50 basis points (bps) push to 7.6 percent against the Central Statistics Office (CSO) prediction of 7.1 percent. A foreign brokerage firm reported that states can look at a higher revenue of Rs 350-450 billion after GST implementation in mid-2017. The study that assessed underlying dynamics of various states' finances over a decade said if they can keep their fiscal deficits within the budgeted target, and the Central government adheres to its target of 3.2 percent of GDP, the combined 2017-18 deficit could be 6 percent (or lower).

On the global front, Asian markets closed mixed, with China closing in green after a two-day break on upbeat news. China’s manufacturing sector expended faster than expected in May, highlighting continued steady growth. The National Bureau of Statistic’s official Purchasing Managers’ Index (PMI) came in at 51.2 higher than the 51.0 expected and even with 51.2 in April. European stocks were trading mostly in green after the release of upbeat Chinese data lifted markets’ sentiments, although UK political jitters ahead of the June 8 election were expected to weigh. In London, FTSE 100 rose as the pound moved lower after a new poll showed that British Prime Minister Theresa May’s Conservative Party could lose 20 of the 330 seats it holds in Parliament while the opposition Labour Party could gain nearly 30 seats.

Back home, banking stocks showed mixed trend after global rating agency enlightened that Indian banks’ stressed assets are likely to increase to 15 percent of total loans by March 2018, with PSU banks accounting for most of the loans even as their regulatory capital requirements will continue to rise till 2019. The agency added that Indian banks’ credit profiles are unlikely to improve over the next 12 months.

The BSE Sensex ended at 31164.25, up by 4.85 points or 0.02% after trading in a range of 31107.48 and 31255.28. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.04%, while Small cap index was up by 1.15%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 1.19%, Realty up by 0.95%, Consumer Durables up by 0.92%, Consumer Disc up by 0.84% and Auto up by 0.71%, while Metal down by 1.40%, IT down by 0.97%, TECK down by 0.79%, Energy down by 0.57% and Capital Goods down by 0.08% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 3.56%, GAIL India up by 3.07%, Lupin up by 3.00%, Power Grid up by 2.23% and ICICI Bank up by 1.87%. (Provisional)

On the flip side, Infosys down by 2.12%, Reliance Industries down by 1.46%, Coal India down by 1.25%, Asian Paints down by 1.16% and Sun Pharma down by 1.13% were the top losers. (Provisional)

Meanwhile, just ahead of the release of the fourth quarter GDP numbers, the global credit rating agency, Moody's Investors Service in its latest report ‘Global Macro Outlook’ has said that Indian economy will grow by 7.5 per cent in the current fiscal year, 7.7 per cent in 2018-19 and will reach to around 8 per cent in 3-4 years on the back of government's various reforms.

The agency said that the economy will strengthen as the impact of last year's demonetization fades and with the government successfully pushing through several key reforms such as liberalisation of FDI rules in a number of key sectors, July rollout of the Goods & Service Tax (GST) and a national bankruptcy code, noting that these reforms will help reduce inefficiencies and improve trend growth over the long run.

However, the report has pointed that the private sector investment has remained weak despite progress on reforms. On the problem of mounting bad loans, Moody's noted that persistent banking sector weakness from a high proportion of delinquent loans on bank balance sheets will weigh on growth, if not resolved, by constraining credit for investment related activity. Besides, it said that the inflation rate will rise to around 5 per cent by the end of this year and expects the Reserve Bank of India to hold the policy repo rate steady, holding a neutral stance in this growth environment.

The CNX Nifty ended at 9626.40, up by 1.85 points or 0.02% after trading in a range of 9609.25 and 9649.60. There were 21 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Mahindra & Mahindra up by 3.86%, Indiabulls Housing up by 3.31%, Ultratech Cement up by 2.86%, Lupin up by 2.64% and Indian Oil up by 2.32%. (Provisional)

On the flip side, Vedanta down by 2.61%, Infosys down by 2.02%, Aurobindo Pharma down by 1.77%, Coal India down by 1.72% and Tata Power down by 1.70% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 20.36 points or 0.27% to 7,546.87, Germany’s DAX increased 14.97 points or 0.12% to 12,613.65, while France’s CAC decreased 0.84 points or 0.02% to 5,305.10.

Asian equity markets made a mixed closing on Wednesday as a stronger yen and a fall in oil prices ahead of weekly US industry inventory estimates later in the day offset better-than-expected manufacturing data from China. Japanese shares ended lower as the dollar hit two-week lows against the yen after mixed US data released overnight and new poll results showing that UK Conservatives could fall short of overall majority in next month's national election. Meanwhile, Chinese shares ended higher after data showed activity in China's manufacturing sector grew faster than expected in May. China's manufacturing sector continued to expand in May and at a steady pace, with a manufacturing PMI score of 51.2. That's unchanged from the April reading and surpassed expectations for 51.0. The non-manufacturing PMI came in with a score of 54.5 up from 54.0 in the previous month.