Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day and ended the session with modest gains. The markets resumed their record-setting spree to hit fresh lifetime highs, with the benchmark BSE Sensex touching an all-time high of 31,332.56 and the NSE index Nifty climbed to a new peak of 9,673.50. Investors remained cautious ahead of the Reserve Bank of India’s policy meeting scheduled next week. The central bank is expected to keep rates on hold on June 7, though it could soften its hawkish tone after data showed easing inflation. The equity benchmarks made a positive start and traded in fine fettle in early deals after NITI Aayog Vice Chairman Arvind Panagariya expressed his hopes that India will regain the tag of world’s fastest growing major economy, outpacing China, as early as the first quarter (April-June) of 2017-18 on the back of host of reforms initiated by the Modi government in the last three years. He also said that the growth will rebound at a minimum of 7.5% in the current fiscal and accelerate further in the coming years. Expressing its optimism about India’s move to implement key reforms and bring structural changes, the global credit rating agency, Moody’s Investors Service in its latest report has said that a number of wide-ranging reforms initiated by the government would gradually ease the country’s high debt burden, if implemented successfully. Further, the agency has noted that demonetization & financial inclusion efforts will help broaden the tax base, while expenditure reforms will enhance spending efficiency and the Aadhaar identification system can help reduce fiscal leakage.

Some support also came after a foreign brokerage firm stated that India’s GDP growth is expected to recover from 7.1 per cent in 2016-17 to 7.2 per cent this fiscal and further to 7.7 per cent in 2018-19. The note highlighted that despite a gradual pace of recovery on the ground, the ongoing structural reform push by policymakers -- including enabling implementation of GST, adoption of inflation targeting, a new bankruptcy code, financial inclusion, liberalization of FDI, measures to curb black money and encouraging digitalization -- will help improve productivity dynamics and lay the foundation for sustainable growth. Meanwhile, Chief Statistician T C A Anant said the impact assessment of notes ban on GDP growth by a section of analysts, who have pre-conceived notions about reality, is over stated and fallacious.

On the global front, Asian markets closed in green. A private poll highlighted that Japan’s economy is expected to have expanded more quickly in the first quarter than initially estimated, buoyed by gains in corporate capital spending. South Korea released the revised Q1 GDP, which reflected the economy grew 2.9% on year compared to 2.7%. The European markets were trading in green as factory growth boosted investor optimism. UK construction sector activity surged to a 17-month high in May, bolstering optimism over the British real estate market. UK construction purchasing managers’ index rose to a seasonally adjusted 56.0 last month from April’s reading of 53.1.

The BSE Sensex ended at 31240.78, up by 103.19 points or 0.33% after trading in a range of 31190.40 and 31332.56. There were 19 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.64%, while Small cap index was up by 0.46%.  (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.27%, Healthcare up by 1.04%, Consumer Durables up by 0.99%, Telecom up by 0.90% and FMCG up by 0.74%, while Oil & Gas down by 0.52%, Energy down by 0.41%, Metal down by 0.24%, Capital Goods down by 0.06% and PSU down by 0.03% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 2.88%, Cipla up by 2.74%, Adani Ports & Special Economic Zone up by 2.20%, Bharti Airtel up by 1.59% and Wipro up by 1.52%.  (Provisional)

On the flip side, GAIL India down by 1.64%, Tata Steel down by 1.29%, Power Grid down by 0.77%, ICICI Bank down by 0.64% and Hindustan Unilever down by 0.59% were the top losers. (Provisional)

Meanwhile, after putting the Strategic Partnership (SP) policy in public domain, Defense Minister Arun Jaitley has said that the government is focused on expanding defence manufacturing within the country, noting that the new SP policy will help attract foreign direct investment (FDI) as global investors would be assured of orders.
He further highlighted the features of the policy, saying that there is only one procurer of defence equipment within India that is the government of India. Unless opening of FDI is accompanied by some reasonable possibility of a possible investor getting orders, he is not going to set up an establishment, hence the SP policy now has been brought in as it will supplement the FDI policy.

Jailey said that the government is looking at a balance between the defence public sector units and bringing private sector in defence manufacturing, with an aim to commit all national resources to it and to unleash its potential. He further added that the new policy will help to achieve this by bringing foreign companies either through FDI route or through technology transfer. Jaitley also said that the FDI changes in the sector opened the door and effort is to encourage them to set up facilities in the country.

The new SP policy aims to create a vibrant defence manufacturing ecosystem in the country through involvement of both the major Indian corporates as well as the MSME sector and is likely to reduce current dependence on imports and gradually ensure greater self-reliance & dependability of supplies essential to meet national security objectives.

The CNX Nifty ended at 9652.20, up by 36.10 points or 0.38% after trading in a range of 9637.45 and 9673.50. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hero MotoCorp up by 3.12%, Cipla up by 2.74%, Adani Ports & Special Economic Zone up by 2.51%, Yes Bank up by 2.46% and Aurobindo Pharma up by 2.11%.  (Provisional)

On the flip side, BPCL down by 1.91%, GAIL India down by 1.83%, Indiabulls Housing down by 1.17%, Vedanta down by 1.04% and Tata Steel down by 1.04% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 22.85 points or 0.3% to 7,566.62, Germany’s DAX increased 168.27 points or 1.33% to 12,833.19 and France’s CAC increased 44.65 points or 0.84% to 5,363.32.

Asian equity markets ended in green on Friday as a set of upbeat economic data from the US and Europe helped investors shrug off US President Donald Trump's decision to withdraw from the Paris climate agreement. The focus remained on the all-important US jobs report due out later in the day as it could have a significant impact on the outlook for interest rates. US employment is expected to increase by 185,000 jobs in May after an increase of 211,000 jobs in April. The unemployment rate is expected to hold at 4.4 percent. Japanese shares led regional gains as strong US private hiring data helped lift the dollar to a one-week high against the yen. Meanwhile, Chinese stocks ended little changed as investors fretted over tighter liquidity and slowing economic growth.