Post Session: Quick Review

Indian equity markets traded in green for most part of the day but ended the session on a flat note with negative bias. The equity benchmarks made a positive start and traded in fine fettle in early deals after economic think-tank NCAER revised up its projection for the country’s economic growth to 7.6 per cent for the current fiscal, compared with the earlier prediction of 7.3 per cent on forecast of normal monsoon. In its quarterly review of the economy, NCAER said prospects for the agricultural sector in 2017-18 remain optimistic on forecast of good rains. The agency has also revised upward its forecast of GVA (Gross Value Added at Basic Prices) growth at 7.3 per cent for 2017-18 from its February estimate of 7 per cent. Meanwhile, minutes from Reserve Bank of India’s last meeting showed that its monetary policy committee welcomed data showing inflation easing below its target, but wanted more assurance the trend would continue before deciding whether to lower interest rates. The RBI voted 5-1 to keep the repo rate at 6.25 per cent earlier this month but issued a slightly less hawkish statement after consumer inflation eased to 2.99 per cent in April, below its 4 per cent target. In a key decision, the market regulator SEBI banned participatory notes (p-notes) from taking naked positions in the derivatives segment, and eased the entry process for foreign portfolio investors (FPIs). It also removed the one-year lock-in requirement for private equity investors registered as alternative investment funds (AIFs) in initial public offerings (IPOs).

Investors took a cautious approach after Indian IT services industry body National Association of Software and Services Companies (NASSCOM) enlightened that it expects software export growth to slow to 7-8 percent in the current financial year from 8.6 percent a year earlier. Besides, a foreign brokerage firm sees subdued June quarter numbers for most biz after GST implementation. It highlighted that structural benefits of better tax compliance leading to higher tax-to-GDP ratio, seamless trade across the country driving improved logistics and corporate efficiencies, and shift in business from unorganized to organized should be visible with a lag of 3-4 quarters.

On the global front, Asian markets closed mixed. Bank of Japan Deputy Governor Kikuo Iwata dismissed the need to raise interest rates any time soon, stressing that the economy still needs support from powerful monetary easing with inflation distant from the central bank’s 2 percent target. European markets were trading in red for third straight day as battered oil prices hovered near seven-month lows hit overnight on worries about a supply glut and falling demand. The European Central Bank said in a regular economic bulletin that economic data points to solid growth in the euro zone in the second quarter and indicates a rebound in global growth after a rough patch.

Back home, stocks like KMG Milk Foods and Umang Dairies closed in green on report that the government has banned milk, milk products and confectionary items from China for a period of 1 year.

The BSE Sensex ended at 31278.32, down by 5.32 points or 0.02% after trading in a range of 31258.80 and 31522.87. There were 13 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.66%, while Small cap index was down by 0.58%. (Provisional)

The only gaining sectoral index on BSE was Bankex up by 0.07%, while Realty down by 1.82%, Oil & Gas down by 1.78%, Metal down by 1.47%, PSU down by 1.22% and Utilities down by 1.16% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 2.05%, HDFC up by 1.66%, SBI up by 1.21%, Reliance Industries up by 1.18% and Bajaj Auto up by 0.99%. (Provisional)

On the flip side, ONGC down by 2.76%, Hindustan Unilever down by 2.73%, Lupin down by 2.67%, Coal India down by 2.09% and Dr. Reddy’s Lab down by 1.95% were the top losers. (Provisional)

Meanwhile, in view of continuous growth in the country’s export, Exporters body Federation of Indian Export Organisations (FIEO) has set the export target of $325 billion this fiscal year. FIEO in a statement said that “Indian exports have been on an upward trend in last few months with export of $275 billion in last fiscal and a target of $325 billion to achieve in 2017-18”.

FIEO welcomed the introduction of the Goods and Services Tax (GST) and said that its spin off effect would benefit both the manufacturing and export sector. It said that GST is a well needed reform and the transition will require some time, and calibrated process of foreign trade policy will be continuous. FIEO president Ganesh Kumar Gupta though said that, while India showed a positive trend on exports since the last 9 months, but the business is a bit anxious regarding to the Goods and Services Tax (GST).

Commerce Secretary while interacting with the FIEO sought policy inputs and suggestions at a Mid Term Review of Foreign Trade Policy interactive session. The meeting also covered topics like SEZ electricity duty refunds, issues related to non EDI land ports and Bangladesh exports and about shipping lines overcharging.

The CNX Nifty ended at 9630.40, down by 3.20 points or 0.03% after trading in a range of 9617.75 and 9698.85. There were 22 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Sun Pharma up by 2.01%, HDFC up by 1.95%, Aurobindo Pharma up by 1.68%, Yes Bank up by 1.49% and Ultratech Cement up by 1.32%. (Provisional)

On the flip side, Indian Oil Corporation down by 3.82%, ONGC down by 2.76%, Hindustan Unilever down by 2.69%, Lupin down by 2.68% and Hindalco down by 2.57% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 33.02 points or 0.44% to 7,414.77, Germany’s DAX decreased 35.75 points or 0.28% to 12,738.51 and France’s CAC decreased 28.69 points or 0.54% to 5,245.57.

Asian stocks closed mixed on Thursday as oil prices held steady in Asian deals after falling more than 2 percent overnight on worries over whether OPEC-led output cuts would be able to rein in a three-year glut. Chinese shares ended lower as the initial euphoria over MSCI's decision to include China's so-called A-shares in its emerging-markets index faded. Further, Japanese shares ended lower as the dollar edged away from a three-week high versus the yen.