Post Session: Quick Review

Indian equity markets traded in red for most part of the day and ended the session with a cut of around six tenth of a percent. Sensex closed below 31000 mark for first time since May 25, 2017. The NSE Nifty fell for fifth straight session but held 9500 mark. The equity benchmarks entered into red terrain in early deals after CRISIL in its latest report said that the recent measures taken by the Reserve Bank of India (RBI) to deal with the issue of non-performing assets (NPAs) are likely to increase provisioning by another 25 percent in the fiscal year 2017-18 as compared to 9 percent in the last fiscal, as banks will take up to 60 percent haircut on the 50 top NPAs, based on their embedded value. The largest 12 accounts the RBI named are - Bhushan Steel, Lanco Infra, Essar Steel, Bhushan Power, Alok Industries, Amtek Auto, Monnet Ispat, Electrosteel Steels, Era Infra, Jypaee Infratech, ABG Shipyard and Jyoti Structures. Of these, six have already been referred to the National Company Law Tribunal (NCLT). A domestic brokerage report highlighted that there was a record low bank credit growth of 5.1% in FY17 which was led by the top 1,000 listed corporates which saw their net loan outstanding decline by a whopping Rs 1 trillion in the reporting year. One-third of this massive contraction was led by just 10 companies, which cumulatively availed of Rs 33,571 crore less in the year over the previous year. Meanwhile, Finance Minister Arun Jaitley said that the Centre made a last-ditch effort to get Jammu & Kashmir on board to launch goods and services tax (GST) from July 1 suggesting that the state government had elbow room to convey its concurrence to join the new regime. He cautioned that a failure to launch GST will impact consumers and businesses in the state.

On the global front, Asian markets closed mostly in green, while Japanese stocks edged towards two-year highs as exporters benefited from dollar strength. China’s Premier Li Keqiang said that the country is entirely capable of achieving its full-year growth target and controlling systemic risks despite many challenges facing its economy. Beijing is targeting economic growth of around 6.5 percent in 2017, compared with the actual 6.7 percent pace in 2016 - the slowest in 26 years. European markets were trading in red after the president of the European Central Bank, Mario Draghi, defended the bank’s loose monetary policy and said a premature ending to easing could lead to another recession.

Back home, shares of Public Sector Undertaking (PSU) banks closed mostly in red with Nifty PSU Bank index down by more than three percent on the National Stock Exchange (NSE) as provisioning of banks may rise to deal with the NPA mess. There were reports that the Reserve Bank of India (RBI) has asked banks to set aside at least 50% of the loan amount for accounts referred to bankruptcy courts.

The BSE Sensex ended at 30956.07, down by 182.14 points or 0.58% after trading in a range of 30847.08 and 31294.96. There were 11 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.74%, while Small cap index was down by 1.61%. (Provisional)

The only gaining sectoral indices on the BSE were Telecom up by 1.12% and Consumer Durables up by 0.42%, while Realty down by 1.45%, Bankex down by 1.43%, PSU down by 1.34%, Capital Goods down by 1.28% and IT down by 1.17% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 1.39%, ONGC up by 1.30%, Hero MotoCorp up by 1.19%, Tata Steel up by 0.88% and Tata Motors - DVR up by 0.67%. (Provisional)

On the flip side, SBI down by 3.06%, Axis Bank down by 1.92%, Infosys down by 1.84%, Asian Paints down by 1.64% and Bajaj Auto down by 1.55% were the top losers. (Provisional)

Meanwhile, with less than one week remaining for Goods and Service Tax (GST) regime rollout, the Union Minister M Venkaiah Naidu, hailing it as the biggest tax reform since independence, has said that there will be some troubles initially but in the long term, the new tax regime will help consumers and traders. He also added that it will bring down inflation and prices, improve ease of doing business and strengthen the economy in long run.

Naidu further urged all political parties to support the GST which is scheduled to be rollout from July 1. The Union Minister also stated that the GST will bring economic integration, reduce delays and end discrimination among taxpayers, noting that power of taxation has now been given to the GST Council, which will be responsible for all taxation-related matters hereafter.

The minister also said that although 142 nations around the globe are implementing GST, India is unique because of the vastness of the country, its huge population and the midnight of June 30 will usher in a historic economic transformation.

The CNX Nifty ended at 9512.95, down by 62.00 points or 0.65% after trading in a range of 9473.45 and 9615.40. There were 20 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indian Oil Corporation up by 1.96%, GAIL India up by 1.54%, Hero MotoCorp up by 1.30%, Bharti Airtel up by 1.28% and ONGC up by 1.17%. (Provisional)

On the flip side, Bank of Baroda down by 4.07%, ACC down by 4.04%, Zee Entertainment down by 3.71%, Ultratech Cement down by 3.20% and SBI down by 2.99% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 3.5 points or 0.05% to 7,443.30, Germany’s DAX decreased 36.45 points or 0.29% to 12,734.38 and France’s CAC decreased 18.83 points or 0.36% to 5,276.92.

Asian equity markets ended mostly in green on Tuesday. A weaker yen helped exporters rise in Japan and solid industrial profits data supported underlying sentiments in China. ECB President Mario Draghi talked up benefits of the ECB's easy monetary policy and crude oil futures rose for a fourth consecutive session on Tuesday. Meanwhile, investors looked ahead to Federal Reserve Chair Janet Yellen's speech later in the day for additional clues on whether the US central bank will hike rates going forward. Chinese shares ended higher after official data showed profit growth in China's industrial sector picked up speed in May, but investors turned cautious amid a strong rally in blue-chips after MSCI decided last week to add 222 China-listed stocks to its Emerging Markets Index. The markets in Malaysia and Indonesia remained closed in observance of Eid-ul-Fitr.