Post Session: Quick Review

Indian equity markets altered between red and green territory but settled marginally in red. The Nifty opened higher above 10,000 mark but retreated due to profit-booking by funds and retail investors. Domestic sentiments turned cautious as investors await the US Federal Reserve meeting due later today on clues over next policy tightening. The equity benchmarks pared most of their initial gains but still traded in green in early deals as traders took support with commerce and industry minister Nirmala Sitharaman’s statement that Foreign Direct Investment (FDI) inflows into the country increased 23 percent in the first two months of the current fiscal from a year ago. The minister said the government has put in place an investor-friendly policy for FDI and except for a small negative list most sectors are open for 100 percent FDI. However, the minister enlightened that India’s trade deficit with China is a matter of concern and efforts are being made to increase overall exports by diversifying the trade basket with emphasis on manufactured goods, services, resolution of market access issues and other non-tariff barriers. Separately, India ranked number two on Grant Thornton’s Business Optimism Index in the second quarter of 2017. The Grant Thornton International Business Report (IBR) said that the confidence in Indian businesses is backed by a buoyant economy and continued reforms. According to the IBR survey, India’s ranking has gone up from fourth to the second position in Q2. 94 percent of the surveyed businesses are confident about the growth of the Indian economy.

Investors took note that with an aim to push India’s economic growth at a rapid pace, government think tank Niti Aayog has made a strong case for boosting investments and savings. The Aayog has stressed on sustaining macro-economic stability in its appraisal of the Twelfth Five Year Plan (2012-17). The document noted that lower savings and investment rates are still a major cause of worry. Therefore, it pointed out that the strong and dedicated efforts in terms of appropriate policy interventions in a time-bound manner are needed in order to boost savings and investment in the economy. Some cautiousness prevailed after a private report highlighted that business confidence for the July-September quarter declined 13 per cent over the last year as companies are seeing some teething issues on their road to compliance with the new GST regime. The report added that concerns related to future demand conditions and weak new investment demand could have also operated as binding constraints on business sentiment.

On the global front, Asian markets closed mixed. China’s economy is likely to grow at an annual rate of around 6.7 percent in the second half of 2017, slowing slightly from the first half of the year, the State Information Center (SIC) said. It forecast full-year growth in the world’s second largest economy of around 6.8 percent. The European markets were trading in green as strength among commodity firms and banking stocks as well as a string of solid updates boosted shares. A slowdown in euro zone business growth at the start of the second half of 2017, alongside declining inflation pressures in a key business survey, could put paid to expectations of a stimulus claw back by the European Central Bank later this year.

Back home, telecom companies stocks Bharti Airtel, Idea Cellular, Reliance Communications, MTNL and TTML closed in green on reports that in the recently concluded meeting between the Finance Ministry and Telecommunications Department, inter-ministerial group (IMG) is said to have discussed relaxing spectrum payments for telcos. The deferred payment period for spectrum is likely to be extended to 16 years (earlier 10 years). These relief measures, if they come about, are expected to ease cash flow pressures for the telecommunications sector.

The BSE Sensex ended at 32211.43, down by 34.44 points or 0.11% after trading in a range of 32196.86 and 32374.30. There were 13 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.48%, while Small cap index was up by 0.13%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.02%, Metal up by 1.61%, Basic Materials up by 0.75%, Realty up by 0.48% and Bankex up by 0.40%, while Capital Goods down by 0.65%, Industrials down by 0.62%, Energy down by 0.47%, Auto down by 0.38% and Healthcare down by 0.37% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 2.28%, Bharti Airtel up by 1.86%, TCS up by 1.63%, Tata Steel up by 1.11% and Adani Ports & Special Economic Zone up by 0.85%. (Provisional)

On the flip side, Lupin down by 1.98%, Tata Motors down by 1.66%, Tata Motors - DVR down by 1.64%, Coal India down by 1.09% and Sun Pharma down by 0.86% were the top losers. (Provisional)

Meanwhile, on back of host of measures taken by the government post demonetization to increase tax base, income taxpayer base moved up substantially to 6.26 crore at the end of the last fiscal, from nearly 4 crore earlier. The Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra said that with the enactment of the amended Benami law, the tax officials have found out clusters and persons who have invested money in real estate without filing tax returns.

Chandra said that the depertment is working on widening of the tax net which remains as a challenge before the taxmen, adding that they will start working on expanding the process of e-assessment and the next step would be to undertake complete scrutiny on systems so that assessees don’t have to visit tax office.

CBDT Chairman made clear that Non-resident Indians (NRIs), expats, as well as foreigners with investments in private equity in India will have to give details of their bank accounts only when a refund is due to the assessee. Revenue Secretary Hasmukh Adhia also appreciated the growth of the Income Tax department, saying that of the last 25 years, in 11 years the Income Tax department has achieved a growth rate of 20 per cent and even a growth rate of 30 per cent in the year after demonetisation is considered modest.

The CNX Nifty ended at 9965.10, down by 1.30 points or 0.01% after trading in a range of 9949.10 and 10011.30. There were 24 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Vedanta up by 4.21%, Indiabulls Housing up by 3.42%, Hindalco up by 2.96%, Axis Bank up by 2.36% and TCS up by 1.84%. (Provisional)

On the flip side, Zee Entertainment down by 2.96%, Ultratech Cement down by 2.32%, Tech Mahindra down by 1.98%, Lupin down by 1.76% and Tata Motors down by 1.66% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 63.05 points or 0.85% to 7,440.78, Germany’s DAX increased 62.25 points or 0.51% to 12,271.20 and France’s CAC increased 44.41 points or 0.87% to 5,172.11.

Asian equity markets closed mixed on Tuesday as oil extended overnight gains and the Japanese yen weakened ahead of the two-day policy meeting of the Federal Reserve starting later today. The Fed is widely expected to leave interest rates unchanged but investors will be looking for clues on whether the US central bank will raise interest rates again this year. Chinese stocks ended lower as investors booked profits in recent outperformers such as real estate and resource firms. Investors’ sentiments were also dented after China's top decision-making body emphasized stricter financial discipline for the rest of 2017. Japanese shares ended lower in choppy trade, drawing little support from a weaker yen, which pulled back from a five-week high versus the dollar.