Post Session: Quick Review

Indian equity markets traded in a narrow range for most part of the day and ended with cut of around a quarter percent. The last hour of trade witnessed a volatile trade on account of negative rollover of Futures & Options (F&O) positions on expiry day which pulled the benchmarks below neural line. However, Sensex & Nifty were up by over 2% each in December series while Nifty Bank was down by 1%. The market breadth was mildly in favour of advances with one stock advancing against every declining one.

The equity benchmarks made a cautious start but managed to trade above water in early deals following firm global cues. The sentiments were upbeat on report that the capital markets regulator, Securities and Exchange Board of India (SEBI) is likely to ease entry norms for FPIs willing to invest in the Indian markets. It may ease some rules, including expanding the eligible jurisdictions for registration by including countries with diplomatic tie-ups with India. Separately, Ravi P Sehgal, the new chairman of the EEPC India, the apex organization of the country’s engineering exporters said that the year 2018 is expected to be a good year for exports on back of global trade boom. The chairman added that the IMF has outlined, that the global trade has grown at a faster clip than the overall world output growth, as the US, Euro zone, Japan and China are witnessing a resurgence in economic activity. All these markets are very important destinations for the Indian export basket, including the engineering goods, which are among the largest contributors to the country’s export consignments.

However, the upside was capped on report that India will borrow an additional Rs 500 billion ($7.79 billion) this fiscal year, a higher-than-expected figure that could lead to it breaching its fiscal deficit target for the first time in four years and hit the bond and equities markets. The additional borrowing could raise the fiscal deficit to 3.5% of GDP, against the stated target of 3.2%. Additionally, India’s crude oil import bill will likely swell 15% to $81 billion in the current fiscal year as prices soar amid output cuts led by OPEC and Russia. According to an estimate by the Oil Ministry, the volume of crude import would remain little changed at 213.5 million metric tonnes in 2017-18 but the value would jump to $81billion from $70 billion in the previous year. In rupee terms, the value is estimated to go up to Rs 5.2 lakh crore from Rs 4.7 lakh crore. Meanwhile, ICRA in its report has warned that rising commodity prices, especially that of crude oil that has hit a three-year peak last week, will double Current Account Deficit (CAD) to $39 billion or 1.5 percent of GDP this fiscal year.

On the global front, Asian markets closed mostly in green. Japan’s factories and retailers posted better-than-expected growth in activity in November, while minutes from the central bank’s last policy meeting showed board members raising the prospect of reducing stimulus. Indonesia’s headline inflation rate is expected to have risen slightly in December, the first rise after five months of fallsm, but stayed within the central bank’s target range. The European markets were trading mostly in red, while Britain’s FTSE 100 hovered just under a record high. A survey showed that more than half of Germany’s industry associations have shrugged off worries about US protectionist policies and Brexit, and are more positive about their situation than they were a year ago.

Back home, select banking stocks remained under pressure, as the global rating agency Standard & Poor’s (S&P) on the basis of the economy and industry risk criteria has classified the Indian banking sector under ‘Group 5’ along with countries such as Italy, Spain, Ireland, the UAE and South Africa and has said that Banks’ asset quality is weak and has been deteriorating in the past four years. Select auto stocks were under pressure after the Lok Sabha approved a bill to hike cess on luxury vehicles from 15% to 25% with a view to enhance funds to compensate states for revenue loss following the rollout of GST. The Bill seeks to replace the Ordinance which was issued in September to give effect to the decision of the GST Council.

The BSE Sensex ended at 33829.37, down by 82.44 points or 0.24% after trading in a range of 33752.03 and 34023.65. There were 10 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.08%, while Small cap index gained 0.31%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.08%, Metal up by 2.13%, Basic Materials up by 1.06%, Telecom up by 0.15% and Consumer Durables up by 0.12%, while PSU down by 0.79%, Auto down by 0.52%, Oil & Gas down by 0.40%, Bankex down by 0.37% and Healthcare down by 0.28% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 2.03%, Dr. Reddy’s Lab up by 1.28%, HDFC Bank up by 1.08%, Wipro up by 0.69% and ONGC up by 0.62%. (Provisional)

On the flip side, Hero MotoCorp down by 2.02%, SBI down by 1.97%, Sun Pharma down by 1.77%, Tata Motors - DVR down by 1.37% and Axis Bank down by 1.37% were the top losers. (Provisional)

Meanwhile, raising hopes for export growth in the coming year, Engineering Export Promotion Council (EEPC) India’s, new chairman Ravi P Sehgal has said that the year 2018 is expected to be a good year for exports, as it promises to be full of opportunities and growth for the Indian exporters, on the back of improving global trade.  However, he also expressed need to focus on competitive pricing and technological strength of exports, in order to achieve the expected growth.

EEPC India chairman also stressed the need of being on guard against increasing protectionism in the top economies. Going further, he ensured that his organization along with the commerce ministry will work together on policy issues that may act as barriers to shipments and will also look on exporters' GST refund related issues, seeking cooperation and support from the finance ministry.

He added that we have to ensure that our exporters should not miss out any global opportunity for the sake of cash flow and this is possible only when the GST glitches are removed. Besides, Sehgal said that Indian exporters need to fully exploit robust trade growth of the world in 2018, noting that US, Eurozone, Japan and China markets are very important destinations for the Indian export basket, including the engineering goods.

The CNX Nifty ended at 10466.75, down by 24.00 points or 0.23% after trading in a range of 10465.75 and 10534.55. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 3.80%, UPL up by 3.15%, Tata Steel up by 2.14%, Vedanta up by 2.13% and Dr. Reddy’s Lab up by 1.34%. (Provisional)

On the flip side, Indian Oil Corporation down by 2.64%, SBI down by 2.14%, Hero MotoCorp down by 2.08%, Bajaj Auto down by 1.70% and Eicher Motors down by 1.62% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 19.07 points or 0.15% to 13,050.95, France’s CAC decreased 2.63 points or 0.05% to 5,366.21, while UK’s FTSE 100 increased 1.63 points or 0.02% to 7,622.31.

Asian equity markets ended mostly in green on Thursday in a quiet post-Christmas holiday trading, as strong economic data from the region and in the US boosted confidence. Buying interest was a bit subdued in most of the markets in the region. Almost all the markets in the region started off on a firm note, but failed to sustain at higher levels. Volume of business was thin as investors chose to stay on the sidelines ahead of the weekend and New Year Day holiday. Despite some fairly encouraging economic data, the Japanese market ended lower, with machinery, banking and warehouses stocks registering notable losses. A stronger yen and lack of positive catalysts dragged stock prices down.