Post Session: Quick Review

Indian equity markets traded on a firm note throughout the day and ended near highest point of the day on the last trading day of 2017. The market breadth was in favour of advances with three stocks advancing against every two declining ones. Markets end 2017 on an optimistic note with Sensex and Nifty being the top gainers in Asia after Hong Kong market. The equity benchmarks made positive start in early deals as the sentiments were upbeat after Securities and Exchange Board of India (SEBI) decided to relax entry norms for Foreign Portfolio Investors (FPIs) willing to invest in the Indian markets. Besides, the markets regulator would allow listing of security receipts issued by an asset reconstruction company (ARC) on stock exchange platform. This will enhance capital flows into the securitization industry and particularly be helpful to deal with bank non- performing assets (NPAs). Separately, Union Minister Nitin Gadkari said that the government is working on a policy to bring down the annual oil import bill by $100 billion by 2030 through extensive use of methanol in cooking gas and transportation fuel. The minster added that the government is shortly going to implement a scheme under which 15 per cent methanol will be blended with petrol and which will reduce the cost of the fuel by 10 per cent.

Meanwhile, the street shrugged off the Finance minister Arun Jaitley’s statement that the direct tax collection stood at Rs 6.48 lakh crore up to December 18, which is below the Budget estimates of Rs 9.8 lakh crore. Indirect tax collection (excluding GST collection) was at Rs 3.66 crore and the same including GST collection at Rs 7.3 lakh crore, which is below the Budget estimates of Rs 9.27 lakh crore. Investors also paid no heed to a study by industry chamber ASSOCHAM which highlighted that a slowdown in the economy coupled with high stress level in the banking sector is expected to restrict credit growth at around 8 per cent during the current fiscal despite government’s thrust on loan expansion. Separately, rating agency ICRA 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 per cent of GDP this fiscal year.

On the global front, Asian markets closed mostly in green. Growth in China’s sprawling manufacturing sector likely slowed only slightly in December despite tough pollution measures that have forced some factories to curb production and a cooling housing market. The official manufacturing Purchasing Managers’ Index (PMI) on Sunday is expected to dip marginally to 51.6 for December from an unexpectedly solid 51.8 in November. The European markets were trading in red on the final trading day of the year, but were set to record their strongest year of gains since 2013 thanks to a surge among tech stocks and a robust resources sector.

Back home, select public sector banks were buzzing in today’s trade on report that the government is likely to immediately infuse about Rs 10,000 crore in six state-run lenders, including United Bank of India, Dena Bank and Bank of Maharashtra, over the next few weeks. These six lenders are under stress and immediate infusion is to help them maintain the required regulatory capital. This amount will come from the Indradhanush Plan, where around Rs 18,000 crore is still left.

The BSE Sensex ended at 34055.65, up by 207.62 points or 0.61% after trading in a range of 33889.39 and 34086.05. There were 23 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.78%, while Small cap index was up by 0.65%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 1.75%, Power up by 1.46%, TECK up by 1.27%, Auto up by 1.23% and IT up by 1.21%, while Oil & Gas down by 0.56%, Energy down by 0.42%, Metal down by 0.41% and PSU down by 0.06% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 3.25%, Tata Motors up by 3.25%, Tata Motors - DVR up by 3.16%, TCS up by 2.78% and Hero MotoCorp up by 2.01%. (Provisional)

On the flip side, Dr. Reddy’s Lab down by 0.98%, Reliance Industries down by 0.37%, Bharti Airtel down by 0.33%, Tata Steel down by 0.25% and HDFC Bank down by 0.14% were the top losers. (Provisional)

Meanwhile, offsetting headwinds in exports and intensifying competition, Indian pharmaceutical industry is expected to witness better revenue growth in the near term with healthy cash flows, on the back of robust domestic demand and rising need for complex products in the West. Credit rating agency, Crisil in its latest report has said that the sector would log in a 9% revenue growth over the next three years ending 2020.

The rating agency however, said that the current fiscal year would be critical for the pharma sector overall export, as it will able to grow at rate of 1% only. It also pointed that over half of the exports are to the regulated markets in the West but those are set to de-grow by 5 per cent this fiscal, after growing 3 per cent last fiscal, due to greater price erosion in existing products amid rising competition and delayed launches of new products or import ban on existing products following scrutiny from the USFDA.

However, over the medium term, the ratings agency sees trend reversal with 7% annual growth in revenues of regulated markets and 6% annual growth in overall exports, on the back of faster product approvals from the FDA. As per report, research and development (R&D) spending of the companies are expected to increase 700 basis points over fiscal 2017 to reach 30% of annual revenue from the regulated markets over the medium term and better access to healthcare, higher penetration of health insurance and increasing lifestyle diseases will sustain domestic demand.

The CNX Nifty ended at 10533.50, up by 55.60 points or 0.53% after trading in a range of 10488.65 and 10538.70. There were 33 stocks advancing against 17 stocks declining on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 3.37%, Tata Motors up by 3.30%, Bharti Infratel up by 3.06%, TCS up by 2.68% and Hero MotoCorp up by 2.11%. (Provisional)

On the flip side, GAIL India down by 2.18%, BPCL down by 1.78%, Indian Oil down by 0.99%, Dr. Reddy’s Lab down by 0.80% and Vedanta down by 0.78% were the top losers. (Provisional)

The European markets were trading in red; Germany’s DAX decreased 31.51 points or 0.24% to 12,948.43 and France’s CAC decreased 6.83 points or 0.13% to 5,332.59.

Asian equity markets ended mostly in green on the final trading day of 2017 Friday after Wall Street finished with modest gains. Crude oil and copper prices stayed firm - the former still hovering at 30-month high - but equities never really find any great support in the final week of the year and stock price movements in most of the markets in Asia stayed sluggish. Chinese shares ended higher, capping a strong year of gains as domestic and global investors increased their exposure to mainland markets despite worries about a slowing economy and further regulatory crackdowns. However, Japan’s Nikkei share average ended slightly lower, but the index still gained nearly 20 percent in 2017.