Post Session: Quick Review

Indian equity markets traded on a firm note throughout the day and ended with gain of more than half a percent, with Sensex, Nifty and Nifty Midcap index ending at record closing high. The market breadth was in favour of advances with three stocks advancing against two declining ones. The markets end at fresh record closing high for the second consecutive day in a row thanks to strong global cues and consistent buying by domestic and foreign investors. Foreign institutional investors (FIIs) which have remained net sellers in the cash segment have turned net buyers of Indian equities so far in the month of January. According to SEBI’s provisional data, FIIs have poured in a little over Rs 1,000 crore so far into Indian equity markets. One of the major factors which are fueling a rally on D-Street is earnings optimism. Most experts are penciling in a double digit return for Nifty in the Q3.

The equity benchmarks hit all time high levels surpassing their crucial 34,300 (Sensex) and 10,600 (Nifty) levels in early deals. Sentiments remained up-beat after RBI data enlightened that credit growth after a long gap grew in double digits to 10.65% at Rs 80,96,727 crore in the fortnight ended December 22, 2017 due to the base effect. The advances had stood at Rs 73,17,391 crore in the fortnight ended December 23, 2016. Investors took support with Economic Advisory Council to the Prime Minister (EAC-PM), Bibek Debroy’s statement that India's advance GDP growth estimate of 6.5 percent for this fiscal shows reform measures taken by the government is yielding results and growth will accelerate to over 7 per cent in 2018-19. Separately, the agriculture ministry said that the country’s agriculture sector is expected to grow higher than projected 2.1% growth by the Central Statistics Office (CSO) for the current fiscal, following better rabi crop prospects. The ministry added that the agriculture sector can, therefore, be expected to register a much higher GVA for the year 2017-18, when final estimate figures are released. 

The street shrugged off the CSO’s first advance estimates of Gross Domestic Product (GDP) growth for current financial year which highlighted that the Indian economy is expected to grow at a slower 6.5% in 2017-18 compared to the 7.1% in 2016-17. According to CSO, the GDP at constant (2011-12) prices for 2017-18 is likely to attain a level of Rs 129.85 lakh crore. Traders also paid no heed to a report which highlighted that India’s per capita income, a gauge for measuring living standard, is likely to witness a slower growth of 8.3% at Rs 1,11,782 in FY 2017-18. In 2016-17, per capita income of Indians had grown by 9.7% to Rs 1,03,219.

On the global front, Asian markets closed in green, after Wall Street boasted its best start to a year in over a decade. China’s foreign exchange reserves rose to their highest in more than a year in December, blowing past estimates, as tight regulations and a strong yuan continued to discourage capital outflows. The European markets were trading in green. Retail sales in the euro zone rose more than expected in November. In a report, Eurostat said that euro zone retail sales rose to 1.5% in November from a negative 1.1% in the preceding month.

Back home, telecom stocks Bharti Airtel, Idea Cellular and Reliance Communications closed in red after Reliance Jio Infocomm (Jio) unleashed another price disruption in an heavily debt-riddled industry, wherein all existing tariff plans with 1GB data have been revised to offer either 50% more data or a Rs 50 discount, a move which could hit the average revenue per user of rivals such as Bharti Airtel, Vodafone India and Idea Cellular.

The BSE Sensex ended at 34339.11, up by 185.26 points or 0.54% after trading in a range of 34216.33 and 34385.67. There were 21 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.93%, while Small cap index was up by 0.91%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.35%, Healthcare up by 1.10%, Capital Goods up by 1.07%, FMCG up by 0.82% and Energy up by 0.80%, while Telecom down by 2.67% was the sole losing index on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 2.24%, Infosys up by 2.15%, Sun Pharma up by 1.82%, Larsen & Toubro up by 1.56% and Hero MotoCorp up by 1.22%. (Provisional)

On the flip side, Bharti Airtel down by 4.68%, Adani Ports & Special Economic Zone down by 0.47%, ONGC down by 0.35%, Yes Bank down by 0.18% and SBI down by 0.16% were the top losers. (Provisional)

Meanwhile, expressing his views on the advance GDP growth estimate of 6.5 % for the current fiscal year by the Central Statistics Office (CSO), the Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) Bibek Debroy has said that the estimated figures are mirroring the success of reform measures undertaken by the Government in the terms of yield, as 6.5% for the full year means that Q3 and Q4 numbers will be far better than first half of the year.

Debroy expects GDP growth to be higher than 6.5% in Q3 and to reach close to 7% in Q4 and further noted the growth will be more than 7% in the next fiscal year, on the back of the government’s reform measures. He also expects pick-up in growth in private investments and exports. However, Debroy said that the indirect tax collections will be the main driver to lead economic growth, adding that the several indicators like PMI and eight core sector industries have already shown signs of improvement.

The EAC-PM Chairman further said that the advance estimate numbers only reinforce what was already known, that several measures undertaken by the Government will place the economy firmly on an upward growth trajectory, without compromising on fiscal consolidation.

The CNX Nifty ended at 10617.85, up by 59.00 points or 0.56% after trading in a range of 10588.55 and 10631.20. There were 36 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Lupin up by 2.52%, Coal India up by 2.44%, Indiabulls Housing up by 2.21%, Sun Pharma up by 2.20% and Infosys up by 2.15%. (Provisional)

On the flip side, Bharti Airtel down by 4.44%, ONGC down by 0.60%, Asian Paints down by 0.27%, Adani Ports & Special Economic Zone down by 0.27% and Tata Steel down by 0.25% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 2.42 points or 0.03% to 7,726.64, Germany’s DAX increased 46.01 points or 0.35% to 13,365.65 and France’s CAC increased 18.09 points or 0.33% to 5,488.84.

Asian equity markets ended in green on Monday even as trading volumes remained thin amid the ‘Coming of Age’ holiday in Japan. Global growth optimism underpinned sentiments as investors looked ahead to a slew of regional earnings later this week for directional cues. The dollar held steady above a recent 3-1/2-month low against a basket of currencies after US job growth fell well short of estimates in December, but a pick-up in monthly wage gains pointed to labor market strength, paving the way for more rate hikes in 2018. Chinese shares extended gains for the seventh straight session after the city of Lanzhou eased property curbs.