Post Session: Quick Review

Indian equity markets traded in negative territory for most part of the day and ended flat as investors await December quarter earnings. The market breadth was in favour of declines with two stocks advancing against three declining ones. The equity benchmarks made a flat-to-positive start and managed to keep their head above water in early deals. Traders were taking some encouragement with the World Bank report projecting India’s growth rate to 7.3% in 2018 and 7.5% for the next two years. It said that with an ambitious government undertaking comprehensive reforms, India has enormous growth potential compared to other emerging economies. The 2018 Global Economics Prospect released by the World Bank also said that India, despite initial setbacks from demonetization and Goods and Services Tax (GST), is estimated to have grown at 6.7% in 2017. Separately, ahead of the start of earnings season, domestic rating agency CRISIL expects India Inc’s revenue growth to hit a five-year high of 9 per cent for the October-December 2017 period, on higher realizations in steel, aluminium, cement and crude oil-linked sectors, and a pick-up in consumption-driven sectors such as auto and aviation. However, profits will continue to contract, primarily due to the rising commodity prices.

However, selling crept in with chief statistician TCA Anant’s statement that lower-than-expected inflation is estimated to pull down nominal GDP growth to 9.5% in FY18, against the budgeted 11-11.5%. He further added that this will impact the final projection of the FY18 fiscal deficit (expressed as a percentage of nominal GDP). Some concerns also came with rating agency ICRA’s latest report stating that credit growth of Infrastructure finance firms will remain subdued over the short term. Investors also remained on sidelines ahead of the outcome of meeting organised by government think tank NITI Aayog, and attended by a host of ministers including Finance Minister Arun Jaitley, NITI Aayog functionaries and leading economists. Benchmarks at the end erased most of their losses and ended near their neutral lines as traders took some relief with the Cabinet approving key changes in India’s Foreign Direct Investment (FDI) policy by easing investment norms across sectors including aviation, construction and single brand retail among others.

On the global front, Asian markets closed mostly in red, amid oil prices touching three-year highs due to production cuts and a fall in inventories. China’s producer prices rose at their slowest pace in 13 months in December, as the government’s war against winter smog dented factory demand for raw materials in a sign the world’s second largest economy has started to slow. The European markets were trading mostly in green ahead of the first earnings season of the year. British industrial output looks set to make a strong contribution to economic growth in the final months of 2017 but construction is likely to drag.

Back home, select stocks in IT counter were buzzing as US authorities said that the Trump administration is not considering any proposal that would force H-1B visa holders to leave the country. The announcement by the US Citizenship and Immigration Services (USCIS) came days after reports emerged that the Trump administration was considering tightening H-1B visa rules that could lead to deportation of 7,50,000 Indians.

The BSE Sensex ended at 34427.25, down by 15.94 points or 0.05% after trading in a range of 34311.63 and 34565.63. There were 9 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.32%, while Small cap index was down by 0.05%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.93%, TECK up by 1.50%, Realty up by 1.11%, Energy up by 0.21% and Telecom up by 0.02%, while Auto down by 0.71%, Consumer Durables down by 0.57%, Utilities down by 0.41%, Consumer Disc down by 0.41% and Capital Goods down by 0.39% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 2.93%, Wipro up by 2.50%, Coal India up by 1.28%, Adani Ports & Special Economic Zone up by 0.98% and Infosys up by 0.46%. (Provisional)

On the flip side, NTPC down by 1.33%, Asian Paints down by 1.25%, Dr. Reddy’s Lab down by 1.24%, SBI down by 1.07% and Tata Motors - DVR down by 1.05% were the top losers. (Provisional)

Meanwhile, giving a thumbs up to India's extraordinary achievements and expanding leadership in a wide range of global initiatives, World Economic Forum's (WEF) Executive chairman Klaus Schwab has said that India presents an image of optimism and promise, even with series of transformational and significant global challenges like deepening income inequality and escalating violence around the world. He added that this optimism is due to the government’s bold and structural reforms which have boosted the macroeconomic fundamentals and enhanced India’s long-term economic outlook.

WEF Chief noted that India’s extraordinary achievements corroborate that the country possesses a robust institutional mechanism for deftly counterbalancing pervasive diversity while projecting a single identity. He further said that India will play a greater role at the global economic front by enriching the global policy debate as well as assisting in designing and developing better policies for a prosperous world and highlighted that India is in transition and will soon become a force to be reckoned with.

Klaus Schwab also said that the country should reap the benefits of its ongoing reforms process and expressed need to address some critical challenges in the country only. He emphasized that time is right for India to amplify its global influence and accelerate the development of robust and resilient economic, social and political foundations.

The CNX Nifty ended at 10625.55, down by 11.45 points or 0.11% after trading in a range of 10592.70 and 10655.50. There were 16 stocks advancing against 34 stocks declining on the index. (Provisional)

The top gainers on Nifty were TCS up by 3.47%, Wipro up by 2.90%, HCL Tech up by 2.14%, Tech Mahindra up by 1.66% and Coal India up by 1.48%. (Provisional)

On the flip side, Eicher Motors down by 1.56%, UPL down by 1.53%, NTPC down by 1.39%, Dr. Reddy’s Lab down by 1.25% and Asian Paints down by 1.19% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 19.42 points or 0.25% to 7,750.44, France’s CAC increased 0.64 points or 0.01% to 5,524.58, while Germany’s DAX decreased 49.03 points or 0.37% to 13,336.56.

Asian equity markets ended mostly in red on Wednesday after bond yields jumped in the US and inflation data from China painted a mixed picture of the economy. The benchmark ten-year US Treasuries rose to a nearly ten-month closing high on Tuesday after the Bank of Japan surprised markets by reducing its purchases of long-dated Japanese bonds. Consumer prices in China rose an annual 1.8 percent in December, the National Bureau of Statistics said. That missed expectations for an increase of 1.9 percent but was up from 1.7 percent in November. The bureau also said that producer prices jumped an annual 4.9 percent, exceeding forecasts for a gain of 4.8 percent but down from 5.8 percent in the previous month. Japanese shares ended in the red as traders locked in some profits after recent strong gains. However, Chinese shares extended their rally and to close at the highest in seven weeks, led by banking and consumer stocks.