Post Session: Quick Review

Erasing initial losses, Indian equity benchmarks ended the day in green territory at record closing high with Sensex and Nifty surpassing 34,500 and 10,650 marks. The market breadth was mildly in favour of advances with one stock advancing against each declining one. The equity benchmarks made a cautious start and traded on choppy note in early deals tracking sluggish global cues. Traders remained on sidelines ahead of the official start of the third quarter earnings season. Sentiments were downbeat with rating agency Care Ratings’ latest report that uptrend in crude oil price is likely to have a major impact on India's fiscal position. It further noted that higher prices of crude oil will increase the trade deficit and put pressure on the rupee. Traders also took note of a report which highlights that the Confederation of All India Traders’ (CAIT) has opposed Centre’s decision to allow 100% FDI in single brand retail via automatic route. CAIT has said that it is serious matter for small businesses and will hamper the welfare, upgradation and modernisation of existing retail trade. Besides, a private poll showed that India’s retail inflation likely rose to a 17-month high in December, and that could push the central bank to tighten monetary policy. The December inflation data is due to be released on Friday, January 12.  

However, buying crept in after credit ratings agency, Crisil Ratings in its latest report said that India Inc’s top-line (revenue) growth is likely to hit a five-year high of 9 percent in Q3 (October-December) 2017-18. However, it noted that profits will continue to contract, on the back of rising commodity prices. Besides, it said that the aggregate revenue of companies in key sectors is also expected to grow 9 percent over same period last year on higher realisations in steel, aluminium, cement and crude oil-linked sectors, and a pick-up in consumption-driven sectors such as auto and aviation. Some support also came with Moody's latest report stating India and China remain the fastest growth economies in Asia Pacific region. The global rating agency had upgraded India to Baa2stable in mid November. In a report released on Wednesday, it said a favourable growth environment underpins its stable outlook for sovereign creditworthiness in Asia Pacific over 12-18 months, although high leverage remains a key credit constraint.

Meanwhile, agri related stocks remained in focus, as the economists during an interactive session with Prime Minister Narendra Modi, organised by NITI Aayog suggested need to shift focus to increasing farmers’ income rather than increasing just production. Select real estate stocks were buzzing in today’s trade on private report that residential real estate market is slowly coming out of the shadow of demonetization woes as housing sales across top eight property markets for the quarter ended December have risen 28% from a year ago to 51,701 apartments. While this is an uptick compared to a lower base recorded during the demonetization quarter, the performance was also helped by the implementation of RERA and effective 10-15% price correction across key markets.

On the global front, Asian markets closed mostly in red. China’s Premier Li Keqiang said the economy is expected to have grown around 6.9 percent last year, accelerating from a 26-year low the year before. Li added that in the past year, China’s economy has maintained a steady and favorable trend, with the overall situation better than expected. The European markets were trading in red as concerns over protectionism and a bond market sell-off made the breakneck New Year rally in equities fizzle out. 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, IndusInd Bank closed in red as the private sector lenders asset quality weakened a bit sequentially. The bank has reported nearly 25 percent growth in profit at Rs 936.2 crore for quarter ended December 2017 YoY, which was largely in line with estimates. Bajaj Corp touched 52-week high despite the company reporting marginal decline in its Q3 profit. The company’s Q3 (Oct-Dec) net profit was down 4.5 percent at Rs 55.2 crore against Rs 57.8 crore, in the same period last year.

The BSE Sensex ended at 34523.53, up by 90.46 points or 0.26% after trading in a range of 34400.61 and 34558.88. There were 18 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.29%, while Small cap index was up by 0.40%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.00%, IT up by 0.90%, TECK up by 0.81%, Telecom up by 0.68% and FMCG up by 0.39%, while Consumer Durables down by 0.42%, Oil & Gas down by 0.37%, Energy down by 0.25%, Capital Goods down by 0.20% and PSU down by 0.14% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 2.31%, Kotak Mahindra Bank up by 1.75%, Bharti Airtel up by 1.62%, Hindustan Unilever up by 1.20% and HDFC up by 1.07%. (Provisional)

On the flip side, IndusInd Bank down by 2.00%, Wipro down by 1.36%, ICICI Bank down by 0.80%, Hero MotoCorp down by 0.68% and Axis Bank down by 0.66% were the top losers. (Provisional)

Meanwhile, credit rating agency, ICRA in its latest report has said that Indian tyre industry revenues is likely to grow by 8% during the current financial year (FY18), on the back of favorable demand prospects along with price hikes between January-May 2017.

As per the report, the industry is expected to witness growth in volumes as well at the rate of 8% to record 1,805 lakh tyres during FY18, despite the weak volumes in Q1 and part of Q2 during GST roll-out. In the terms of tonnage, tyre demand is estimated to grow by 7% during the current financial year, on the back of increased T&B replacement demand. The rating agency also pegged growth rate of 8.5% and 7% to the unit and tonnage, respectively for the next fiscal year.

Besides, ICRA estimated that the tyre industry will grow at the rate of 10% during FY18-22 and during the same period, the industry will fund their heavy capex with the help of past three years’ significant accruals. It further noted that the industry will continue adding capacity over next five years, owing to the large cash balances, strong accrual position and favourable demand. As per report, capex investments are likely to continue with planned Rs 25,000 crore of investments spread across the next five years.

The CNX Nifty ended at 10654.35, up by 22.15 points or 0.21% after trading in a range of 10612.35 and 10664.60. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Infosys up by 2.28%, Indiabulls Housing up by 2.06%, Kotak Mahindra Bank up by 1.79%, Tech Mahindra up by 1.79% and Bharti Airtel up by 1.70%. (Provisional)

On the flip side, IndusInd Bank down by 1.95%, Wipro down by 1.81%, Ambuja Cement down by 1.61%, Cipla down by 1.23% and Bajaj Finance down by 1.10% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 3.42 points or 0.04% to 7,745.09, Germany’s DAX decreased 13.75 points or 0.10% to 13,267.59, while France’s CAC increased 3.20 points or 0.06% to 5,507.88. 

Asian equity markets ended mostly in red on Thursday after Wall Street experienced its first loss-making session this year overnight, hit by reports that China may slow or halt purchases of US Treasuries and that President Donald Trump may pull the US out of the North American Free Trade Agreement. Chinese Premier Li Keqiang reportedly said the economy expanded around 6.9 percent in 2017. The economic situation is ‘better than expected’, Li said in a forum in Cambodia. The National Bureau of Statistics is scheduled to issue annual GDP data on January 18. Japanese shares ended lower, hit by declines in automakers and electronic component makers as the strong yen soured investors’ appetite. Meanwhile, China stocks were little changed, with the benchmark index up for a 10th successive session even as investors took profit in consumer and energy firms after a recent robust rally.