Post Session: Quick Review

Indian equity benchmarks traded on a choppy note throughout the day and ended the session in red. Sensex gave up 34,900 mark but Nifty managed to hold 10,700 mark. Weak rupee and rising bond yields have weighed on indices. The equity benchmarks made a positive start and traded slightly in green in early deals as traders took some support from the report by BMI Research (a unit of Fitch Group) which enlightened that two Asian economies - India and Indonesia - will see a pick-up in GDP growth in 2018, reaping benefits of the economic reforms. In the Indian context, adapting to the new GST regime, economic reforms aiding growth and recapitalization plan for public sector banks will lead to increased investment growth and economic activity over the coming quarters. As per the report, India’s real GDP growth is expected to pick up to 6.7 per cent in 2018-19 (April-March) from 6.4 per cent in 2017-18.

Separately, the International Monetary Fund (IMF) highlighted that India is reclaiming its place as a growth leader in the world, after witnessing the short term slowdown in economic growth. Some relief came with Prime Minister Narendra Modi promising more economic reforms to further improve the ease of doing business in India as he invited Israeli companies to invest here. PM further noted that India is the fastest growing economy with FDI inflows at all time high.

However, markets witnessed selling pressure as the sentiments were dampened after the trade deficit widened to its highest level in over three years in December to $14.9 billion, a three-year peak. Exports climbed at a healthy pace in December but imports rose faster. Exports increased 12.3% to $27 billion last month, while higher gold and crude buys lifted imports by 21.1% to $41.9 billion. Investors took note that GST Council will meet this Thursday, which will also be the last meeting before Budget 2018. The council is likely to revise rates for electric vehicles, farm equipment, ease compliance & modify the reverse charge mechanism. The recommendations of the law review committee are also likely to be taken up for consideration by the GST Council, comprising Centre and states.

Meanwhile, oil marketing companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) closed in red as diesel prices have touched a record high of Rs 61.74 per litre and petrol prices have crossed Rs 71 as international oil rates continue to rally. Petrol price rose to Rs 71.18 per litre in Delhi, the highest since August 2014. Mixed reactions were displayed in jewellery stocks on report that the Commerce Ministry has pitched for reduction in import duty on gold in the forthcoming Budget with an aim to promote gold jewellery exports. The Gems and Jewellery Export Promotion Council (GJEPC) has demanded cut in import duty on gold to 4% from the current 10%.

On the global front, Asian markets closed in green. A private poll showed that China’s economy is expected to cool this year as a government-led crackdown on debt risks and factory pollution drag on overall activity. Beijing is in the second year of a relentless campaign to wean China off its debt-heavy investment model, clamping down on everything from speculative property lending to shadow-bank financing activities as policy makers look to foster sustainable longer term growth. The European markets were trading in green as investors eyed the release of fresh earnings reports. Consumer price inflation (CPI) in the UK pulled back from a five-year high in December.

Back home, Information Technology (IT) related stocks surged in today’s trade as investors reacted to a weaker rupee at the interbank foreign exchange after concerns over trade deficit ballooning to a three-year high.

The BSE Sensex ended at 34811.63, down by 31.88 points or 0.09% after trading in a range of 34735.55 and 34936.03. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.63%, while Small cap index was down by 2.15%. (Provisional)

The only gaining sectoral indices on the BSE were IT up by 3.34% and TECK up by 2.53%, while Realty down by 3.14%, Metal down by 2.72%, Energy down by 2.30%, PSU down by 2.18% and Oil & Gas down by 1.75% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Wipro up by 4.91%, TCS up by 3.99%, Infosys up by 3.90%, ICICI Bank up by 1.43% and Hindustan Unilever up by 1.11%. (Provisional)

On the flip side, Coal India down by 4.70%, Tata Motors down by 2.49%, Reliance Industries down by 2.42%, ITC down by 2.13% and SBI down by 1.97% were the top losers. (Provisional)

Meanwhile, ahead of IMF’s World Economic Outlook 2018, slated to be released next week, highlighting bright outlook of Asia with strong consumption and investment, rising exports, and steady capital inflows, the International Monetary Fund’s (IMF’s) deputy managing director, David Lipton has said that India is reclaiming its place as a growth leader in the world, after witnessing the short term slowdown in economic growth.

Lipton also expressed optimism over the global economic outlook, saying that the cyclical recovery in the global economy is going from strength to strength with signs of faster growth across all regions. However, he expressed need of steps to enable stronger growth and to address growth impeding vulnerabilities and structural issues like rapid appreciation of asset valuations over the past year, unexpected monetary policy and exchange rate developments and geopolitical tensions.

On the investment and trade front, David Lipton said that capital-intensive investment and consumer demand are rising in the world, lifting world trade at a rate well above GDP growth. He further added that other economic factors like unemployment and inflation are also showing decline across the world.

The CNX Nifty ended at 10711.65, down by 29.90 points or 0.28% after trading in a range of 10687.85 and 10762.35. There were 17 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were Wipro up by 5.90%, HCL Tech up by 4.40%, TCS up by 4.15%, Infosys up by 4.06% and Tech Mahindra up by 2.40%. (Provisional)

On the flip side, Coal India down by 4.87%, HPCL down by 3.53%, Reliance Industries down by 2.67%, Bajaj Finance down by 2.66% and Vedanta down by 2.42% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 14.13 points or 0.18% to 7,783.27, Germany’s DAX increased 64.15 points or 0.49% to 13,264.66 and France’s CAC increased 14.75 points or 0.27% to 5,524.44.

Asian equity markets ended in green on Tuesday despite a lack of fresh catalysts as investors looked ahead to more earnings news from the US. Chinese shares rallied, with the blue-chip index closing at a 30-month high, led by a surge in real estate firms, even as a poll backed expectations that growth in the Asian economic powerhouse will slow in 2018. Further, Japanese shares rose to its highest level since late 1991 as the yen's appreciation against the dollar stopped and expectations for strong corporate earnings bolstered investors' sentiments.