Post Session: Quick Review

Indian equity benchmarks traded jubilantly throughout the day and ended on a positive note with Nifty ending shy of 10,800 mark, while Sensex closing above 35,000 mark for the first time ahead of corporate earnings and Union Budget. The equity benchmarks made a positive start and traded in fine fettle in early deals as the sentiments were upbeat after rating agency CRISIL enlightened that India will benefit from stronger global growth in the fiscal 2019 provided there are no more after effects from the implementation of the new Goods and Services Tax (GST) and the economy manages to tide over the asymmetry in monetary policy of advance economies together with higher crude oil prices. Separately, a private report stated that Business optimism index for the January-March quarter 2018 touched three and half year high on improving demand conditions and expectation that government sops in the budget will revive consumption. It further added that the upcoming Union Budget and assembly elections during 2018 might have generated optimism about government sops that could push revival in consumption. Some support also came with report that agricultural exports from India grew 18 per cent to $21 billion in the April-October 2017-18 period compared to just 5 per cent in 2016-17.

Meanwhile, Commerce and Industries Minister Suresh Prabhu said that India is expected to become a $5 trillion economy in the next 8-9 years with the manufacturing sector contributing 20 per cent to that. Prabhu said as commerce and industries minister, he is working on a strategy for international trade which will contribute $2 trillion to the economy where contribution can come from both manufacturing and services. Banking sectors were buzzing in today’s trade after government lowered the additional borrowing requirement for the current fiscal to Rs 20,000 crore from Rs 50,000 crore estimated earlier. The reduced borrowing would help contain fiscal deficit within the target. The government in the 2017-18 budget had estimated borrowings at Rs 43,000 crore through dated securities in current fiscal.

On the global front, Asian markets closed mixed. Japanese orders for machinery surged to their highest level in a decade in November, in a sign business may finally be responding to policymakers’ efforts to get companies to spend their massive cash piles to spur economic growth. The European markets were trading in red as investors were eyeing fresh batch of corporate earnings reports. Euro zone inflation eased in line with expectations in December. The European Union’s statistics office said the consumer price index rose at an annual rate of 1.4% in December, from 1.5% in November.

Back home, realty sector stocks were buzzing in today’s trade as the GST Council is expected to consider a reduction in tax rates for some items. The Council is likely to discuss inclusion of real estate under GST and announce the rollout date for the same.

The BSE Sensex ended at 35100.60, up by 329.55 points or 0.95% after trading in a range of 34700.82 and 35118.61. There were 22 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.73%, while Small cap index was up by 0.46%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 1.68%, PSU up by 1.61%, Bankex up by 1.54%, IT up by 1.23% and Healthcare up by 1.22%, while there were no losers on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 5.15%, SBI up by 3.71%, ICICI Bank up by 2.78%, Yes Bank up by 2.67% and Adani Ports & Special Economic Zone up by 2.59%. (Provisional)

On the flip side, Wipro down by 2.08%, Hindustan Unilever down by 1.04%, ONGC down by 0.74%, HDFC Bank down by 0.59% and Hero MotoCorp down by 0.58% were the top losers. (Provisional)

Meanwhile, coming out of the hiccups of demonetization and Goods and Services Tax (GST) regime, India is expected to benefit from stronger global growth in the next fiscal year.  Credit rating agency, Crisil in its latest report ‘Riders to the ride’ has said that those headwinds are now past and in fiscal 2019, the weak-base effect of this fiscal and fast global growth may lift Indian economy.

As per the report, though the country could not join the global rally in 2017 due to note ban and GST, global growth momentum and continuing efforts to address GST-led disruptions are expected to improve trade prospects for India in 2018 and its labour-intensive sectors which were most hit by the disruption.

It pointed that India's export led sectors like leather, textiles and gems and jewellery which were already reeling from the demonetisation were hit further after GST which was implemented in July and said that India's export growth during April-October 2017 at 9.5% appears sedate compared with Vietnam's 23.8%, South Korea's 18.4%, and Indonesia's 17.8%, but it added that as global growth momentum is expected to continue in 2018 it means India's exports may have a chance for a comeback provided there are no further domestic disruptions.

However, the rating agency noted that risks like lingering impact of domestic disruptions, asymmetry in monetary policies of advanced economies and spike in crude prices may restrict the country to join global growth party in 2018 too. Crisil further noted that divergent monetary policies and the consequent widening of the interest rate differential between the US and Europe will mean capital flowing into the US and further strengthening of the dollar and this will also impact capital flows into India, particularly foreign portfolio investments in bonds. The report also said that rising crude oil prices will widen the country's current account deficit and make it difficult for the government to raise taxes.

The CNX Nifty ended at 10793.50, up by 93.05 points or 0.87% after trading in a range of 10666.75 and 10803.00. There were 38 stocks advancing against 12 stocks declining on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 4.32%, SBI up by 4.00%, ICICI Bank up by 2.77%, Aurobindo Pharma up by 2.48% and Adani Ports & Special Economic Zone up by 2.28%. (Provisional)

On the flip side, Zee Entertainment down by 3.41%, Wipro down by 1.81%, ONGC down by 0.96%, Mahindra & Mahindra down by 0.68% and Tech Mahindra down by 0.65% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 18.84 points or 0.24% to 7,737.09, Germany’s DAX decreased 18.67 points or 0.14% to 13,227.66 and France’s CAC decreased 11.37 points or 0.21% to 5,502.45.

Asian equity markets made a mixed closing on Wednesday as lower commodity prices and weak overnight cues from Wall Street on concerns over the possibility of a US government shutdown overshadowed upbeat regional economic data. A widespread sell-off in digital currencies on fears of impending crackdowns, apprehensions surrounding coalition talks in Germany and speculation that the European Central Bank (ECB) policymakers are preparing to reduce their vast monetary stimulus program also kept investors on their toes. Japanese shares lost ground as a firmer yen weighed on exporters and bitcoin-related stocks succumbed to selling pressure on fears of a regulatory crackdown. Though, Chinese shares closed slightly higher ahead of fourth-quarter GDP, December industrial production and retail sales data due Thursday.