Post Session: Quick Review

Indian equity benchmarks traded on firm note and ended with modest gains while Midcap index posted one day biggest fall in four months.  Benchmark indices in last hour of trade erased some gains but closed at record highs as Bulls retained control over Dalal Street. The market breadth was in favour of decline with one stock advancing against five declining ones. The equity benchmarks made a positive start and traded in fine fettle in early deals as sentiments remained up-beat with report that Direct Tax collections during the first nine-and-a-half months of the current fiscal have risen by 18.7% to Rs 6.89 lakh crore. CBDT highlighted that the collections till January 15, 2018 represent over 70% of the Rs 9.8 lakh crore revenue target from direct taxes. Separately, the Confederation of Indian Industry (CII) ahead of the GST Council meeting has called for inclusion of Petroleum and Natural Gas under GST at the earliest. Till such time as this is done, C Forms should be continued to avoid high tax incidence on these products.

Meanwhile, private sector banking stocks were buzzing in today’s trade on report that India’s banking landscape could undergo a massive overhaul. There were reports that the government is considering a proposal to allow 100% Foreign Direct Investment (FDI) in private banks. Separately, as per data compiled by the Reserve Bank of India, bank loan rose 11.1% to Rs 82 lakh crore. Of the Rs 8.2 lakh loan in the year, banks lent 13.3% or Rs 1.09 lakh crore worth of loans in the latest fortnight. Some gains were erased after the World Economic Forum (WEF) said in its annual Global Risks Report that the world will see risks related to environment, economy and international relations intensify this year with a majority of stakeholders expecting political or economic confrontations between major powers to worsen.

Investors were eyeing the GST Council meet scheduled for the day which will consider a host of proposals to simplify procedure for filing of returns, registration of large entities and take stock of the GSTN’s readiness for e-way bill rollout from February 1. The GST Council is expected to consider a reduction in tax rates for some items, about 80 going by some reports, and the inclusion of real estate in its 24th meeting. Separately, the government is expected to sharply increase its asset-sale target for the next financial year with about 36 companies lined up for strategic disinvestment. The government has raised a record Rs 54,337.60 crore so far this year against its FY18 target of Rs 72,500 crore, of which Rs 15,000 crore is through strategic sales.

On the global front, Asian markets closed mixed. A majority of economists polled believe that Bank of Japan will keep its long-term interest rate target unchanged this year, though 40 percent expect a hike, reflecting the mounting speculation as Japan’s economy continues to strengthen. The European markets were trading mostly in green, taking their lead from Wall Street and following dovish comments by European Central Bank policymaker Ewald Nowotny who said that he did not rule out that monetary policy would still continue to be very accommodating for a long time.

Back home, aviation stocks closed in red amid CRISIL’s Research report stating that rising crude, congestion are likely to cap domestic airline passenger traffic growth. The rating agency noted that domestic passenger traffic to grow 17-19% in fiscal 2018 compared with 22% in fiscal 2017, on account of rise in fares and airport congestion. In fiscal 2019, rating agency expects growth to moderate further to 15-17%, as fares are expected to feel the heat of higher crude oil prices.

The BSE Sensex ended at 35265.72, up by 183.90 points or 0.52% after trading in a range of 35166.44 and 35507.36. There were 16 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.71%, while Small cap index was down by 2.02%. (Provisional)

The few gaining sectoral indices on the BSE were FMCG up by 0.80%, Bankex up by 0.58% and IT up by 0.26%, while Realty down by 4.20%, Metal down by 2.93%, Telecom down by 2.63%, Basic Materials down by 2.14% and Utilities down by 1.95% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 2.75%, HDFC Bank up by 2.03%, Mahindra & Mahindra up by 1.96%, Kotak Mahindra Bank up by 1.92% and HDFC up by 1.89%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 4.28%, Tata Steel down by 2.93%, Coal India down by 2.51%, SBI down by 1.49% and Sun Pharma down by 1.17% were the top losers. (Provisional)

Meanwhile, the government’s wide-ranging economic reforms including vision of Digital India are expected to make the country a $5 trillion economy in the future. Commerce and Industries Minister Suresh Prabhu has expressed optimism that Indian economy is likely to grow to $5 trillion over the next eight to nine years, backed by government’s focus on bridging digital divide which is also helping people scale up their income.

Commerce Minister further elaborated that $1 trillion of the turnover of $5 trillion will come from the manufacturing sector and in view of this, the department is working on the plans to promote manufacturing in all sectors. He also said that if manufacturing gets digitized, it will create huge opportunity for technology firms. He also highlighting contribution of services sector in the country’s overall income and said 60% of the $5-trillion will come from services which includes various services not being even thought of at present, like home care services.

Besides these two sectors, Commerce Minister also mentioned another important sector farming, as a major revenue contributor and expressed need of transformation to this sector. On International trade front, Prabhu said that they are also working on a strategy for international trade which will contribute $2 trillion to the economy where contribution can come from both manufacturing and services and further noted that it will be driving factor for the GDP growth.

The CNX Nifty ended at 10823.50, up by 34.95 points or 0.32% after trading in a range of 10782.40 and 10887.50. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were ITC up by 2.99%, Indiabulls Housing up by 2.54%, HDFC Bank up by 2.25%, UPL up by 2.24% and HDFC up by 2.03%. (Provisional)

On the flip side, Bharti Infratel down by 6.00%, Hindalco down by 3.52%, Adani Ports & Special Economic Zone down by 3.23%, Tata Steel down by 3.06% and Vedanta down by 2.99% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 48.85 points or 0.37% to 13,232.81, France’s CAC increased 8.6 points or 0.16% to 5,502.59 and UK’s FTSE 100 decreased 21.46 points or 0.28% to 7,703.97.

Asian equity markets made a mixed closing on Thursday as investors awaited Chinese GDP data for direction. Chinese shares ended higher after data showed that China's property market remained largely stable in December despite tough purchase restrictions. Data released a while before revealed that the Chinese economy grew an annual 6.9 percent in 2017, up from 6.7 percent in 2016 and marking the first expansion in seven years. Industrial output accelerated slightly in December, while retail sales slowed and fixed-asset investment remained unchanged, separate reports showed. Meanwhile, Japanese shares ended lower after a report showed Japan's industrial production increased less than initially estimated in November.