Post Session: Quick Review

Indian equity benchmarks traded on a firm note and ended in green with Nifty closing above 10,950 mark. The market breadth was neutral with one stock advancing against every declining one.  Index heavyweight Reliance Industries extends gains to over 4% as Jio reports first ever profit in Q3. The equity benchmarks made an optimistic start and traded in fine fettle in early deals. The sentiments were upbeat after a report enlightened that a greater proportion of provident fund savings could be headed for the stock market with shares rising to successive records in past weeks. Such a move could more than double the provident fund money invested in exchange-traded funds (ETFs) over time. The government is considering a plan to raise the equity investment limit for the Employees’ Provident Fund Organisation (EPFO) to 25% from 15%. Separately, according to a private report, India will overtake China to be the fastest growing large economy in 2018 and the country’s equity market will become the fifth largest in the world. The report added that while the rest of the world offers low growth and insufficient structural change, India, by contrast, is seen as a reforming economy with the prospect of strong long-term growth.

Meanwhile, Prime Minister Narendra Modi has indicated that the upcoming Budget will not be a populist one and it’s a myth that the common man expects ‘freebies and sops’ from the government. He also pledged that his government will stay on the course of the reforms agenda that has pulled out India from being among the ‘fragile five’ economies of the world to being a bright spot. Sentiments also remained up-beat, as traders took some encouragement with report that overseas investors have put in a whopping Rs 87 billion in the Indian capital markets this month so far on expectation of recovery in corporate earnings and attractive yields. This follows an investment of Rs 2 trillion in the capital markets (equity and debt) in the entire 2017. Investors shrugged off private brokerage report that India’s fiscal deficit is expected to increase to 3.5% of GDP in 2018-19 but it will not have any material impact on macro stability risks. As per the report, fiscal deficit target may widen to 3.5% of GDP in 2018-19 from 3.4% in 2017-18.

On the global front, Asian markets closed mostly in green. China is confident that its economy will maintain steady and good momentum in 2018 after the world’s second-largest economy reported better-than-expected fourth-quarter growth. Confidence among Japanese manufacturers jumped in January to an 11-year high, highlighting corporate optimism driven by nearly two years of uninterrupted economic expansion and a buoyant stock market. The European markets were trading mostly in red. Germany’s Social Democrats voted to enter coalition talks with Chancellor Angela Merkel’s government, helping end months of political uncertainty in Europe’s largest economy. In another development, French President Emmanuel Macron said it would be possible for Britain to secure a bespoke trade deal if the UK accepts certain ‘preconditions’.

Back home, public sector banking stocks were under pressure in today’s trade. The ASSOCHAM-CRISIL report enlightened that India’s banking sector will be saddled with gross non-performing assets (GNPAs) worth a staggering Rs 9.5 lakh crore by March-end, up from Rs 8 lakh crore in the year-ago period. The report added that GNPAs will increase to Rs 9.5 lakh crore as on March 31, 2018 i.e. about 10.5 per cent of total advances, while stressed assets are expected to be at Rs 11.5 lakh crore.

The BSE Sensex ended at 35794.27, up by 282.69 points or 0.80% after trading in a range of 35544.68 and 35827.70. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.70%, while Small cap index was up by 0.76%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 2.36%, IT up by 2.06%, Realty up by 1.93%, Capital Goods up by 1.79% and TECK up by 1.40%, while Telecom down by 1.58%, Metal down by 0.69%, Utilities down by 0.67% and PSU down by 0.21% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 5.01%, Reliance Industries up by 4.38%, Axis Bank up by 3.38%, ONGC up by 3.07% and Bajaj Auto up by 2.20%. (Provisional)

On the flip side, Tata Motors - DVR down by 2.17%, Wipro down by 1.84%, HDFC down by 1.62%, Bharti Airtel down by 1.60% and Asian Paints down by 1.46% were the top losers. (Provisional)

Meanwhile, highlighting benefit of digital infrastructure to achieve the goal of trebling Gross domestic product (GDP) to $7.5 trillion over the next five years, Telecom Secretary Aruna Sundararajan has said that India needs three-fold increase in digital infra over next five years and noted that the country can emerge as a digital leader at the global level.

Telecom Secretary stated that the government will play a facilitating role for making this happen so that the private sector takes the lead in investing. She also listed the government’s efforts on both data protection as well as data security, adding that its department is currently finalising the new telecom policy which will come out in this year. Apart from digital infra, she has also expressed need to adopt a liberal approach, embrace open source and an open culture like the information technology sector have done.

Sundararajan mentioned that government is aggressively working towards introducing the fifth generation telecom networks and the reliance on cloud will make open-source very critical. Telecom Secretary also appreciated the new entrant -Reliance Jio for its aggressive play with setting new benchmarks on the aspirations front. She said Jio has seized the opportunity available by creating appropriate products and services, and also created thousands of jobs.

The CNX Nifty ended at 10958.25, up by 63.55 points or 0.58% after trading in a range of 10881.40 and 10975.10. There were 28 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing up by 4.62%, TCS up by 4.42%, Reliance Industries up by 4.16%, ONGC up by 3.77% and Axis Bank up by 3.57%. (Provisional)

On the flip side, HPCL down by 3.32%, GAIL India down by 2.42%, Wipro down by 2.05%, HDFC down by 1.84% and BPCL down by 1.63% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 10.72 points or 0.08% to 13,423.73, France’s CAC decreased 6.77 points or 0.12% to 5,519.74 and UK’s FTSE 100 increased 5.38 points or 0.07% to 7,736.17.

Asian equity markets ended mostly in green on Monday after global investors shrugged off the latest US government shutdown. Investors waited for progress in talks to end the US government shut down that began at midnight on Friday after the Senate failed to reach agreement over a short-term funding bill. Investors also kept an eye on political developments in Europe after Germany's Social Democrats voted to enter coalition talks with Chancellor Angela Merkel's government and French President Emmanuel Macron said it would be possible for Britain to secure a bespoke trade deal if the UK accepts certain ‘preconditions’. Chinese shares ended higher, helped by gains in defensive and technology stocks. Meanwhile, Japanese stocks closed little changed as safe-haven assets such as gold and yen edged higher following the US government shutdown.