Post Session: Quick Review

Indian equity benchmarks traded in red for most part of the day and ended with modest cut. PSU banking stocks slipped the most post government’s move on recapitalization. The market breadth was in favour of decline with one stock advancing against every two declining ones. The equity benchmarks made a cautious start and traded with marginal losses in early deals. Investors took note that a day after PM spoke about Climate Change at Davos, a biennial report by Yale and Columbia Universities has ranked India among the bottom five countries on the Environmental Performance Index 2018, plummeting 36 points from 141 in 2016. The street took note that petrol and diesel prices have touched new highs in Delhi NCR and other metros on Wednesday. Petrol was sold at Rs 72.43 per litre in Delhi, the highest in three years. In Kolkata, Mumbai and Chennai, petrol was sold at Rs 75.13, Rs 80.30 and Rs 75.12 per litre respectively, also at over three-year high levels. Oil prices have hit their highest since December, 2014, pushed up after US crude inventories posted a 10th straight week of declines and as the dollar continued to weaken.

The street shrugged off private report which enlightened that waning effects from the Goods and Services Tax (GST) impact will help push the Indian GDP growth to 7% in FY19. The report added that the growth has slid from previous year’s 7.1% to 6.5% in FY18 due to the implementation of the GST. But as some of the short-run disruptions caused by GST got ironed out, the firm expects growth to rise in the next couple of years. Separately, the Department of Industrial Policy and Promotion (DIPP) notified easing of FDI rules for several sectors, including single brand retail, non-banking financial companies and construction. On January 10, in big bang reforms ahead of the BJP government’s last full Budget, the Union Cabinet had allowed 100% Foreign Direct Investment (FDI) in single brand retail and construction development under the automatic route.

On the global front, Asian markets closed mostly in red. South Korea’s economy unexpectedly shrank in the last quarter as struggling car exporters and industrial production failed to keep up the previous quarter’s dashing pace, posting its worst performance since 2008. The European markets were trading mostly in green amid investors waiting to see how the European Central Bank would react to a fast-rising euro. German business confidence rose unexpectedly in January, a survey showed, suggesting that Europe’s biggest continued to fire on all cylinders at the beginning of 2018.

Back home, public sector banking stocks closed in red after Fitch Ratings highlighted that the government’s Rs 88,139-crore capital infusion in struggling public sector banks (PSBs) should help in part to mitigate risks, but resolution of bad assets and continued high credit costs hinder the sector’s near-term performance. Select domestic pharma companies were under pressure on ICRA report that domestic pharma companies are expected to face pricing pressure by 10-12 per cent on US generic business which may sustain for the next 12 months. This could negatively impact profitability and cash flows before tapering off gradually.

The BSE Sensex ended at 36030.82, down by 130.82 points or 0.36% after trading in a range of 35910.30 and 36247.02. 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 0.81%, while Small cap index was down by 0.71%. (Provisional)

The only gaining sectoral indices on the BSE were Metal up by 0.81% and Capital Goods up by 0.47%, while PSU down by 1.99%, Realty down by 1.58%, Power down by 1.38%, Auto down by 1.20% and IT down by 1.18% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.42%, Larsen & Toubro up by 1.25%, ICICI Bank up by 1.21%, Coal India up by 1.19% and Axis Bank up by 1.06%. (Provisional)

On the flip side, SBI down by 5.16%, Dr. Reddy’s Lab down by 2.63%, Adani Ports & Special Economic Zone down by 2.54%, Hero MotoCorp down by 1.80% and ONGC down by 1.52% were the top losers. (Provisional)

Meanwhile, in order to ensure fair trading practises and creating a level-playing field for domestic producers, the government is likely to impose anti-dumping duty on imports of coated paper from China, European Union & USA, as the anti-dumping investigation is already in the process on this product.

The Directorate General of Antidumping and Allied Duties (DGAD) which administers the anti-dumping and countervailing measures in India, has initiated an investigation into the alleged dumping and consequent injury to the domestic industry, after Indian Paper Manufacturers Association on behalf of BILT Graphics Paper Products, subsidiary of Ballarpur Industries, has filed an application for initiation of anti-dumping investigation.

If it found that dumping has caused material injury to domestic players, then the DGAD would recommend imposition of anti-dumping duty on the imports of coated paper which is primarily used for printing of magazines, catalogues, books and manuals, calendars, brochures, labels and flexible packaging. The period of investigation for the present investigation is from April 2016 to June 2017 (15 months).

The CNX Nifty ended at 11064.55, down by 21.45 points or 0.19% after trading in a range of 11009.20 and 11095.60. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing up by 2.72%, ICICI Bank up by 1.87%, Ultratech Cement up by 1.80%, Vedanta up by 1.62% and Coal India up by 1.34%. (Provisional)

On the flip side, UPL down by 6.82%, SBI down by 5.43%, Adani Ports & Special Economic Zone down by 2.84%, Aurobindo Pharma down by 2.82% and Dr. Reddy’s Lab down by 2.28% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 10.44 points or 0.14% to 7,653.87, France’s CAC increased 16.84 points or 0.31% to 5,512.00, while Germany’s DAX decreased 20.89 points or 0.16% to 13,393.85.

Asian equity markets ended mostly in red on Thursday on renewed worries over Donald Trump's America First policies and other protectionist measures like tax cuts. Comments by US Treasury Secretary Steven Mnuchin that he welcomed a weaker currency also added to investors’ worries over the Trump administration's protectionist stance. Chinese shares fell from two-year highs as investors booked some profits after recent strong gains. Further, Japanese shares ended to their lowest level in nearly two weeks as the yen hit a four-month high after the US treasury secretary hailed a ‘weak dollar’ at the World Economic Forum in Davos. Though, Oil and mining stocks outperformed after oil prices hit their highest since December 2014, pushed up after US crude inventories posted a 10th straight week of declines and as the dollar continued to weaken.