Post Session: Quick Review

Indian equity benchmarks traded on a weak note throughout the day and ended with deep cut. However, Nifty recovered over 200 points and Sensex over 800 points from intra-day low. The equity benchmarks made a gap-down opening and witnessed complete bloodbath in early deals amid global selloff. Traders also took note of foreign brokerage report which enlightened that the economy will grow 7.5 percent level in the first half on a lower base, but will slip down to 7 percent in the second half of the next fiscal. The report added that even with the jump, it will continue to trend 1 percentage point lower than the potential growth of the economy. Separately, another brokerage said that the budgeted fiscal deficit is in line with expectations but there are some risks of slippage in financial year 2018-19, unless economic activities formalize at a rapid pace. It estimates a 20 bps upside risk to the fiscal deficit in 2018-19, unless economic activities formalize at a rapid pace over the coming year to generate the necessary buoyancy in revenues. Moreover, higher oil prices could exert additional pressure on the fiscal deficit.

The markets recovered from their day’s low in last hour of trade but failed to end in green. Investors took some relief with CBDT chairman Sushil Chandra’s statement that a large number of taxpayers have been brought into the net taking the total base to 8 crore and underlined that the government has consolidated direct tax reforms.

On the global front, Asian markets closed in red. Japanese Economy Minister Toshimitsu Motegi said that he was monitoring the impact that financial market moves might have on Japan’s economy. Motegi said Japan’s economic fundamentals were solid given an improving labor market and rising wages. The European markets were trading in red as a global sell-off in equities deepened and volatility spiked on growing worries over inflation and rising bond yields.

Back home, banking stock witnessed selling pressure in today’s trade as they are set to bleed more as their biggest money-spinner in recent times - bond profits - may vanish amid surging yields, removing the shield against mounting bad-loan provisions. This could prolong the agony for local banks with focus now shifting to likely losses in treasury incomes from protracted deterioration in asset quality.

The BSE Sensex ended at 34283.94, down by 473.22 points or 1.36% after trading in a range of 33482.81 and 34521.01. There were 4 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.67%, while Small cap index was down by 2.17%. (Provisional)

The top losing sectoral indices on the BSE were Consumer Durables down by 2.77%, IT down by 2.70%, TECK down by 2.38%, Healthcare down by 2.14% and Industrials down by 2.03%, while there were no gainers on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 0.15%, Bharti Airtel up by 0.11%, Tata Steel up by 0.11% and ICICI Bank up by 0.03%. (Provisional)

On the flip side, Tata Motors down by 5.49%, Tata Motors - DVR down by 4.87%, TCS down by 3.16%, Hero MotoCorp down by 2.45% and Kotak Mahindra Bank down by 2.42% were the top losers. (Provisional)

Meanwhile, driven by strong rates of economic and network expansion, India remained the world’s fastest growing domestic aviation market for the third straight year in 2017. According to the global airlines body, International Air Transport Association (IATA), India’s domestic aviation market grew at rate of 17.5 per cent in 2017, beating China’s 13.3 per cent growth.

The report further said that new services like additional airport pairs result into time savings for passengers and have a similar stimulatory impact on demand as cuts in airfares. IATA also pointed Indian carriers’ efforts towards expansion plan along with orders placed for over 900 aircraft by local airlines.

On the global front, the report said that revenue Passenger Kilometres (RPKs) rose by 7.6 per cent in 2017, registering above-trend growth that was ahead of the ten-year average rate of 5.5 per cent. It further added that since late 2014, lower airfares have helped in boosting passenger growth, which in 2017 was also supported by broad-based pick-up in global economic conditions.

However, the global airlines body expects slightly slower growth in 2018 as compared to the growth recorded in 2017, on the back of increases in airline input costs such as hike in fuel prices and labour costs in certain countries. It also said ‘we are unlikely to see the same degree of demand stimulation from lower airfares in 2018 than we have in recent years’.

The CNX Nifty ended at 10520.90, down by 145.65 points or 1.37% after trading in a range of 10276.30 and 10594.15. There were 5 stocks advancing against 45 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Finance up by 3.80%, ICICI Bank up by 0.70%, Tata Steel up by 0.32%, Eicher Motors up by 0.30% and Bharti Airtel up by 0.07%. (Provisional)

On the flip side, Lupin down by 6.86%, Tata Motors down by 5.18%, HCL Tech down by 4.11%, Tech Mahindra down by 3.42% and TCS down by 3.33% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 129.23 points or 1.76% to 7,205.75, Germany’s DAX decreased 222.33 points or 1.75% to 12,465.16 and France’s CAC decreased 70.95 points or 1.34% to 5,214.88.

Asian stocks ended in red on Tuesday after the S&P 500 as well as the Dow Jones Industrial Average suffered their biggest percentage drops since 2011 overnight and erased all of their gains for 2018 on concerns about rising inflation and potentially higher interest rates. Japanese shares ended lower as a surging yen following Monday's record plunge on the Dow Jones Industrial Average in New York hit exporters. Further, Chinese shares tumbled as a global market rout intensified, with the Shanghai index posting its biggest loss in nearly two years on worries that inflationary pressures will prompt central banks to raise rates faster than expected.