Post Session: Quick Review

Indian equity benchmarks altered between green and red territory and ended with cut of around four tenth of a percent. Markets ended near day’s low. The market breadth was in favour of advances with three stocks advancing against each declining one. The equity benchmarks made an optimistic start as traders were drawing some support from the report that as many as 67 Foreign Direct Investment proposals worth Rs 11,703 crore were approved during the first nine months of the ongoing fiscal. Separately, as per the latest data available with the Securities and Exchange Board of India, Indian firms mobilized Rs 21,000 crore by issuing shares to institutional investors during the December quarter of the current fiscal, resulting into an over 13-fold rise from the year-ago period. The firms had mopped up Rs 1,576 crore in the same period of the previous fiscal. The funds have been mobilized for business expansion, refinancing of debt, working capital requirements and other general corporate purposes.

Some support also came with Finance Secretary Hasmukh Adhia’s statement that the import duty hike in 45 items announced in the Budget will earn about Rs 7,000 crore revenues to the government and is mainly intended to give a push to the MSMEs for domestic manufacturing. Investors took note of domestic brokerage report which highlighted that there will be minimal impact on inflation from the government’s decision to fix support prices for the upcoming Kharif crops like paddy at least 50 per cent higher than the cost of production. The report added that early implementation of the 1.5-times MSP scheme along with the price compensation support and several other innovative schemes for the rural sector will pave the way for a transformational change in rural economy going forward.

However, selling crept in amid Reserve Bank of India (RBI) in its sixth bi-monthly policy sailed with the street expectations and kept the repo rates unchanged at 6%. But, RBI raised red flags about potential steep spike in prices, fiscal profligacy, and the likely fallout of volatility in global financial markets. The RBI cut its FY18 GVA growth to 6.6% and kept the stance neutral. The policy added that retail inflation, measured by the year-on-year change in the Consumer Price Index (CPI), increased for the sixth consecutive month in December on account of a strong unfavourable base effect. It also enlightened that financial markets have become volatile in recent days due to uncertainty over the pace of normalization of the US Fed monetary policy in view of January payrolls data showing rapidly accelerating wage growth and better than expected employment. Separately, the Fitch group company, BMI Research in its latest report revised India’s fiscal deficit forecast to 3.5 percent of gross domestic product (GDP) for the fiscal year 2018-2019 (FY19) as against its earlier estimate of 3.3 percent. It also said that there is room for fiscal slippage as the government seeks to achieve its 7.5 percent growth target.

On the global front, Asian markets closed mixed. Wages of Japanese workers fell in December at the fastest pace in five months after adjustments for inflation, in a worrying sign that consumers could cut back spending because salaries are not keeping up with the cost of goods and services. The European markets were trading in green breaking a seven-day losing streak as investors took heart from a strong bounce on Wall Street at the end of a rollercoaster session. The National Institute of Economic and Social Research said that Britain’s Brexit-bound economy will grow faster than previously thought over the next two years, thanks mostly to strength in the global economy.

The BSE Sensex ended at 34029.86, down by 166.08 points or 0.49% after trading in a range of 34008.42 and 34666.33. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.29%, while Small cap index was up by 1.78%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.50%, Realty up by 1.42%, PSU up by 1.05%, Healthcare up by 0.93% and Energy up by 0.87%, while Telecom down by 1.37%, TECK down by 0.74%, Bankex down by 0.68%, IT down by 0.64% and Capital Goods down by 0.57% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 2.86%, ONGC up by 1.94%, Tata Motors up by 1.12%, Tata Motors - DVR up by 0.96% and Asian Paints up by 0.82%. (Provisional)

On the flip side, Bharti Airtel down by 2.29%, Wipro down by 2.00%, Yes Bank down by 1.93%, Larsen & Toubro down by 1.60% and HDFC Bank down by 1.53% were the top losers. (Provisional)

Meanwhile, days after release of Union Budget 2018, expressing optimism over the government’s decision to increase customs duty on certain items, Finance Secretary Hasmukh Adhia has said that the government will receive about Rs 7,000 crore revenue, on account of import duty hike in 45 items.

Adhia, however, clarified that import duty hike is not for collection of revenue because the import of these items are not too much and the country is not getting too much of revenue, but at the most, the country will get something like Rs 6,000-7,000 crore due to extra import duty. He also noted that the government has taken this decision to give a push to the MSMEs for domestic manufacturing, as this industry is in a position to make many of these items.

Besides, Finance Secretary mentioned about a phased manufacturing programme in electronic manufacture industry and for which increasingly they will be putting more duty on the final product, then on second level of spare part and third level of spare part. The idea is to encourage assemblers to make more and more components in India.

In the Budget 2018, Finance minister Arun Jaitley proposed an increase in customs duty on a range of products, from fruit juice to mobile phones. He proposed to increase customs duty on mobile phones from 15% to 20%, on some of their parts and accessories to 15% and on certain parts of TVs to 15%. This measure will also promote creation of more jobs in the country.

The CNX Nifty ended at 10459.10, down by 39.15 points or 0.37% after trading in a range of 10446.40 and 10614.00. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were HPCL up by 4.86%, Aurobindo Pharma up by 2.77%, BPCL up by 2.42%, ONGC up by 2.08% and Coal India up by 2.05%. (Provisional)

On the flip side, Ambuja Cement down by 3.25%, Vedanta down by 2.66%, Bharti Airtel down by 2.52%, Indiabulls Housing down by 2.34% and Yes Bank down by 2.30% were the top losers. (Provisional)

The European markets were trading in green with UK’s FTSE 100 increased 52.68 points or 0.74% to 7,194.08, Germany’s DAX increased 83.9 points or 0.68% to 12,476.56 and France’s CAC increased 35.15 points or 0.68% to 5,196.96.

Asian equity markets ended mixed on Wednesday as investors monitored oil price movements and kept a cautious eye on bond markets after a brutal selloff in global equity markets earlier this week. Chinese shares ended sharply lower as investors booked some profits in recent outperformers. However, Japanese shares closed modestly higher in volatile trade as investors stayed on guard for more losses in global equity markets after US futures slipped.