Post Session: Quick Review

Indian equity benchmarks traded in green territory throughout the day and ended with gains of more than four tenth of a percent. The market breadth was in favour of declines with one stock advancing against every three declining ones. The equity benchmarks made an optimistic start and traded in fine fettle as traders took some encouragement after CRISIL Ratings in its latest report enlightened that the Central Bank’s revised framework for expeditious resolution of bad loans is a long-term positive for banks and has the potential to bring about a big change in the approach of banks to monitor exposures and resolution of Non-Performing Assets (NPAs). Investors took note of Chief Economic Advisor Arvind Subramanian’s statement that although India has made a lot of progress towards achieving financial inclusion, a lot more needs to be done. He added that providing essential goods and services to citizens was only the first policy step towards financial inclusion. Meanwhile, investors’ sentiment got boost with a private report highlighting that consumption is reviving as the effect of demonetization fades and companies get used to the Goods and Services Tax (GST), with some recording multi-quarter highs in volume and sales in the October-December period, exceeding street expectations.

Furthermore, sentiments remained optimistic with a report showing that India Inc reported strong earnings growth in the December 2017 quarter after declines in the previous two quarters. This was largely expected given the lower base effect due to demonetization in the year-ago quarter. In the December quarter, net profit of a sample of 2,043 companies rose to a six quarter high of 27.5% year-on-year. Net sales rose by 11.5%. After excluding oil and gas companies along with banks and finance entities, sales and profit growth in the December 2017 quarter was 8.8% and 25%, respectively. Some support also came on report that Inflation based on wholesale prices eased to a six-month low of 2.84% in January on cheaper food articles even as vegetable prices continued to rule high. Calculated on the basis of Wholesale Price Index (WPI), the inflation was 3.58% in December 2017 and 4.26% in January 2017.

On the global front, Asian markets closed mostly in green. Japan’s core machinery orders tumbled in December at the fastest pace in more than three years and companies expect orders to rise only marginally in January-March, raising concerns that recent gains in capital expenditure may taper off. The European markets were trading in green as investors appeared to take stronger-than-anticipated US inflation data in their stride.

Back home, however, markets erased some gains and came off from day’s high as PSU banking stocks faced pressure on PNB controversy. Enforcement Directorate reportedly told that Punjab National Bank (PNB) fraud is bigger than Rs 11,000 crore. Enforcement Directorate is likely to soon get in touch with other banks involved. Apart from PNB, Union Bank, Axis Bank, Allahabad Bank and SBI Overseas Bank are involved in the fraud.

The BSE Sensex ended at 34304.81, up by 148.86 points or 0.44% after trading in a range of 34186.01 and 34535.08. There were 19 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.41%, while Small cap index was down by 1.18%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.97%, Metal up by 0.75%, IT up by 0.49%, Energy up by 0.49% and FMCG up by 0.43%, while Telecom down by 1.32%, Industrials down by 0.85%, Consumer Durables down by 0.78%, Capital Goods down by 0.77% and Realty down by 0.52% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 2.98%, Infosys up by 1.48%, ONGC up by 1.37%, Power Grid up by 1.30% and SBI up by 1.01%. (Provisional)

On the flip side, Hero MotoCorp down by 1.89%, Bharti Airtel down by 1.51%, Tata Steel down by 1.17%, Wipro down by 0.53% and Asian Paints down by 0.41% were the top losers. (Provisional)

Meanwhile, aided by fall in food, vegetable and Minerals prices, India's inflation on wholesale level softened for the second consecutive month in January 2018. This fall is in line with trend seen in January CPI inflation. According to the latest data released by the government, the wholesale price inflation (WPI) stood at 2.84 percent (provisional) in January as against 3.58 percent (provisional) for the previous month and 4.26 percent during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 2.30 percent compared to a build up rate of 4.55 percent in the corresponding period of the previous year. However, prices of some manufactured items such as wood and rubber products moved up in January compared to December. 

Component wise, primary articles index having weight of 22.62%, dropped 1.5 percent to 129.7 (provisional) from 131.7 (provisional) for the previous month. Among the primary articles, the index for ‘Food Articles’ group slipped 2.4 percent to 140.6 (provisional) from 144.1 (provisional) for the previous month and the index for ‘Minerals’ group declined by 0.3 percent to 121.9 (provisional) from 122.3 (provisional) for the previous month. On the other hand, the index for ‘Non-Food Articles’ group rose by 1.4 percent to 120.7 (provisional) from 119.0 (provisional) for the previous month and the index for ‘Crude Petroleum & Natural Gas’ group increased by 0.3 percent to 78.3 (provisional) from 78.1 (provisional) for the previous month.

Fuel & Power index having weight of 13.15%, was up by 0.4 percent to 96.9 (provisional) from 96.5 (provisional) for the previous month.

Manufactured Products constituting the major portion of the index with weight of 64.23% moved up by 0.6 percent to 114.7 (provisional) from 114.0 (provisional) for the previous month. The index for ‘Manufacture of Beverages’ group rose by 0.2 percent to 119.9 (provisional) from 119.7 (provisional) for the previous month, the index for ‘Manufacture of Leather and Related Products’ group up by 0.3 percent to 120.7 (provisional) from 120.3 (provisional) for the previous month, the index for ‘Manufacture of Wood and of Products of Wood and Cork’ group increased by 0.4 percent to 130.8 (provisional) from 130.3 (provisional) for the previous month, the index for ‘Manufacture of Paper and Paper Products’ group soared 2.5 percent to 121.4 (provisional) from 118.4 (provisional) for the previous month, the index for ‘Printing and Reproduction of Recorded Media’ group rose by 0.6 percent to 144.6 (provisional) from 143.7 (provisional) for the previous month and the index for ‘Manufacture of Chemicals and Chemical Products’ group rose by 0.9 percent to 113.8 (provisional) from 112.8 (provisional) for the previous month.

Besides, the index for ‘Manufacture of Rubber and Plastics Products’ group was up by 0.3 percent to 107.8 (provisional) from 107.5 (provisional) for the previous month, the index for ‘Manufacture of other Non-Metallic Mineral Products’ group surged 2.2 percent to 114.0 (provisional) from 111.6 (provisional) for the previous month, the index for ‘Manufacture of Basic Metals’ group increased by 3.7 percent to 105.8 (provisional) from 102.0 (provisional) for the previous month, the index for ‘Manufacture of Fabricated Metal Products, Except Machinery and Equipment’ group jumped 0.9 percent to 111.9 (provisional) from 110.9 (provisional) for the previous month, the index for ‘Manufacture of Computer, Electronic and Optical Products’ group rose by 0.3 percent to 111.0 (provisional) from 110.7 (provisional) for the previous month, the index for ‘Manufacture of Electrical Equipment’ group was up by 0.1 percent to 110.1 (provisional) from 110.0 (provisional) for the previous month, the index for ‘Manufacture of Motor Vehicles, Trailers and Semi-Trailers’ group rose by 0.4 percent to 110.7 (provisional) from 110.3 (provisional) for the previous month, the index for ‘Manufacture of other Transport Equipment’ group zoomed 1.0 percent to 111.7 (provisional) from 110.6 (provisional) for the previous month and the index for ‘Manufacture of Furniture’ group was up by 0.5 percent to 120.7 (provisional) from 120.1 (provisional) for the previous month.

On the flip side, the index for ‘Manufacture of Food Products’ group declined by 0.5 percent to 126.8 (provisional) from 127.4 (provisional) for the previous month, the index for ‘Manufacture of Tobacco Products’ group was down by 0.5 percent to 151.3 (provisional) from 152.1 (provisional) for the previous month, the index for ‘Manufacture of Wearing Apparel’ group decreased by 0.3 percent to 138.5 (provisional) from 138.9 (provisional) for the previous month, the index for ‘Manufacture of Pharmaceuticals, Medicinal Chemical and Botanical Products’ group fell 1.1 percent to 121.7 (provisional) from 123.1 (provisional) for the previous month, the index for ‘Manufacture of Machinery and Equipment’ group declined by 1.0 percent to 108.1 (provisional) from 109.2 (provisional) for the previous month and the index for ‘Other Manufacturing’ group was down by 6.7 percent to 104.2 (provisional) from 111.7 (provisional) for the previous month.

The CNX Nifty ended at 10549.70, up by 48.80 points or 0.46% after trading in a range of 10511.05 and 10618.10. There were 31 stocks advancing against 19 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 3.60%, BPCL up by 3.38%, ICICI Bank up by 3.15%, Vedanta up by 2.68% and HPCL up by 2.09%. (Provisional)

On the flip side, Indiabulls Housing down by 2.70%, Hero MotoCorp down by 1.97%, Aurobindo Pharma down by 1.68%, Bharti Airtel down by 1.40% and Cipla down by 1.31% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 45.75 points or 0.63% to 7,259.72, Germany’s DAX increased 101.23 points or 0.82% to 12,440.39 and France’s CAC increased 78.62 points or 1.52% to 5,243.88.

Asian stocks closed mostly in green on Thursday as investors brushed aside concerns that the Federal Reserve could move more quickly to raise short-term interest rates to tame inflation. Trading activity remained relatively thin across the region as some of the markets were closed for public holidays. Markets in Taiwan and China were closed for the Lunar New Year holidays, while the South Korean markets were closed for Seollal Day. Hong Kong shares ended a shortened trading day nearly 2 percent higher, led by financials and information technology companies. The Singapore stock market also closed early at noon for the Lunar New Year holiday. Meanwhile, Japanese shares posted solid gains following three successive days of losses that took the Nikkei average to a four-month low on Wednesday. The gain came despite a firmer yen and the release of mixed industrial output and core machinery orders data. Japan's industrial production grew more than initially estimated in December, while core machinery orders tumbled 11.9 percent from the previous month, separate reports showed.