Post Session: Quick Review

Indian equity benchmarks traded in red for most part of the day and ended with cut of more than eight tenth of a percent. Markets extend losses in last hour of trade with Nifty ending below 10,500 mark. The equity benchmarks made an optimistic start and traded in fine fettle in early deals amid firm global cues. Sentiments were upbeat on report that growth in non-food credit in the fortnight to February 2, 2018, rose to near three-year high of 11.89 per cent year-on-year (y-o-y). According to data compiled by the Reserve Bank of India (RBI), the outstanding loans from banks to industry and individuals stood at Rs 82.11 lakh crore as on February 2. Credit growth has moved into double-digit territory in recent months. Investors took note of International Monetary Fund (IMF) director of Communications Department Gerry Rice’s statement that tax collection assumptions in India’s budget is ambitious and the budget for 2018-19 assumes the tax revenue to increase faster than the value of transactions in the economy. He added that the budget aims for a deficit that is smaller than the deficit that was expected in 2017-18. It also noted that the country is returning to the path of gradual fiscal consolidation.

However, selling crept in as investors turned cautious with report highlighting that India’s overall trade deficit widened to $16298.47 million during the month under review as against $9904.82 million in January 2017, the highest in more than three years. On sectoral front, the PSU banking stocks were reeling under pressure stung by a massive Rs 11,400 crore fraud as Punjab National Bank (PNB) crisis continued. The Enforcement Directorate conducted searches in 17 properties linked to billionaire jewellery designer Nirav Modi and his maternal uncle and business partner Mehul Chinubhai Choksi’s firm Gitanjali Gems across India in a case of fraud, and seized diamond, gold, and jewellery worth Rs 51 billion.

On the global front, most of the Asian markets were closed barring Japanese stock exchange which ended in green. Bank of Japan Governor Haruhiko Kuroda said that central bank should not prematurely announce plans for withdrawing its massive monetary stimulus as doing so could confuse markets. Kuroda added that when the time for an exit (from the ultra-easy policy) comes, the BOJ will communicate its intentions appropriately to ensure it doesn’t cause turbulence in markets. The European markets were trading in green as earnings updates continued to impress, and volatility and jitters over rising inflation eased.

Back home, market participants were also concerned as the World Bank identified two global risks that could jeopardise the country’s progress towards a ‘global middle-class status’. These two risks are anti-international trade sentiment and climate change. The World Bank further noted that India’s services exports are being challenged and the climate change is posing threat to the agricultural sector. Investors took note of Union Minister Nitin Gadkari’s statement that the government would not bring any separate electric vehicle policy and would just frame rules for the category.

The BSE Sensex ended at 34008.76, down by 288.71 points or 0.84% after trading in a range of 33957.33 and 34508.24. There were 5 stocks advancing against 26 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.13%, while Small cap index was down by 1.14%. (Provisional)

The top losing sectoral indices on the BSE were PSU down by 1.58%, Auto down by 1.54%, Telecom down by 1.54%, Metal down by 1.48% and Energy down by 1.27%, while there were no gainers on BSE. (Provisional)

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.01%, Infosys up by 0.84%, Asian Paints up by 0.76%, Dr. Reddy’s Lab up by 0.71% and TCS up by 0.13%. (Provisional)

On the flip side, SBI down by 2.76%, Yes Bank down by 2.38%, Bharti Airtel down by 2.10%, IndusInd Bank down by 2.09% and ICICI Bank down by 2.04% were the top losers. (Provisional)

Meanwhile, India’s debt capital markets growth moderated by 3 per cent in 2017, on the back of slowdown in bond issuances. As per credit rating agency ICRA’s latest report, the debt markets reported a growth of 16 per cent in the value of corporate bonds outstanding as on December 2017, which is lower than 19 per cent growth reported for the same period in the previous year.

The report further noted that the bond issuances volume decreased by 2.03 per cent to Rs 4.83 lakh crore during April-December 2017 from Rs 4.93 lakh crore reported during the same period last year. Besides, the volume of corporate bonds outstanding increased significantly by 16.30 per cent to Rs 26.47 lakh crore as on December 2017 from Rs 22.76 lakh crore as on December 2016.

The rating agency highlighted that though the growth of corporate bond issuances got hit with recent volatility and surge in long-term bond yields, India's corporate debt/GDP penetration remains low as compared to many other countries and due to this the medium to long-term prospects for growth of India's debt capital market remains intact.

The CNX Nifty ended at 10454.50, down by 91.00 points or 0.86% after trading in a range of 10434.05 and 10612.90. There were 9 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ambuja Cement up by 1.26%, Cipla up by 1.15%, Infosys up by 1.13%, Asian Paints up by 0.84% and Dr. Reddy’s Lab up by 0.79%. (Provisional)

On the flip side, Tech Mahindra down by 3.67%, Eicher Motors down by 3.42%, Indiabulls Housing down by 2.96%, SBI down by 2.69% and Yes Bank down by 2.35% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 59.9 points or 0.83% to 7,294.71, Germany’s DAX increased 119.04 points or 0.96% to 12,465.21 and France’s CAC increased 52.39 points or 1% to 5,274.91.

The only major Asian market trading today ‘Japanese stock exchange’ ended in green on Friday after US shares extended their winning streak to five sessions overnight, shrugging off concerns over inflation and higher interest rates. Japanese shares saw a relief rally after the government nominated Haruhiko Kuroda to serve a second five-year term as the head of the Bank of Japan, a signal that easy monetary policies will continue. Trading volumes remained thin across Asia as markets in China, Hong Kong, Indonesia, Malaysia, Singapore, South Korea and Taiwan remained closed for the Lunar New Year holiday. Chinese markets are closed till February 21.

Nikkei 225 gained 255.27 points or 1.19% to 21,720.25.