Post Session: Quick Review

Indian equity benchmarks traded below neutral line throughout the day and ended with cut of around six tenth of a percent. Oil prices remained a worry as it further rose to hit its highest level in nearly two weeks. The benchmarks made a pessimistic start and traded in red terrain in early deals as sentiments remained dampened as an index mapping the country’s short term financial conditions has plunged over 12 points for the fourth quarter of the current fiscal ending March 31, as compared to the previous quarter. The index stood at 53.2 for the fourth quarter (Q4) of 2017-18 as against 65.3 in the October-December period. Separately, foreign investors have pulled out so far this month a staggering $1 billion or Rs 6,850 crore from equities during February 1-16 from the Indian stock markets in the wake of sell-offs globally. This is against the total inflow of over Rs 13,780 crore by Foreign Portfolio Investors (FPIs) in January.

Meanwhile, investors also remained cautious with report that in lieu of the ongoing fraudulent transaction scam involving Punjab National Bank, the ASSOCHAM demanded that the government to reduce its stake in banks to less than 50. Sentiments also remained downbeat after FICCI survey report stated that glitches in the Goods and Services Tax Network (GSTN) portal, cumbersome procedures and documentation as well as the cost of compliance are major areas of concern that need to be addressed to make the GST a success. On the sectoral front, Banking stocks were under pressure on report that the exposure of Indian banks in the alleged fraud involving jeweller Nirav Modi, his relatives and associated companies may touch Rs 20,000 crore, almost twice the initial estimate. The amount cited above would include bonafide credit to related firms that now risks being classified as bad debt given that the promoters have been accused of fraud. The amount involved was initially pegged at Rs 11,300 crore.

On the global front, most of the Asian markets closed in green as sentiments improved gradually from a recent shakeout that stemmed from fears of creeping inflation and higher borrowing costs. Buoyant sales of cars and electronics led Japan’s exports to a 14th straight month of growth in January but manufacturers’ business confidence slid - highlighting fears of the rising yen disrupting an export-led recovery. The European markets were trading mostly in red. A survey showed that British households’ gloom about their finances deepened this month, and most now expect borrowing costs to rise again within six months after the Bank of England raised interest rates in November.

Back home, aviation companies stocks InterGlobe Aviation, SpiceJet and Jet Airways closed in green as investors reacted to strong growth in air traffic for January. According to DGCA data, domestic air traffic grew 20% in January, with airlines ferrying more than 1.14 crore passengers.

The BSE Sensex ended at 33817.09, down by 193.67 points or 0.57% after trading in a range of 33554.37 and 34122.96. There were 6 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.98%, while Small cap index was down by 0.90%. (Provisional)

The sole gaining sectoral index on the BSE was Energy up by 0.03%, while Capital Goods down by 1.47%, Metal down by 1.44%, PSU down by 1.32%, Industrials down by 1.25% and Basic Materials down by 1.15% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 0.82%, Coal India up by 0.74%, Infosys up by 0.64%, Kotak Mahindra Bank up by 0.48% and Axis Bank up by 0.44%. (Provisional)

On the flip side, Tata Steel down by 5.35%, Dr. Reddy’s Lab down by 3.02%, Adani Ports & Special Economic Zone down by 2.50%, Tata Motors - DVR down by 2.18% and Larsen & Toubro down by 2.11% were the top losers. (Provisional)

Meanwhile, assessing position of the industries post the implementation of Goods and Services Tax (GST), industry body, the Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest survey report stated that the new tax regime has had a positive impact on the logistics of businesses, with over 60% respondents indicated good transportation of goods in terms of check-posts. As per the survey report, over 50% of respondents highlighted that goods vehicles are no longer stopped and there is no checking at state borders, while 59% respondents were optimistic with transportation time reduction post GST implementation.

However, FICCI’s survey report highlighted the major issues being faced by the industry such as glitches in the Network (GSTN) portal, cumbersome procedures and cost of compliance. In the report, issues with the robustness and volume handling capacity of the GST portal were pointed out by all the respondents of the survey and expressed need for a major revamp of the portal, to make it more efficient.

The survey report further said that multiplicity of registrations remained a concern for services providers, as a separate registration is now required with every state where service is being provided. On the return filings, the survey respondents urged to make filing of returns simpler and added that there should also be a centralised registration for inter-state services.

The CNX Nifty ended at 10387.95, down by 64.35 points or 0.62% after trading in a range of 10302.75 and 10489.35. There were 12 stocks advancing against 38 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 1.34%, Coal India up by 0.86%, Reliance Industries up by 0.76%, Kotak Mahindra Bank up by 0.62% and Infosys up by 0.54%. (Provisional)

On the flip side, Tata Steel down by 5.60%, Adani Ports & Special Economic Zone down by 2.74%, Dr. Reddy’s Lab down by 2.65%, Bajaj Auto down by 2.50% and Larsen & Toubro down by 2.39% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 6.55 points or 0.09% to 7,288.15, France’s CAC decreased 4.21 points or 0.08% to 5,277.37, while Germany’s DAX increased 10.85 points or 0.09% to 12,462.81.

Asian stocks closed in green on Monday following last week's gains on Wall Street. Meanwhile, trading volumes remained thin across the region as markets in China, Hong Kong, and Taiwan remained shut due to the Lunar New Year holiday. Japanese shares rallied, with a weaker yen, firmer lead from Wall Street and encouraging trade data helping support underlying sentiments. Japan posted a merchandise trade deficit of 943.417 billion yen in January, the Ministry of Finance said - an improvement of 13.6 percent from a year earlier. That exceeded forecasts for a shortfall of 1,003.6 billion yen following the 358.7 billion yen deficit in December.