Post Session: Quick Review

Indian equity benchmarks traded in green for most part of the session but selling in last hour of trade pulled the markets lower to end near day’s low. The market breath was in favour of declines with two stocks advancing against every three declining ones. The benchmarks traded in fine fettle in early deals with Sensex and Nifty recapturing their crucial levels, as traders opted to buy beaten down but fundamentally strong stocks after two days of continuous drubbing. The sentiments were upbeat with Suresh Prabhu’s statement that the government will soon come out with a comprehensive strategy to increase the share of global trade to 40 per cent of the gross domestic product (GDP), which is expected to touch $5 trillion by 2025. According to the Federation of Indian Export Organisation (FIEO), the current share of exports in GDP is only 18-19%. Select telecom companies stocks remained buzzing on report that the Cabinet is likely to decide next month on the relief package for the telecom sector, based on the recommendations of an inter-ministerial group, including giving more time to telecom operators to make payment for spectrum and increasing the holding limit of radio waves. The sector’s debt is estimated to be around Rs 4.6 lakh crore and a decline in the margins of telecom companies due to stiff competition in the market is said to have pushed it to financial stress.

Meanwhile, India Ratings and Research said that the infrastructure sector is showing signs of stability, although pockets of stress still linger. The agency has revised the outlook on the sector to stable for FY19 from negative in FY18 with visible improvements in toll roads and wind projects. The outlook for telecom has been revised to negative-to-stable from negative. The outlook for thermal power (project level), oil and gas (including city gas distribution), power (corporate utilities), ports and airports remain unchanged. Separately, NASSCOM, the IT industry body enlightened that the Indian Information Technology industry expects to grow exports at a marginally higher 7-9 percent in the coming fiscal, slightly higher than its expected growth of 7.8 percent in the current financial year. In June last year, NASSCOM had said it expects growth of 7-8 percent this fiscal. It expects to add $14-16 billion in revenue in the coming year.

However, selling in private sector banks pulled the markets lower. Investors took note that the Goods and Services Tax (GST) Council, headed by Finance Minister Arun Jaitley, is likely to meet next week to decide on ease of compliance in filing the GST returns. Since the implementation of the GST on July 1, 2017, traders have been complaining about technical glitches in the GSTN, besides the complex process. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. February 2018 series to next month i.e. March 2018 series. The near month February 2018 derivatives contracts will expire on Thursday i.e. February 22, 2018.

On the global front, Asian markets closed in red. The Bank of Japan will likely continue its virtual normalization of monetary policy under its new leadership. The appointment of Masazumi Wakatabe, as a deputy governor is unlikely to change the course of policy toward additional easing. The European markets were trading mostly in green, as investors monitored the release of the latest batch of corporate earnings. The mood among German investors worsened this month. The Mannheim-based ZEW research institute said its monthly survey showed its economic sentiment index fell to 17.8 from 20.4 in January.

Back home, sugar stocks displayed mixed reaction after CRISIL Ratings in its report highlighted that import duty and stock limits will improve prices and profitability of mills and sugarcane farmers alike. A raft of government measures earlier this month have come as relief for sugar mills and sugarcane farmers alike. These include increase in import duty on raw and white sugar to 100%, and restriction on sugar sales by imposition of stockholding limits for February and March.

The BSE Sensex ended at 33693.16, down by 81.50 points or 0.24% after trading in a range of 33657.89 and 33960.95. 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 0.07%, while Small cap index was down by 0.13%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.80%, Metal up by 1.32%, Telecom up by 0.97%, Basic Materials up by 0.71% and TECK up by 0.41%, while Bankex down by 0.73%, Realty down by 0.54%, Capital Goods down by 0.35%, Energy down by 0.19% and Healthcare down by 0.19% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 2.05%, Bharti Airtel up by 1.16%, ONGC up by 0.95%, TCS up by 0.80% and Dr. Reddy’s Lab up by 0.72%. (Provisional)

On the flip side, Mahindra & Mahindra down by 2.49%, Axis Bank down by 1.72%, Yes Bank down by 1.38%, Kotak Mahindra Bank down by 1.36% and HDFC Bank down by 0.79% were the top losers. (Provisional)

Meanwhile, with an aim to protect the domestic players and to discourage cheap imports, the government may impose anti-dumping duty on ‘Monoisopropylamine’ chemical, largely used in pharma and fertiliser industries, exported from China.

After the investigation, the Directorate General of Antidumping and Allied Duties (DGAD), which administers the anti-dumping and countervailing measures in India, has recommended the imposition of definitive anti-dumping duty on imports of the chemical originating in or exported from the China, as it found that the subject goods have been exported to India from the subject country below its normal value, causing material injury to the domestic industry.

As per the Ministry of Commerce and Industry circular, DGAD suggested duty for a period of 5 years in the range of $497.68 per tonne and $620 per tonne, depending on the producer and exporter. Besides, Alkyl Amines Chemicals had appealed to DGAD for initiation of anti-dumping investigation.

The CNX Nifty ended at 10357.40, down by 21.00 points or 0.20% after trading in a range of 10347.65 and 10429.35. There were 27 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ambuja Cement up by 3.16%, Vedanta up by 2.70%, Coal India up by 1.83%, Bharti Infratel up by 1.39% and Asian Paints up by 1.19%. (Provisional)

On the flip side, Mahindra & Mahindra down by 2.16%, Axis Bank down by 1.82%, Aurobindo Pharma down by 1.54%, Kotak Mahindra Bank down by 1.37% and Yes Bank down by 1.28% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 1.21 points or 0.01% to 12,386.81, France’s CAC increased 1.81 points or 0.03% to 5,257.99, while UK’s FTSE 100 decreased 27.8 points or 0.38% to 7,219.86.

Asian stocks closed in red on Tuesday in the absence of any lead from Wall Street and amid weak cues from Europe. Investors remained on sidelines ahead of minutes from the latest Federal Open Market Committee meeting and a slew of speeches by Fed officials this week to assess the outlook for rate tightening. Japanese Nikkei edged lower by over a percent, as a combination of a retreat in risk appetite and profit-taking dented the broader market, with financials and index-heavy shares underperforming. Markets in China and Taiwan remained closed for the Lunar New Year holidays.