Post Session: Quick Review

Indian equity benchmarks traded below neutral line for most part of the day and ended with cut of around three tenth of a percent. Markets close lower after two sessions of up-move in March series. The market breadth was in favour of declines with one stock advancing against every two declining ones. Indian equity benchmarks turned flat but somehow managed to keep their head above water in early deals as traders took some support from report that India’s economic think-tank, National Council of Applied Economic Research (NCAER) has pegged India’s Gross Domestic Product (GDP) growth at 7.5 percent for the next fiscal year 2018-19 and added that in the current fiscal year (2017-18) Indian economy will grow at 6.7 percent. The figures are in line with the growth projections in current year’s Economic Survey, which said India is likely to clock 7-7.5 percent growth in 2018-19, up from 6.75 percent in the current fiscal. However, markets soon entered into red territory as investors got wary with report highlighting that investments in the domestic capital market through Participatory notes (P-notes) plunged to a nearly eight-and-a-half-year low of Rs 1.19 lakh crore in January-end amid stringent norms put in place by regulator SEBI to check misuse. According to SEBI data, the total value of P-note investments in Indian markets - equity, debt, and derivatives - slumped to Rs 1,19,556 crore at January-end from Rs 1,24,810 crore at the end of the preceding month.

Meanwhile, sentiments remained dampened with a private report stating that inflation is expected to trend higher and though RBI may keep policy rates on hold in 2018-19, there are also increasing chances of a rate hike. Market participants’ sentiments remained pessimistic, as the government has categorized around 9,500 non-banking financial companies -- about 80 per cent of the NBFCs in the country -- as ‘high risk’ prone as they have not complied with a stipulated provision of the anti-money laundering law. On sectoral front, banking stocks were under pressure as there seems no end to PNB woes. Punjab National Bank (PNB) told exchanges late on Monday that the quantum of unauthorized transactions using SWIFT could rise by $204.25 million, or Rs 1,322 crore. The bank had on February 14 disclosed that unauthorized transactions worth $1.8 billion, or Rs 11,300 crore, had been carried out from its Brady House branch. With this, the total amount lost to fraud now stands at about Rs 12,622 crore.

On the global front, Asian markets closed mixed. A survey showed that though global demand for memory chips and petroleum products remained robust, South Korean exports were likely to have barely risen in February from year ago levels as the Lunar New Year holidays meant there were less working days. The European markets were trading mostly in green. The European Commission said that euro zone sentiments fell as expected for the second month in a row in February from a multi-year high as confidence sapped from every sector except services.

Back home, select stocks in cement counters were buzzing in today’s trade on ICRA’s report that cement demand in India is likely to grow about 4.5% in 2018-19 on the back of pick-up in housing segment, and higher infrastructure spend. Domestic cement production during April-December 2017-18 stood at 216.5 million metric tonne (MMT), higher by 2.7% compared to 210.8 MMT during the same period of previous financial year.

The BSE Sensex ended at 34354.71, down by 91.04 points or 0.26% after trading in a range of 34320.25 and 34610.79. There were 15 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.54%, while Small cap index was down by 0.38%.  (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 1.10%, Energy up by 0.56%, Consumer Durables up by 0.33%, TECK up by 0.27% and FMCG up by 0.25%, while Realty down by 1.96%, Bankex down by 1.36%, PSU down by 1.31%, Metal down by 0.91% and Basic Materials down by 0.67% were top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 2.29%, Dr. Reddy’s Lab up by 1.96%, NTPC up by 1.50%, Hero MotoCorp up by 1.39% and Reliance Industries up by 1.31%. (Provisional)

On the flip side, Axis Bank down by 2.87%, SBI down by 2.42%, Sun Pharma down by 2.06%, ICICI Bank down by 1.56% and Coal India down by 1.50% were the top losers. (Provisional)

Meanwhile, suggesting the banks to invest in long-term assets to improve the capital formation in agriculture sector, Finance minister Arun Jaitley has said that the agriculture credit flow target of Rs 11 lakh crore for 2018-19 is achievable by the banking sector, if they step up agriculture loans.

Jaitley noted that this target would also support the government’s intention to double farmer incomes by 2022 and also reviewed the funds announced in the earlier Union Budgets and expressed need of collaboration of all stakeholders to improve the farmers’ income. He highlighted that investments in financial technology over the past few years have made the rural financial ecosystem efficient, speedy and transparent.

Besides, Department of Financial Services Secretary Rajeev Kumar also stressed on the need of financial inclusion and adoption of technologies to make use of the opportunities arising out of higher GDP growth. He further asked the banking system to concentrate on geographical areas like North East, East, and Central India, where the formal credit can give a fillip to the growth potential these areas offer.

The CNX Nifty ended at 10551.05, down by 31.55 points or 0.30% after trading in a range of 10537.25 and 10631.65. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 2.08%, Dr. Reddy’s Lab up by 1.92%, NTPC up by 1.41%, Reliance Industries up by 1.27% and Hero MotoCorp up by 1.22%.  (Provisional)

On the flip side, Ambuja Cement down by 4.16%, SBI down by 2.39%, Axis Bank down by 2.32%, Sun Pharma down by 2.27% and Coal India down by 2.12% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 15.98 points or 0.22% to 7,305.56, France’s CAC increased 8.88 points or 0.17% to 5,353.14, while Germany’s DAX decreased 2.72 points or 0.02% to 12,524.32.

Asian equity markets made a mixed closing on Tuesday as investors awaited Congressional testimony later in the day by the new Federal Reserve Chairman Jerome Powell for further insights into the central bank's view on inflation and interest rates. Japanese shares rallied after US stocks hit their highest level in over three weeks overnight amid declining Treasury yields on easing worries over rate hikes. However, Chinese shares snapped a six-session winning streak, led lower by real estate and resource firms, as investors booked profits after a recent strong rally.