Post Session: Quick Review

Indian equity benchmarks traded below neutral line for most part of the day and ended with cut of more than four tenth of a percent. The market breadth was in favour of declines with one stock advancing against every two declining ones. Indian equity benchmarks traded slightly in red in early deals on Thursday. The sentiments were under pressure with Former RBI governor D Subbarao cautioning against India’s deficit challenge and said the country is no longer the sweet spot due to rising oil prices. He also said raising of import tariff in the Union Budget 2018-19 will hurt Make in India mission. Subbarao added that the country’s balance of payments crisis in 1991 and the near crisis in 2013 were consequences of unchecked fiscal profligacy spilling over into the external sector. The markets were also reacting over the disappointing fiscal deficit data, which stood at Rs 6.77 lakh crore during April-January  2017-18 period; 113.7% of Rs 5.95 lakh crore revised Budget Estimates (BE) target for FY18, mainly due to higher expenditure. In the same period last year, the fiscal deficit was at 105.7% of BE.

Banking stocks continued to reel under pressure as the impact of Punjab National Bank (PNB) scam continued to hit. Canara Bank has filed a complaint with Central Bureau of Investigation (CBI) on fraudulent transactions worth Rs 515 crore against Kolkata based RP Infosystems and its directors. The alleged fraud comes amid CBI’s probe into recent complaints of massive frauds in the Corporation Bank, PNB, Bank of Baroda and Oriental Bank of Commerce. Separately, as per report the government has ordered shutting down 35 overseas branches of Indian public sector banks (PSBs) over viability and profitability. The report added that sixty nine more international branches of Indian PSU banks and their foreign offices, arms and JVs are being examined for closure.

The street shrugged off the report that India regained its status as the world’s fastest growing major economy in the October-December quarter, surpassing China for the first time in a year as government spending, manufacturing and services all picked up. The Ministry of Statistics data showed that Asia’s third-largest economy grew 7.2% in the December quarter, its fastest in five quarters. Separately, India’s core sectors grew at a faster clip in January from a year ago than in the previous month, with an uptick in cement, electricity, coal, refinery products and steel industries, indicating a strong start to the last quarter of 2017-18. The combined index of the eight core industries rose 6.7% in January compared to 4.2% in December 2017.  

On the global front, Asian markets closed mixed. A private survey showed that growth in China’s manufacturing sector unexpectedly picked up to a six-month high in February as factories rushed to replenish inventories to meet rising new orders. The European markets were trading in red. A survey showed that euro zone’s manufacturing boom slowed a little further last month but factories across the bloc still appear to be enjoying their best growth spell in almost two decades.

The BSE Sensex ended at 34036.37, down by 147.67 points or 0.43% after trading in a range of 34015.98 and 34278.63. There were 10 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.67%, while Small cap index was down by 0.26%. (Provisional)

The only gaining sectoral indices on the BSE were FMCG up by 0.13% and Oil & Gas up by 0.08%, while Metal down by 0.97%, Bankex down by 0.92%, TECK down by 0.76%, Telecom down by 0.71% and Realty down by 0.71% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 1.39%, IndusInd Bank up by 0.99%, ONGC up by 0.66%, Hindustan Unilever up by 0.66% and Tata Steel up by 0.53%. (Provisional)

On the flip side, ICICI Bank down by 2.71%, SBI down by 2.27%, Infosys down by 1.21%, Yes Bank down by 0.70% and Reliance Industries down by 0.57% were the top losers. (Provisional)

Meanwhile, breaching the full-year revised target of the current fiscal year 2017-18, India’s fiscal deficit, the difference between government expenditure and revenue, stood at Rs 6.77 lakh crore during April-January  2017-18 period, which is 113.7% of Rs 5.95 lakh crore revised Budget Estimates (BE) target for FY18, mainly due to higher expenditure. In the same period last year, the fiscal deficit was at 105.7% of BE.

According to the Controller General of Accounts (CGA) data, the government’s revenue deficit was at Rs 4.80 lakh crore during the first 10 months of 2017-18, which work out 109.2% of the revised BE, while Net tax receipts stood at 9.7 lakh crore during the reported period. Besides, total receipts from revenue and non-debt capital of the government during the period amount to Rs 11.63 lakh crore or 71.7% of revised estimate.

The data also showed that the government's total expenditure was Rs 18.39 lakh crore at January-end, or 83% of Rs 22.17 lakh crore budget estimate. Capital expenditure during April-January of 2017-18 was Rs 2.64 lakh crore, or 96.9%, of the full-year revised estimate, while revenue expenditure during the current fiscal till January came in at Rs 15.75 lakh crore or 81% of the full-year revised estimate.

The CNX Nifty ended at 10449.65, down by 43.20 points or 0.41% after trading in a range of 10447.15 and 10525.50. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 3.08%, Coal India up by 1.41%, Aurobindo Pharma up by 1.40%, IndusInd Bank up by 1.23% and Bajaj Finance up by 1.11%. (Provisional)

On the flip side, ICICI Bank down by 2.83%, Vedanta down by 2.20%, SBI down by 2.18%, Zee Entertainment down by 2.18% and Hindalco down by 2.04% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 44.84 points or 0.62% to 7,187.07, Germany’s DAX decreased 180.59 points or 1.45% to 12,255.26 and France’s CAC decreased 52.29 points or 0.98% to 5,268.20.

Asian equity markets made a mixed closing on Thursday as investors awaited Federal Reserve chair Jerome Powell's second congressional testimony for further insight on inflation and interest rates. Gold prices dipped and the yen firmed up a little bit while oil held mostly steady in Asian trading. Japanese shares closed sharply lower as sentiments were hit by a rout in Wall Street overnight, while the euro’s weakness against the yen hit companies such as precision machinery makers. The manufacturing sector in Japan continued to expand in February, albeit at a slightly slower rate, the latest survey from Nikkei revealed with a manufacturing PMI score of 54.1, down from 54.8 in January. Capital spending in Japan topped expectations to rise 4.3 percent sequentially in the fourth quarter of 2017, while a gauge of consumer confidence weakened unexpectedly in February. Chinese shares ended higher after the latest survey from Caixin showed the country's manufacturing sector expanded at a slightly faster rate in February. The manufacturing PMI rose to 51.6 from 51.5 in January as total new work expanded at a slightly faster pace. Meanwhile, the markets in South Korea remained closed for Independence Movement Day.