Post Session: Quick Review

Indian equity benchmarks traded in red throughout the day and ended with cut of around nine tenth of a percent with Nifty slipping below 10,400 mark. The market breadth was in favour of declines with one stock advancing against every four declining ones. The sentiments were dampened as investors went wary after the US President ’s decision to levy import tariffs on aluminium and steel has raised fears of a global trade war. The US President said that he would impose a 25% import tariff on steel and 10% on aluminium to protect US producers, a move that could trigger a trade war with China and Europe. Sentiments also remained downbeat with report enlightening that business conditions in India’s service sector deteriorated modestly in February. The seasonally adjusted Nikkei India Services Business Activity Index fell from 51.7 in January to 47.8 in February, its lowest level since August. The report added that activity and new work declined for the first time since November, with rates of contraction the fastest since August. However, firms remained confident towards output growth over the next 12-months as jobs growth quickened to the joint-fastest since June 2011. Investors also remained concerned with a report stating that foreign investors have pulled out more than Rs 11,000 crore from Indian stocks in February 2018 amid better opportunities in other emerging markets. This is the largest outflow in five months. However, the total inflow by foreign portfolio investors (FPIs) in the Indian equity markets stood at Rs 13,781 crore in January 2018.

Meanwhile, a report stating that as many as 359 infrastructure projects, each worth Rs 150 crore and above, have shown cost overrun to the tune of Rs 2.05 lakh crore owing to delays and other reasons, also added some anxiety among the market-men. Investors overlooked Finance Minister Arun Jaitley’s statement that India would retain its position of fastest growing economy in the coming decades, like China did in the last three decades. He further noted that the way the situation in the world is changing there is a great opportunity that has come in the way of India. The world keep facing its challenges and (in) the last few years India has started leaving its footprints behind.

On the global front, Asian markets closed mostly in red. A private business survey showed that growth in China’s services sector softened slightly in February but remained robust, prompting companies to hire more workers for the 18th month in a row. The European markets were trading in green. British businesses grew at the fastest rate in more than two years in the three months to February, despite uncertainty about Britain’s prospects as it prepares to leave the European Union.

Back home, metal stocks were under pressure as US President Donald Trump’s proposed policy on steel, of which his country is the planet’s biggest importer, may cause a supply glut in India, with shipments originally bound for Washington likely to end up at seaports of the world’s fastest-expanding major economy if they can’t hurdle across the American tariff walls. Realty stocks were too under pressure on report that as many as 4.4 lakh housing units were unsold in seven major cities at the end of 2017 with Delhi-NCR contributing maximum at over 1.5 lakh flats. Out of the total unsold housing stock, 34,700 units are ready-to-move-in flats. Mumbai, Delhi-NCR, Chennai, Hyderabad, Pune, Bengaluru, Kolkata are seven cities covered in this survey.

The BSE Sensex ended at 33750.38, down by 296.56 points or 0.87% after trading in a range of 33653.41 and 34034.28. 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 0.96%, while Small cap index was down by 1.14%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 0.54%, Consumer Durables up by 0.30% and TECK up by 0.24%, while Metal down by 3.24%, Energy down by 2.20%, Basic Materials down by 2.05%, Oil & Gas down by 1.84% and Industrials down by 1.66% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 2.28%, Sun Pharma up by 2.16%, NTPC up by 0.77%, Mahindra & Mahindra up by 0.62% and SBI up by 0.40%. (Provisional)

On the flip side, Tata Motors down by 4.68%, Tata Motors - DVR down by 3.75%, Tata Steel down by 2.86%, Coal India down by 2.81% and Bajaj Auto down by 2.81% were the top losers. (Provisional)

Meanwhile, India’s services sector growth lost its momentum in the month of February, falling to a six-month low, as activity and new work orders shrank amid weak underlying demand conditions. Besides, accelerating input cost inflation and rising output charges, also pulled the index lower below the 50.0 no-change mark. The seasonally adjusted Nikkei Services Business Activity Index contracted to 47.8 in the month of February from 51.7 in January. The Nikkei India Composite PMI Output Index, which measures both manufacturing and services, also fell to 49.7 in February from 52.5 in January.

As per the survey report, the headline figure signalled the first fall in output for three months, but one that was modest. However, service providers remained optimistic towards the 12-month outlook for output, as staffing levels in the Indian service sector accelerated to the joint-strongest since June 2011, despite unfavourable demand conditions. Besides, factory employment also grew at the strongest pace in the context of historical data, even it was modest. The survey panel members stated that the new work decreased along with weak market demand and competitive conditions.  

Further, service providers recorded higher levels of outstanding business in the reported month, which they commonly associated with delayed payments. Similarly, backlogs at manufacturers increased at a modest pace but the rate of accumulation was strongest since October 2016. On the inflation front, input cost inflation in the Indian service sector quickened to the strongest since November, on the back of factors like greater fuel prices. Across manufacturing companies, input cost rose for the twenty-ninth consecutive month in February.

The CNX Nifty ended at 10357.30, down by 101.05 points or 0.97% after trading in a range of 10323.90 and 10428.70. There were 8 stocks advancing against 42 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tech Mahindra up by 3.60%, Sun Pharma up by 2.23%, TCS up by 2.15%, NTPC up by 1.23% and UPL up by 0.98%. (Provisional)
On the flip side, Tata Motors down by 5.08%, Hindalco down by 4.98%, Aurobindo Pharma down by 3.86%, Tata Steel down by 2.87% and Coal India down by 2.80% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 25.29 points or 0.36% to 7,095.19, Germany’s DAX increased 56.12 points or 0.47% to 11,969.83 and France’s CAC increased 18.14 points or 0.35% to 5,154.72.

Asian markets closed mostly lower on Monday as fears of a global trade war persisted and the prospect of a hung Parliament in Italy looked increasingly likely. Japanese shares hit a near five-month low as the safe-haven yen strengthened amid fears that a global trade war could break out hurt steelmakers, automakers and shipping companies. Chinese shares ended largely unchanged as Chinese leaders headed into an annual parliament meeting and a survey showed activity in China's services sector cooled slightly last month. The Caixin services PMI dropped to 54.2 from 54.7 in January. Meanwhile, China maintained its growth target for 2018, despite the economy surpassing the goal last year, as the government aims to contain corporate debt and rein in pollution. Premier Li Keqiang set the growth target at 'around 6.5 percent' for 2018. This was unchanged from the last year's target.