Post Session: Quick Review

Indian equity benchmarks traded below neutral line throughout the day and ended in red for sixth straight session. Bears continued to be in the driver’s seat on D-Street as global and local weakness weighed on the indices. Also, fears of trade wars intensified among global economies after a high-profile White House exit was seen on Tuesday. Indian equity benchmarks traded in red in early deals as growing fears over the PNB scam and continued selling pressure from FIIs on expectations of faster than anticipated interest rate hike in the US kept the underlying sentiments cautious. Banking stocks were under pressure on media report that the extent of the unraveling fraud at India’s state-run Punjab National Bank could rise beyond the nearly $2 billion mark so far outlined by the lender. Investigations are underway, but sentiments were hit after sleuths have started questioning big private banks as well. Separately, a foreign brokerage expected that PSU banks will report treasury loss of Rs 20K crore in Q4. It is of the view that the bond hit will add to Q4 woes, while over ownership will weigh on earnings.

Meanwhile, sentiments were also pessimistic with a private report that private equity and venture capital investments in February registered a sharp 60% month-on-month decline to $1.4 billion across 63 deals, due to the absence of any mega deals. As per the report, no major deals above the value of $300 million happened last month, causing the decline from January, which registered deals worth $3.5 billion. Separately, following the new norms on stressed assets issued by the RBI last month, power companies fear that two-thirds of private thermal power capacity is at high risk of being declared as non-performing assets (NPA). Severe impact is expected on 51,000-Mw existing power generation capacity set up with investments of more than Rs 4 lakh crore, and another 28,000-Mw plants are under construction.

The street shrugged off private report which enlightened that the Indian economy is likely to recover gradually to 7.1 per cent in the 2018-19 financial year, as GST-related disruptions have eased and consumption levels have improved. The report added that gradual recovery is underway and the country has started to recuperate from the cyclical and structural bottlenecks witnessed over the past two years. Investors took note that the government will pitch for a sovereign rating upgrade with global agency Fitch, highlighting reform push in taxation and PSU banks and its plans to gradually lower government debt. The representatives from Fitch are scheduled to meet Chief Economic Advisor Arvind Subramanian and Economic Affairs Secretary Subhash Chandra Garg and other finance ministry officials today.

On the global front, Asian markets closed in red. Masazumi Wakatabe, one of the government’s two nominees for BOJ deputy governor said that the Bank of Japan can come up with a new policy framework if needed to achieve its inflation target. Japan’s index of coincident economic indicators fell in January by the most since the devastating earthquake and nuclear disaster in March 2011 due to weak shipments of cars and smart phone parts. The European markets were trading in red after resignation of Donald Trump’s economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the US government.

Back home, sugar stocks were under pressure in today’s trade on report that the industry body has revised country’s 2017-18 sugar production upward by about 13% at 29.5 million tonnes from its second advance estimate of 26.1 million tonnes. Separately, sugar prices drifted lower at the wholesale market in the national capital as ceaseless arrivals from mills, triggered by limited offtake by stockists and bulk consumers such as soft-drinks and ice-cream makers mainly led to a fall in sugar prices.

The BSE Sensex ended at 33086.39, down by 230.81 points or 0.69% after trading in a range of 32991.14 and 33331.21. There were 11 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.16%, while Small cap index was down by 2.07%. (Provisional)

The only gaining sectoral indices on the BSE were Consumer Durables up by 0.53% and FMCG up by 0.23%, while Telecom down by 2.16%, Capital Goods down by 1.84%, Power down by 1.72%, Industrials down by 1.66% and Healthcare down by 1.54% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 1.19%, Maruti Suzuki up by 0.80%, Kotak Mahindra Bank up by 0.74%, Asian Paints up by 0.66% and Tata Motors up by 0.40%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 5.66%, SBI down by 3.76%, ICICI Bank down by 2.59%, Bharti Airtel down by 2.34% and ONGC down by 2.27% were the top losers. (Provisional)

Meanwhile, in order to make an effective standards regulatory regime in India, the Commerce Ministry has started an exercise to formulate a national strategy for standardisation of products and services, circulating a draft of the strategy to seek stakeholders’ views till end of March 2018.

In a view of rapid growth of the economy, its size and emerging relevance in global trade, the ministry has expressed need to establish a robust quality infrastructure in India with a harmonised, dynamic, and mature standards ecosystem for goods. It added that this would fuel economic growth and enhance the ‘Made in India’ label.

The ministry highlighted that standards have been widely recognized as catalysts for technical development, industrial growth, well-being of the society and more recently for convergence of new and emerging technologies, and countries are accordingly evolving strategies to synergize standardization work with technological, social and economic development at the national level as well as to influence global standardization efforts.

The draft strategy has various key objectives like positioning standards as a key driver of all economic activities relating to goods and services, providing level playing field to domestic industry and developing a comprehensive ecosystem in India for standards development taking into account the diversity of interests and expertise available.

The CNX Nifty ended at 10163.55, down by 85.70 points or 0.84% after trading in a range of 10141.55 and 10243.35. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech up by 1.84%, ITC up by 1.25%, Zee Entertainment up by 0.97%, Maruti Suzuki up by 0.91% and Asian Paints up by 0.58%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 6.45%, SBI down by 3.88%, Indiabulls Housing down by 3.37%, Bharti Airtel down by 2.65% and ICICI Bank down by 2.46% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 3.36 points or 0.05% to 7,143.39, Germany’s DAX decreased 43.07 points or 0.36% to 12,070.80 and France’s CAC decreased 25.16 points or 0.49% to 5,145.07.

Asian markets closed in red on Wednesday after White House chief economic adviser Gary Cohn, an advocate for free trade, resigned from the Trump administration, raising concerns that Trump will go ahead with his plan to impose tariffs and risk a trade war. Further, worries about the potential impact of a trade war overshadowed easing geopolitical concerns after North Korea said it is willing to talk about denuclearization. Japanese shares closed lower as steelmakers extended recent losses on trade tariff worries.