Post Session: Quick Review

Indian equity benchmarks traded in green for most part of the day but ended with a modest cut of above one tenth of a percent. The market breadth was in favour of declines with two stocks advancing against three declining ones. Indian equity benchmarks made a positive start and traded in fine fettle in early deals. The sentiments were upbeat on report that the direct tax collections jumped by nearly 20 per cent between April and February this fiscal as the Income-Tax Department races to meet its full year targets. The net direct tax receipts grew by a hefty 19.5 per cent in the first 11 months of the fiscal amounting to Rs 7.44 lakh crore. Net corporate income tax collections increased by 19.7 per cent in the period, while personal income tax receipts grew by 18.6 per cent. Some support also came with Economic Affairs Secretary Subhash Chandra Garg’s statement that the 7.2 per cent expansion in the economy during October-December quarter has put the country in one of the highest growth bracket in the world and recovery will continue to be sharp going ahead. The third quarter growth of 7.2 per cent was highest in five quarters. The previous high was recorded at 7.5 per cent in the July-September quarter of 2016-17. Investors took note that engineering exports which have been recording a healthy growth is expected to see a new high in the current financial year. Commerce Secretary Rita Teaotia said the exports to developed countries are growing at a rapid pace. Shipments to North America and Europe account for about 40 per cent of the total exports from the sector.

However, the markets witnessed selling pressure in last leg of trade as traders turned cautious with Indian Steel Authority’s report that US President Donald Trump’s move to hike import tariffs on steel will adversely hit India’s local markets. Some anxiety spread among the market-men with a private report stating that India Inc has nearly 1.8 lakh crore of cash trapped in its balance sheet, as working capital situation worsens on account of increase in inventory levels. The report also found that the cash conversion cycle has deteriorated by 4percent from FY16, to 44 days in FY17. The street took note of another private report that Indian retail inflation likely to eased to a four-month low in February on softening prices for vegetable and other perishable foods, but probably stayed above the Reserve Bank of India’s target. Select power companies were under pressure on report that thermal power projects promoted by Adani, Essar, Jaypee and Lanco figure in the list of 34 stressed electricity projects with total capacity of over 40 GW. According to report on Stressed/Non-performing Assets in Electricity, tabled in Parliament by Standing Committee on Energy, the total outstanding debt in these stressed projects is of the tune of Rs 1.74 lakh crore as of June, 2017 based on the RBI data.

On the global front, Asian markets closed mostly in green. The Bank of Japan stayed the course with its monetary stimulus at Governor Haruhiko Kuroda’s final policy meeting before his new term begins next month. With inflation still far from the BOJ’s 2 percent target, Kuroda made it clear during parliamentary confirmation hearings this week that powerful monetary easing is here for a while. The European markets were trading mostly lower, as investors reacted to President Donald Trump’s decision to impose global duties on metal imports.

Back home, few cement companies were under pressure on report that the government is considering action against cement companies for cartelisation. The Competition Commission of India had earlier imposed a fine on 10 cement companies and a trade body for price fixing in 2016.

The BSE Sensex ended at 33315.60, down by 35.97 points or 0.11% after trading in a range of 33256.42 and 33519.49. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.28%, while Small cap index was down by 0.23%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 0.75%, TECK up by 0.71%, FMCG up by 0.24%, Consumer Disc up by 0.22% and Capital Goods up by 0.16%, while Metal down by 1.68%, Basic Materials down by 0.91%, Power down by 0.89%, Bankex down by 0.79% and PSU down by 0.76% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 1.42%, HDFC up by 1.20%, Hindustan Unilever up by 0.70%, Bajaj Auto up by 0.66% and Infosys up by 0.65%. (Provisional)

On the flip side, Tata Steel down by 4.19%, Axis Bank down by 2.71%, Adani Ports & Special Economic Zone down by 2.32%, Sun Pharma down by 1.79% and Yes Bank down by 1.46% were the top losers. (Provisional)

Meanwhile, a day after the government gave nod to a relief package for financially-stressed telecom sector, the Telecom Minister Manoj Sinha has said that the telecom companies now need to focus on improving services for the consumers instead of fighting among themselves.

The Telecom Minister further listed the benefits of the government’s decision, noting that the move will help in consolidation, drive investments and improve the ease of doing business in the sector along with immediate relief to the telecom companies. Besides, he said that the services would also get improved, as the move will ensure that the companies get contiguous spectrum.

Manoj Sinha also noted that some effect will also be seen on the state of call drops, but with relaxing spectrum caps the issue of call drops will get eradicated will not be correct. He further highlighted the government’s efforts to help the sector even it bound by the rules, regulations and timeline for spectrum auctions.

The Union Cabinet gave telcos 16 years to pay for spectrum, excluding a two-year moratorium, from 10 years previously and also relaxed the spectrum holding limit for telecom companies to 35% from 25% at present.

The CNX Nifty ended at 10229.80, down by 12.85 points or 0.13% after trading in a range of 10211.90 and 10296.70. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tech Mahindra up by 2.30%, Bajaj Finance up by 1.83%, TCS up by 1.03%, Eicher Motors up by 1.00% and Zee Entertainment up by 1.00%. (Provisional)

On the flip side, Tata Steel down by 3.65%, Axis Bank down by 2.60%, Adani Ports & Special Economic Zone down by 2.08%, Yes Bank down by 1.85% and Sun Pharma down by 1.62% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 51.21 points or 0.41% to 12,304.36, France’s CAC decreased 7.18 points or 0.14% to 5,246.92, while UK’s FTSE 100 increased 0.07 points or 0% to 7,203.31.

Asian markets closed mostly in green on Friday as geopolitical tensions eased and investors heaved a sigh of relief that US trade tariffs were less severe than traders had originally feared. Geopolitical tensions eased after North Korean leader Kim Jong Un had offered to halt nuclear and missile tests and expressed his desire to meet with US President Donald Trump through South Korean national security adviser Chung Eui-yong. Separately, the White House slapped import tariffs of 25 percent on steel and 10 percent for aluminum but exempted Canada and Mexico and offered the possibility of excluding other allies, backtracking from an earlier ‘no-exceptions’ stance. Chinese shares ended higher after official data showed China's inflation rose sharply to the highest level in more than four years in February, driven by a rebound in food prices. At the same time, producer price inflation slowed to a 15-month low. Consumer price inflation rose to 2.9 percent in February from 1.5 percent in January, the National Bureau of Statistics reported. This was the highest since November 2013. Producer price inflation weakened to 3.7 percent in February from 4.3 percent a month ago. Further, Japanese shares closed higher after the Bank of Japan kept rates unchanged and offered no clues on when it would wind down stimulus measures. Also, trade worries subsided and geopolitical tensions eased, helping buoy investors’ sentiments ahead of the US February jobs report due later in the day.