Post Session: Quick Review

Indian equity benchmarks traded on a volatile note throughout the day and ended with modest cut as consolidation continues for second day. The markets tried to recover during the second half of the trade from the lowest point of the day but failed to surpass the neutral line. Indian equity benchmarks made a pessimistic start and traded in red terrain in early deals amid weak global cues. Traders remained concerned on report that the Reserve Bank of India (RBI) is unlikely to reduce key policy rates in 2018 despite a dip in retail inflation in February. Risks like the higher Minimum Support Prices (MSPs) for food grains promised in the budget, can push up the inflation in the next fiscal year. Terming it as a challenging period for the central rate setting panel, the report highlighted that the rising MSPs are a risk and once inflation starts rising from the second quarter, the apex bank would turn more hawkish. Investors took note of a private report stating that based on the current monthly rate of Rs 87,400 crore, the street expects that the Goods and Services Tax (GST) collection may remain range-bound unless compliance measures improve, particularly invoice matching. The lower GST run rate poses a risk to FY19 tax collection and to fiscal deficit.

However, markets trimmed some losses in the late afternoon session and come off their intraday low points, as investors took some comfort with a report highlighting that WPI inflation has softened in the month of February, continuing its easing trend for the third straight month. According to the latest data released by the government, WPI stood at 2.48% (provisional) in February as against 2.84% (provisional) for the previous month and 5.51% during the corresponding month of the previous year. Some relief also came with Commerce and Industry Minister Suresh Prabhu’s statement that the new industrial policy, which will be released soon, will focus on modernizing existing industries, besides pushing for frontier technologies like robotics and artificial intelligence. Some solace also came with Finance Ministry’s statement that the various initiatives taken by the government has started yielding results with loans to the sector witnessing a growth of 20%.

Separately, a private report highlighted that revival in rural demand, increased infrastructure spending is likely to drive India’s growth in current year, even as increasing debt and trade protectionism could pose a challenge. Showing signs of recovery, the Indian economy recorded a five-quarter high growth of 7.2% in the October-December period on good showing by key sectors like agriculture, construction and manufacturing. But, trade remained in the negative territory, as the domestic sentiments remained cautious with India Ratings and Research’s latest report stating that with the United States imposing import duties of 25% and 10% steel and aluminium under the Trump administration, Indian companies will not be directly hit, but could get hurt due to higher supply pressure in the countries where India is a major exporter.

On the global front, Asian markets closed in red amid fears of rising US protectionism as President Donald Trump fired his Secretary of State. Japan’s core machinery orders rebounded in January from a steep decline the previous month, handily beating expectations in a sign that capital spending will continue contributing to economic growth. The European markets were trading in green. Euro zone industrial production was weaker than expected in January, mainly due to a sharp drop in the output of energy. Production in the 19 countries sharing the euro fell 1.0 percent month-on-month in January for a 2.7 percent year-on-year rise.

The BSE Sensex ended at 33843.27, down by 13.51 points or 0.04% after trading in a range of 33580.69 and 33854.74. There were 11 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.39%, while Small cap index was up by 0.10%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 0.57%, Consumer Durables up by 0.35%, Basic Materials up by 0.29%, IT up by 0.27% and Healthcare up by 0.19%, while Telecom down by 0.98%, Oil & Gas down by 0.88%, Energy down by 0.56%, Metal down by 0.49% and Realty down by 0.44% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 2.06%, Maruti Suzuki up by 0.99%, Axis Bank up by 0.94%, SBI up by 0.88% and ICICI Bank up by 0.82%. (Provisional)

On the flip side, ONGC down by 1.55%, Hero MotoCorp down by 1.53%, Tata Steel down by 1.27%, HDFC down by 0.89% and Bajaj Auto down by 0.84% were the top losers. (Provisional)

Meanwhile, continuing its easing trend for the third straight month, India’s inflation on wholesale level softened in the month of February, with a sustained dip in food articles prices. The fall in non-food articles prices also supported the wholesale price inflation (WPI) to come in line with the lower retail inflation. According to the latest data released by the government, WPI stood at 2.48% (provisional) in February as against 2.84% (provisional) for the previous month and 5.51% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 2.30% compared to a build up rate of 4.92% in the corresponding period of the previous year.

Component wise, primary articles index having weight of 22.62%, dropped 1.3% to 128.0 (provisional) in February from 129.7 (provisional) for the previous month. Among the primary articles, the index for ‘Food Articles’ group declined by 2.0% to 137.8 (provisional) from 140.6 (provisional) for the previous month and the index for ‘Non-Food Articles’ group was down by 0.1% to 120.6 (provisional) from 120.7 (provisional) for the previous month. On the flip side, the index for ‘Minerals’ group rose 0.2% to 122.2 (provisional) from 121.9 (provisional) for the previous month and the index for ‘Crude Petroleum & Natural Gas’ group was up by 2.9% to 80.6 (provisional) from 78.3 (provisional) for the previous month.

Fuel & Power index having weight of 13.15%, rose 1.2% to 98.1 (provisional) from 96.9 (provisional) for the previous month, on the back of rise in Coal and Mineral Oils prices.

Manufactured Products constituting the major portion of the index with weight of 64.23% increased marginally by 0.4% to 115.2 (provisional) from 114.7 (provisional) for the previous month. The index for ‘Manufacture of Tobacco Products’ group rose by 0.9% to 152.7 (provisional) from 151.3 (provisional) for the previous month, the index for ‘Manufacture of Textiles’ group surged by 0.6% to 113.7 (provisional) from 113.0 (provisional) for the previous month, the index for ‘Manufacture of Wearing Apparel’ group was up by 0.4% to 139.0 (provisional) from 138.5 (provisional) for the previous month, the index for ‘Manufacture of Leather and Related Products’ group increased by 0.7% to 121.6 (provisional) from 120.7 (provisional) for the previous month and the index for ‘Manufacture of Wood and of  Products of Wood and Cork ‘ group rose by 0.1% to 130.9 (provisional) from 130.8 (provisional) for the previous month.

Besides, the index for ‘Manufacture of Chemicals and Chemical Products’ group moved up by 1.1% to 115.0 (provisional) from 113.8 (provisional) for the previous month, the index for ‘Manufacture of Other Non-Metallic Mineral Products’ group rose 0.4% to 114.4 (provisional) from 114.0 (provisional) for the previous month, the index for ‘Manufacture of Basic Metals’ group surged 2.0% to 107.9 (provisional) from 105.8 (provisional) for the previous month, the index for ‘Manufacture of Machinery and Equipment’ group increased by 1.5% to 109.7 (provisional) from 108.1 (provisional) for the previous month, the index for ‘Manufacture of Motor Vehicles, Trailers and Semi-Trailers’ group was up by 0.4% to 111.1 (provisional) from 110.7 (provisional) for the previous month, the index for ‘Manufacture of Other Transport Equipment’ group rose by 0.3% to 112.0 (provisional) from 111.7 (provisional) for the previous month and the index for ‘Other Manufacturing’ group soared by 2.5% to 106.8 (provisional) from 104.2 (provisional) for the previous month.

On the flip side, the index for ‘Manufacture of Food Products’ group declined by 0.3% to 126.4 (provisional) from 126.8 (provisional) for the previous month, the index for ‘Manufacture of Beverages’ group decreased by 0.5% to 119.3 (provisional) from 119.9 (provisional) for the previous month, the index for ‘Manufacture of Paper and Paper Products’ group dropped by 1.2% to 120.0 (provisional) from 121.4 (provisional) for the previous month, the index for ‘Printing and Reproduction of Recorded Media ‘ group slipped by 0.8% to 143.5 (provisional) from 144.6 (provisional) for the previous month and the index for ‘Manufacture of Pharmaceuticals, Medicinal Chemical and Botanical Products’ group declined by 0.8% to 120.7 (provisional) from 121.7 (provisional) for the previous month.

Further, the index for ‘Manufacture of Rubber and Plastics Products’ group decreased by 0.5% to 107.3 (provisional) from 107.8 (provisional) for the previous month, the index for ‘Manufacture of Fabricated Metal Products, Except Machinery and Equipment’ group was down by 0.1% to 111.8 (provisional) from 111.9 (provisional) for the previous month, the index for ‘Manufacture of Computer, Electronic and Optical Products’ group fell by 0.3% to 110.7 (provisional) from 111.0 (provisional) for the previous month and the index for ‘Manufacture of Electrical Equipment’ group was down by 0.6% to 109.4 (provisional) from 110.1 (provisional) for the previous month.

The CNX Nifty ended at 10416.75, down by 10.10 points or 0.10% after trading in a range of 10336.30 and 10420.35. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tech Mahindra up by 3.37%, Ambuja Cement up by 2.58%, Bajaj Finance up by 2.28%, Yes Bank up by 1.66% and Ultratech Cement up by 1.61%. (Provisional)

On the flip side, Indian Oil Corporation down by 3.25%, Bharti Infratel down by 3.12%, HPCL down by 2.02%, ONGC down by 1.61% and Hero MotoCorp down by 1.60% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 15.03 points or 0.21% to 7,153.81, Germany’s DAX increased 40.73 points or 0.33% to 12,261.76 and France’s CAC increased 15.12 points or 0.29% to 5,257.91.

Asian markets closed in red on Wednesday after US President Donald Trump blocked microchip maker Broadcom Ltd's proposed takeover of Qualcomm Inc on national security grounds and fired his secretary of state, sparking fears of protectionism. There were also reports that the Trump administration is eying hefty tariffs on Chinese imports. Chinese shares ended lower as worries about Trump's protectionist trade policies overshadowed encouraging industrial output data. China's industrial output climbed 7.2 percent in the January to February period from a year ago, faster than the 6.2 percent rise in December, a government report showed. That was also above the 6.6 percent increase economists had forecast. Further, Japanese shares lost ground, after four straight days of gains, as the dollar wallowed against the yen and other major currencies on speculation that geopolitical tensions may rise after Trump's decision to replace Secretary of State Rex Tillerson with CIA chief Mike Pompeo.