Post Session: Quick Review

Indian equity benchmarks traded above neutral line throughout the day and ended with modest gains. The market breath was neutral with one stock advancing against each declining one. Indian equity benchmarks made an optimistic start and traded jubilantly in early deals on Wednesday as investors took note of a foreign brokerage report that India remains vulnerable in its external position, but this does not pose any concern about the country’s macro stability and is quite manageable. The report added that India’s CAD doubled from 0.7% of GDP in 2016-17 to 1.4% in 2017-18 and the widening of CAD is likely to continue in the next financial year as well albeit at a slower pace. Separately, former governor of Reserve Bank of India Raghuram Rajan said that India should be thinking of the next 10 to 20 years when it would need a massive push to create jobs. Rajan enlightened that India could achieve even 10% growth if it built infrastructure, cleared the way for companies, eased the way for them to do business, and improved the quality of human capital including healthcare and education. Traders took note that the government has extended the facility of hiring workers on fixed-term employment to all sectors to improve the ease of doing business. It has also agreed to the trade unions demand that no permanent employee be moved to fixed term employment.

However, selling crept in between the trade with benchmarks slipping from their intraday high but managed to hold some gains. Investors turned cautious with the private report stating that Indian firms are most concerned about the increase in protectionism across the world. The report noted that the perception of rising protectionism is much higher than the global average, where three in five (61 per cent) of the 6,000 companies surveyed, think that their governments are steadily moving towards protectionism. Additionally, a foreign brokerage report downgraded its forecasts for India’s economy in the wake of a more than $2 billion fraud at Punjab National Bank, warning it could spark tighter regulation of the banking sector that would constrain credit growth. It lowered its real gross domestic product (GDP) forecast on India for the year to March 2019 to 7.6% from 8% earlier. Separately, a private Asian Business Sentiment Index highlighted that India experienced a decline in sentiment, falling to 72 from 79. The survey showed that increasing trade friction and higher interest rates were cited as the biggest concerns.

Meanwhile, select metal stocks were under pressure as the Trump Administration has decided to slap an anti-dumping duty on the stainless steel flanges imported from China and India after it found in its preliminary probe that both the countries had provided subsidies to the exporters. Sugar stocks closed on mixed note as the government scrapped the 20% export duty on sugar in a bid to boost overseas sales of the commodity and lift its domestic price. The country is facing surplus production of the sweetener. In order to reduce the closing stock of 2017-18, the industry aims to export 1.5-2 million tonnes of sugar till October 2018, when the new sugar year begins.

On the global front, Asian markets closed mixed. China’s fiscal revenue surged 15.8% in the first two months of this year from a year earlier. Government spending for the Jan-Feb period rose by 16.7% on-year. The European markets were trading in red as investors awaited a likely hike in US interest rates later in the day. British workers’ overall pay rose at the fastest pace in nearly two-and-a-half years over the three months to January, bolstering the chances that the Bank of England will raise borrowing costs in May.

Back home, Information Technology (IT) stocks erased gains as the Indian IT industry’s woes from its largest market - the United States - just do not seem to abate. A legislation proposed by Democrat Senator Sherrod Brown has now brought the focus on the business process outsourcing (BPO) industry while the US immigration agency has suspended a faster H-1B visa application route. LT Foods and KRBL closed in green on ICRA’s report that the strong demand revival, especially from Iran, may help Basmati rice exports to close the year with a 20% growth at Rs 26,000 crore.

The BSE Sensex ended at 33143.77, up by 147.01 points or 0.45% after trading in a range of 33070.53 and 33354.93. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.11%, while Small cap index was up by 0.27%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.29%, Capital Goods up by 0.51%, TECK up by 0.47%, Energy up by 0.47% and Realty up by 0.43%, while Metal down by 0.52%, Healthcare down by 0.48%, Basic Materials down by 0.22% and Auto down by 0.12% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 4.54%, NTPC up by 2.29%, Larsen & Toubro up by 1.21%, HDFC Bank up by 1.16% and HDFC up by 1.01%. (Provisional)

On the flip side, Tata Steel down by 1.84%, Adani Ports & Special Economic Zone down by 1.45%, Tata Motors down by 1.36%, Hero MotoCorp down by 1.23% and Tata Motors - DVR down by 0.92% were the top losers. (Provisional)

Meanwhile, highlighting various benefits of waterways, Union Minister for Shipping Nitin Gadkari has stressed on the need to improve waterways in the country to cut down the cost of logistics. He added that push for water transportation will boost the economy and tourism sector, with the development of the country’s 7,500-km-long coastline as a corridor for goods and passenger traffic.

Gadkari noted that use of waterways is a win-win situation as it will help in reducing pollution and help foreign and domestic tourists travel to their hotel by boats. Besides, he said that as a result of this, diesel consumption will also get reduced and people will enjoy another facet of tourism by travelling on water.

The Union Minister also said that use of waterways is economical, environmental friendly and needs better utilization and suggested that all hotels should be linked to waterways by creating jetties everywhere. He further highlighted potentials of tourism sector in generating employment, saying that 49 per cent of the capital investment is utilised for job creation in this sector.

The CNX Nifty ended at 10156.55, up by 32.20 points or 0.32% after trading in a range of 10132.95 and 10227.30. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 4.32%, Bajaj Finance up by 2.58%, NTPC up by 2.16%, Indiabulls Housing up by 1.77% and BPCL up by 1.35%. (Provisional)

On the flip side, Tata Steel down by 1.80%, Bosch down by 1.76%, Hero MotoCorp down by 1.66%, Adani Ports & Special Economic Zone down by 1.64% and Eicher Motors down by 1.62% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 38 points or 0.54% to 7,023.27, Germany’s DAX decreased 15.39 points or 0.13% to 12,291.94 and France’s CAC decreased 17.35 points or 0.33% to 5,235.08.

Asian equity markets ended mixed on Wednesday as oil prices surged and ahead of the Federal Reserve's first meeting since the appointment of its new chair, Jerome Powell. The Federal Reserve policymakers have begun a two-day policy meeting that is expected to result in another interest rate increase on Wednesday. The Fed has said it expects to raise interest rates a total of three times this year, and one of the key debates on Wall Street is whether it will wind up increasing rates three times or four. The current meeting is the Fed's first since Jerome Powell became chairman, and investors will be watching his comments at a press conference Wednesday. Chinese shares ended lower, weighed down by start-up firms, as investors booked profits in shares of technology companies. Meanwhile, the Japanese market is closed for the Vernal Equinox.