Post Session: Quick Review

Indian equity benchmarks traded on a volatile note throughout the day and ended in red as global trade war pulled the equity markets down worldwide. Bears took full control on Dalal street with Nifty slipping below 10,000 mark and Sensex drifting below 32,600 mark. The negative sentiments refrained investors from participating in the markets. Indian equity benchmarks made a gap-down opening and witnessed bloodbath in early deals as the threat of a trade war with China sparked a widespread selloff. The sentiments were also under pressure after a foreign brokerage report raised concern that India has emerged as one of the Asian economies most vulnerable in an environment of rising interest rates in the US. Higher interest rates stateside could trigger capital outflows from emerging economies as investors search for better yields in the US. Separately, credit ratings agency, ICRA in its latest report highlighted that India’s current account deficit (CAD) is likely to widen to $10-12 billion in the fourth quarter of the fiscal year 2017-18 (FY18), as against $3.4 billion in the same period of the previous fiscal year. The report stated that CAD may increase on the back of higher merchandise trade deficit and added that the services trade surplus is expected to improve.

Investors took note of a private report which said that handling the emerging frauds in the banking sector coupled with likely ripple effects, muted GST collections and the protectionist policy imposed by the US are some of the factors that are likely to keep risk to growth elevated. As per its economic forecast for March 2018, the report added that the government faces a challenging scenario of managing the growth momentum. Separately, realty stocks were under pressure in today’s trade on private report that Indian real estate has seen fewer launches, subdued sales and muted property prices in the year 2017. Launches of residential apartments across top seven property markets witnessed an on-year decline of nearly 50%, while sales also slipped 15%. The top 7 cities recorded new unit launches of around 1.26 lakh in 2017 as against 2.50 lakh in 2016. The street shrugged off the report that monsoon rains in India are likely to be unaffected by the El Nino weather pattern, which is likely to set in only after the four-month rainy season ends in September. Monsoon season delivers about 70% of India’s annual rainfall and is key to the success of the farm sector, which accounts for about 15% of India’s $2 trillion economy but sustains nearly two thirds of the country’s 1.3 billion people.

On the global front, Asian markets closed in red. Japan’s key inflation gauge ticked up in February, putting the Bank of Japan halfway to its goal of 2 percent. Yet a strengthening yen and the threat of a global trade war underscore the central bank’s vulnerability to global markets and events. The European markets were trading in red. European Central Bank President Mario Draghi cautioned EU leaders at a that European governments planning to raise spending even as growth picks up posed a medium-term risk to the economy. Falling private-sector debt and improving capital ratios for banks added to a positive picture, but Draghi highlighted four medium-term risks, mostly from outside the continent.

Back home, banking sector was under pressure with PSU banking stocks falling the most. Union Bank of India (UBI) tumbled on report that the bank has registered a complaint with the Central Bureau of Investigation (CBI) against Hyderabad-based Totem Infrastructure and its promoters for a sum of Rs 1,394 crore fraud case. This apart, the bank said its asset quality has deteriorated sharply in the fourth quarter and the bank may be in for further stress in terms of profitability if it fails to contain its mounting non-performing assets.

The BSE Sensex ended at 32572.13, down by 434.14 points or 1.32% after trading in a range of 32483.84 and 32720.03. There were 4 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.36%, while Small cap index was down by 1.53%. (Provisional)

The only gaining sectoral indices on the BSE were TECK up by 0.31% and IT up by 0.11%, while Realty down by 3.40%, Metal down by 2.91%, Bankex down by 2.24%, Basic Materials down by 2.17% and Capital Goods down by 1.67% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 1.95%, Power Grid up by 0.65%, Infosys up by 0.54% and Mahindra & Mahindra up by 0.23%. (Provisional)

On the flip side, Yes Bank down by 3.74%, Axis Bank down by 3.58%, ICICI Bank down by 3.37%, SBI down by 2.73% and Tata Motors - DVR down by 2.39% were the top losers. (Provisional)

Meanwhile, highlighting a significant role of services sector in economic development, Commerce and Industry Minister Suresh Prabhu has said that the government is working on a strategy to boost share of services in exports. He also said that services exports will grow faster than merchandise exports and thus raising the total exports from the country.

Prabhu underlined various efforts being taken by the government to boost exports like focus on adding new products into the export basket and identification of 12 champion services sectors to promote them domestically as well as globally. He also said that Rs 5,000 crore fund allocation to promote 12 champion services will drive growth of the services economy in the country.

Commerce and Industry Minister further suggested that the industry must focus on delivering services of global standards and pointed out that the country’s chemical sector has huge growth potential and it needs to create capacity to meet exports demand. He also highlighted policies being formulated for various sectors like aviation, agri- export and industrial policy to promote the country’s exports.

The CNX Nifty ended at 9988.15, down by 126.60 points or 1.25% after trading in a range of 9951.90 and 10027.70. There were 11 stocks advancing against 39 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech up by 2.80%, Bharti Infratel up by 2.18%, Zee Entertainment up by 1.95%, Adani Ports & Special Economic Zone up by 1.91% and Power Grid up by 1.06%. (Provisional)

On the flip side, Vedanta down by 5.62%, Hindalco down by 5.24%, Axis Bank down by 3.85%, Yes Bank down by 3.64% and Lupin down by 3.23% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 69.47 points or 1% to 6,883.12, Germany’s DAX decreased 239.92 points or 1.98% to 11,860.16 and France’s CAC decreased 104.33 points or 2.02% to 5,062.88.

Asian stocks closed in red on Friday, the dollar weakened and safe-haven assets such as the gold and the Japanese yen strengthened after US President Donald Trump announced tariffs on at least $50 billion worth of Chinese imports and China said it would impose tariffs on up to $3 billion worth of US goods in retaliation. Chinese shares ended lower under pressure from mounting trade tensions. Further, Japanese shares closed near six-month lows as the rumblings of a global trade war shook financial markets and helped lift the yen to its highest level in more than a year against the US dollar. Investors were also spooked by the appointment of John Bolton, the former US envoy to the UN, as Trump's national security adviser.