Post Session: Quick Review

Indian equity benchmarks traded on volatile note throughout the day and ended in green with gain of more than four tenth of a percent. The last hour of trade helped Nifty surpass 10,250 mark, while Sensex ended just shy of 33,400 mark. The market breadth was in favour of advances with 3 stocks advancing against each declining ones. The equity benchmarks made a cautious start and traded slightly in red in early deals taking cues from global sell-off amid resurgent trade war worries. Sentiments remained under pressure as growth in India’s manufacturing sector slowed again in March as both output and new orders fell to its slowest pace since October. The Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, fell to 51.0 in March from 52.1 in February. The slower growth reflects weaker gains in new businesses and a decline in employment for the first time in eight months. The sentiments were also dampened on ICRA’s report that more Indian companies are likely to default on their borrowings in the fiscal year that started in April compared with the previous year. The default rate could go up in fiscal year 2019 on higher interest cost, deteriorating business conditions, likely difficulty in getting bank funding given the challenges in the banking system.

However, buying crept in as a steep rise in output of cement and fertilizers pushed up the growth of the core sector to 5.3% in February even as refinery products, electricity, coal, and natural gas production made the output of the infrastructure industries grow slower than 6.1% in January. Separately, direct tax collection in the fiscal year just ended has exceeded the targets with a record 6.84 lakh income tax returns being filed. Direct tax collections in 2017-18 at Rs 9.95 lakh crore, exceeded the revised budgetary target of Rs 9.8 lakh crore. A net of 99.5 lakh new assessees were added to the tax net. Additionally, expressing confidence of achieving fiscal deficit target of current fiscal year, Finance Secretary Hasmukh Adhia said that the government is on the course of meeting the fiscal deficit target of 3.5% of gross domestic product (GDP) for 2017-18. He added that this will be aided by buoyant tax collections, especially on the direct tax side coupled with Goods and Services Tax (GST) collections and natural savings by ministries.

Meanwhile, banking stocks were buzzing in today’s trade as the Reserve Bank of India allowed banks to spread their bond trading losses, a change that is likely to boost profitability of lenders as well as spur a rally in stock and bond markets. Under the change, lenders can spread bond-trading losses incurred in the December 2017 and March 2018 quarters equally over four quarters. This will come as a major reprieve to the public sector banks, which have been hard hit by trading losses from a spike in bond yields over recent months.

On the global front, Asian markets closed mostly in red. China’s ambassador to Washington said, amid growing fears of an impending trade war, that China will take counter-measures of the same proportion and scale if the United States imposes further tariffs on Chinese goods. The European markets were trading in red. The euro zone’s manufacturing boom stumbled for a third month in March as optimism waned and demand ebbed, but output remained robust and expansion was still broad-based across the region. Activity in the UK manufacturing sector accelerated last month. Research firm IHS Markit said its manufacturing purchasing managers’ index rose to 55.1 in March, compared to forecasts for a reading of 54.8.

Back home, pharma stocks closed mostly in green on report that after a bruising two years, the domestic pharmaceutical sector is set for a sharp turnaround in the new fiscal year with a 20-22 per cent growth in operating profit - the fastest pace since 2014, while revenue may grow at 9-11 per cent. CRISIL added that the projected good run is premised on a decline in regulatory alerts for larger companies as well as a bigger pipeline of high-value drugs compared to the past two years. Operating income and profit will see a course reversal with a 20-22 per cent growth, while revenue may clip at 9-11 per cent. 

The BSE Sensex ended at 33394.79, up by 139.43 points or 0.42% after trading in a range of 33153.83 and 33402.94. There were 20 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.95%, while Small cap index was up by 1.38%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 1.64%, Utilities up by 1.25%, Bankex up by 1.20%, PSU up by 1.18% and Basic Materials up by 1.01%, while Consumer Durables down by 0.56%, IT down by 0.17% and TECK down by 0.01% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 3.19%, Mahindra & Mahindra up by 3.00%, Tata Motors - DVR up by 2.14%, Yes Bank up by 2.14% and Power Grid up by 2.08%. (Provisional)

On the flip side, Wipro down by 2.02%, ONGC down by 1.25%, Adani Ports & Special Economic Zone down by 0.91%, HDFC Bank down by 0.71% and Larsen & Toubro down by 0.60% were the top losers. (Provisional)

Meanwhile, amid softer expansion in output and new orders, India’s manufacturing sector activity expanded at its slowest pace in the month of March to fall at 5-month low. As per the survey report, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - slowed down to 51.0 in March from 52.1 in February. However, the reading remained above the watershed 50 mark indicating expansion for the eighth consecutive month.

According to the report, thought the output rose to continue expansion rally for eighth successive month with growth in new orders and favourable demand conditions, rate of expansion was modest and the weakest since October, in March. Further, growth was reported across all three broad market groups and consumption goods outperformed the other two market groups. The survey report found that new business placed at manufacturing companies rose for the fifth consecutive month during March but at the weakest pace in the current sequence.

Besides, the inflationary pressures eased in the reported month, as input costs rose at the softer pace and one that was below the series trend, while output charge inflation was marginal and the weakest in the current sequence. However, payroll numbers declined for the first time in eight months, amid reports of spare operating capacity.

The CNX Nifty ended at 10254.00, up by 42.20 points or 0.41% after trading in a range of 10171.05 and 10255.35. There were 32 stocks advancing against 18 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing up by 4.66%, ICICI Bank up by 3.44%, Mahindra & Mahindra up by 3.00%, Bajaj Finserv up by 2.82% and HPCL up by 2.47%. (Provisional)

On the flip side, Tech Mahindra down by 3.87%, Wipro down by 2.04%, ONGC down by 1.36%, Titan Co down by 1.26% and Hindalco down by 1.23% were the top losers. (Provisional)

Asian stocks closed mostly lower on Tuesday and safe-haven assets such as gold and the yen rose as renewed trade tensions, a sharp fall in crude oil prices and another sell-off in US technology stocks rattled investors. Chinese shares ended lower on concerns that the Chinese retaliatory tariffs could dampen market confidence and hurt economic growth. Further, Japanese shares closed lower, dragged down by exporters and technology stocks. Though, Hong Kong stocks reversed earlier losses and ended higher, led by gains in consumer goods makers, although caution prevailed amid escalating trade tensions after Beijing unveiled retaliatory trade measures against the United States.