Benchmarks eke out slender gains; Sensex reclaims 33,600 mark

Friday turned out to be a volatile day of trade for Indian equity benchmarks where key gauges somehow managed to keep their head above water and went home with marginal gains. Markets made a cautious start and traded mostly in red after US President Donald Trump ordered his administration to consider tariffs on a $100 billion worth of Chinese imports, dashing hopes for a cooling of trade tensions. The traders also reacted negatively to the report highlighting that 23,000 high net worth individuals (HNIs) have left India since 2014 including 7,000 in 2017 alone, highest numbers for any country. Sentiments remained down-beat after CARE Ratings in its latest report stated that even though RBI lowered its inflation projection sharply from previous forecasts in its first monetary policy review for the new financial year, two key factors -- the progress and spread of monsoons along with the MSP fixation by the government would be a key determinant for inflation in the coming months.

Buying in last leg of trade helped markets to pare all of their early losses and end the session slightly in green terrain as traders get some solace after the finance ministry welcomed the Monetary Policy Committee’s (MPC) projection of higher GDP growth and lower inflation in the current fiscal. The MPC’s growth projection of 7.4% is in line with the Economic Survey. MPC has projected inflation at 4.5% in the fourth quarter of the last fiscal. The decision of MPC comes against the backdrop of government’s assertion that both the fiscal deficit as well as the revenue shortfall in 2017-18 will be lower than the upwardly revised estimates given in the Union Budget. Sentiments also got some support with private report that Indian services sector climbed back into expansion zone in March, helped by the flow of new work, encouraging companies to hire at the fastest pace in seven years.

On the global front, European markets were trading in red in early deals despite Britain’s economy chalked up solid productivity growth in the last three months of 2017 to record its strongest six months in more than a decade. Asian markets exhibited mixed trend on Friday, as trade tensions returned to the fore after Trump said that he had instructed US trade officials to consider $100 billion in additional tariffs on China, fuelling the trade dispute between the world’s two economic superpowers.

Back home, stocks related to fast moving consumer goods (FMCG) space remained on buyers’ radar on report that FMCG firms are expected to post a net revenue growth of 11.8% in the March quarter, highest in the past 18 quarters, on acceleration in volume growth, GST-led savings and higher leverage benefits. Aviation stocks InterGlobe Aviation (Indigo) and SpiceJet closed in green on airlines global body, IATA’s (International Air Transport Association) report that India’s domestic air passenger demand surged 22.9% in February, more than two-fold of the global average, propelled by the launch of new flights and routes by the local airlines during the period. The fertilizer stocks were buzzing in today’s trade on ICRA’s report that the demand for fertilizers in the first half of the current financial year is likely to remain stable on the outlook for normal monsoon and higher farm income. The prices of various phosphatic fertilizers are also expected to remain stable for the upcoming year on higher subsidy.

Finally, the BSE Sensex gained 30.17 points or 0.09% to 33,626.97, while the CNX Nifty was up by 6.45 points or 0.06% to 10,331.60.

The BSE Sensex touched a high and a low of 33,697.51 and 33,501.37, respectively and there were 16 stocks on gaining side as against 15 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index surged 0.65%, while Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.94%, Oil & Gas up by 0.83%, PSU up by 0.66%, Consumer Durables up by 0.62% and Bankex was up by 0.59%, while Telecom down by 1.29%, TECK down by 0.70%, Capital Goods down by 0.52%, IT down by 0.51% and Metal was down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 0.97%, Tata Steel up by 0.92%, Sun Pharma up by 0.91%, Maruti Suzuki up by 0.88% and Adani Ports & SEZ up by 0.81%. On the flip side, Bharti Airtel down by 2.17%, Larsen & Toubro down by 1.31%, Infosys down by 1.31%, Bajaj Auto down by 0.98% and Indusind Bank down by 0.50% were the top losers.

Meanwhile, citing global best practices, the Reserve Bank of India (RBI) has decided to switch back to the gross domestic product (GDP)-based measure to offer its growth estimates from the gross value added (GVA) model. GVA gives a picture of the state of economic activity from the producers' side or supply side, while the GDP model gives the picture from the consumers' side or demand perspective. From January 2015, the government had started analysing growth estimates using GVA model and had also changed the base year to 2018 from January.

Deputy Governor Viral Acharya has said that the switch to GDP is mainly to conform with international practice, for ease of comparison. He also said that globally, the economic health of a country is gauged in terms of GDP. He pointed out that this approach is also followed by multilateral institutions, international analysts and investors, and primarily they all stick to this norms because it facilitates easy cross-country comparisons.

Acharya further stated that even the Central Statistical Office (CSO) has started using GDP as the main measure of economic activities since January 15 this year. So, he noted that even though there are good economic reasons to employ GVA as the supply side measure of economic activity, they have decided to switch to GDP-based model.

The CNX Nifty traded in a range of 10,350.45 and 10,290.85. There were 25 stocks in green as against 25 stocks in red on the index.

The top gainers on Nifty were Lupin up by 2.83%, BPCL up by 2.54%, Titan up by 1.99%, HPCL up by 1.65% and Adani Port & SEZ up by 1.34%. On the flip side, Bharti Airtel down by 2.53%, Infosys down by 1.74%, Vedanta down by 1.72%, HCL Tech down by 0.99% and Coal India down by 0.99% were the top losers.

The European markets were trading in red; Germany’s DAX decreased 57.1 points or 0.46% to 12,248.09, France’s CAC dropped 22.12 points or 0.42% to 5,254.55 and UK’s FTSE 100 was down by 11.56 points or 0.16% to 7,187.94.

Asian stocks closed mixed on Friday as worries about a global trade war intensified and investors waited for cues from the US Labor Department's closely-watched monthly jobs report for March due out later in the day. US employment is expected to increase by 198,000 jobs in March after spiking by 313,000 jobs in February. The unemployment rate is expected to dip to 4.0 percent after holding at 4.1 percent for five straight months. Gold edged up and the dollar faltered after US President Donald Trump said he has instructed his trade officials to consider $100 billion in additional tariffs on China. Japanese shares fell as the yen rose against the dollar in view of Trump's new tariff threat. Meanwhile, markets in China and Taiwan were closed for public holidays.