Post Session: Quick Review

Indian equity benchmarks traded on a firm trade throughout the day and ended with gain of around four tenth of a percent. The positive closing was despite China stepping up its attacks on the Trump administration over billions of dollars worth of threatened tariffs, saying Washington is to blame for frictions and repeated that it was impossible to negotiate under current circumstances. The market breadth was in favour of advances with 3 stocks advancing against two declining ones. Indian equity benchmarks made a positive start and traded in fine fettle in early deals as sentiments were upbeat on the World Economic Situation and Prospects 2018 report of the United Nations, which enlightened that the Indian economy is projected to grow at 7.2% in 2018-19 and 7.4% in 2019-20. The report indicates that the outlook for India remains largely positive, underpinned by robust private consumption and public investment as well as ongoing structural reforms. Separately, industry CII welcomed the launch of the E-way Bill system for inter-state movement of goods under Goods and Service Tax (GST), saying it will pave the way for widening of the tax base, reduce logistics costs, and faster movement of goods. The industry body added that the major relief to industry and business is in hassle-free movement of goods across state borders under GST by removing the state barriers, which is a milestone for improvement in ease of doing business.

Meanwhile, Finance Minister Arun Jaitley said that the Indian economy, which saw temporary disruptions caused by demonetization and the roll-out of the Goods and Services Tax (GST) over the past two years, will see consolidation in the current fiscal. Jaitley added that reforms such as GST, Insolvency and Bankruptcy Code and new income tax regulations are contributing to a better investment climate. Investors took note of Economic Affairs Secretary Subhash Chandra Garg’s statement that India will need to create and develop a very healthy and supportive macro-economic environment to become $10 trillion economy by the year 2030. He also said that the present government has taken number of bold steps like GST and Insolvency and Bankruptcy Code (IBC). Garg has stated that the government is working on an overseas investment policy with an aim to provide support to Indian businesses which will invest abroad.

However, traders booked some of their early gains amid CRISIL’s report that India Inc’s revenue growth will slow down to 9 percent in the January to March period on base effects, while the profit margins will shrink to a 12-quarter low of 18.6 percent. The report added that the pre-tax profit margins will contract by up to 0.70 percent, but the pace of contraction is now reducing. Separately, pharma stocks were under pressure on domestic brokerage report that the troubled pharma sector is expected to report weak Q4FY18 numbers, with PAT likely to decline by 9 per cent (year-on-year) and appreciation in rupee may put pressure on realizations.

On the global front, Asian markets closed in green. China stepped up its attacks on the Trump administration over billions of dollars worth of threatened tariffs. The comments come after US President Donald Trump on Sunday predicted China would take down its trade barriers, and expressed optimism that both sides could resolve the issue through talks. Japan’s swelling current-account surplus in February may be good news for the country’s finances, but not so much for its relationship with the US. The European markets were trading in green. Investors’ morale in the euro zone deteriorated for the third month in April, a survey showed, on concerns about a slowdown in global growth as trade tensions rise between the United States and China.

Back home, telecom stocks Bharti Airtel, Idea Cellular and Reliance Communications closed in red as the industry body COAI expects earnings of mobile operators to remain depressed for another 3-4 quarters, hurt by the sheer intensity of competition in the telecom market. A recent report by the Telecom Regulatory Authority of India (TRAI) has noted that the gross revenue of telecom services providers fell 8.1%, while the licence fee collected by the government dropped by 16% year-on-year in the quarter ended December 31, 2017.

The BSE Sensex ended at 33752.30, up by 125.33 points or 0.37% after trading in a range of 33578.91 and 33846.50. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.16%, while Small cap index was up by 0.28%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.69%, Oil & Gas up by 1.42%, Energy up by 1.03%, FMCG up by 0.96% and Bankex up by 0.77%, while TECK down by 1.03%, IT down by 0.98%, Telecom down by 0.64%, Realty down by 0.26% and Healthcare down by 0.26% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 3.06%, Mahindra & Mahindra up by 2.18%, IndusInd Bank up by 2.07%, ITC up by 1.73% and Hindustan Unilever up by 1.05%. (Provisional)

On the flip side, Tata Motors - DVR down by 1.79%, Infosys down by 1.62%, Tata Motors down by 1.61%, Bharti Airtel down by 1.40% and TCS down by 1.16% were the top losers. (Provisional)

Meanwhile, the United Nations (UN) in its latest report ‘the World Economic Situation and Prospects 2018’ has said that Indian economy is likely to accelerate from 6.7 per cent in 2017 to 7.2 per cent in 2018 and 7.4 per cent in 2019. The report also indicated that the country’s outlook remains largely positive with robust private consumption, public investment and ongoing structural reforms.

The report noted that some South Asian economies, notably India, are implementing tax reforms to strengthen their tax revenues, but further efforts are needed to significantly improve the capacity to implement counter-cyclical policies across the region. It also highlighted the India’s intensifying policy efforts to attract FDI. However, it said that the anaemic performance of private investment remains a key macroeconomic concern for the country. It found that the share of Gross fixed capital formation in GDP got decreased to less than 30% in 2017 from about 40% in 2010, on the back of subdued credit growth, low capacity utilization in some industrial sectors and balance sheet problems in the banking and corporate sectors and in view of this, it expressed need of vigorous public investment to boost overall investment growth.

On monetary policy front, UN is expecting some degree of uncertainty over the monetary policy stance in India and added that subdued inflation and good monsoon season offers scope for additional monetary easing. Besides, the report said that strong demand for oil is expected from the world’s three largest energy consumers - China, India and the United States.

The CNX Nifty ended at 10372.10, up by 40.50 points or 0.39% after trading in a range of 10328.50 and 10397.70. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 3.65%, Axis Bank up by 3.45%, HPCL up by 3.40%, Hindalco up by 3.27% and Indian Oil Corporation up by 3.10%. (Provisional)

On the flip side, Zee Entertainment down by 2.18%, Lupin down by 2.00%, Tata Motors down by 1.66%, Infosys down by 1.38% and Bharti Airtel down by 1.29% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 11.69 points or 0.16% to 7,195.33, Germany’s DAX increased 109.04 points or 0.89% to 12,350.31 and France’s CAC increased 22.96 points or 0.44% to 5,281.20.

Asian stocks closed in green on Monday as the focus turned to the upcoming earnings season in the US. While trade rhetoric continued between the US and China, investors looked ahead to the release of US and Chinese inflation data as well as comments from the US Federal Reserve, European Central Bank and the Bank of Japan for directional cues. Chinese shares ended higher as investors awaited Chinese President Xi Jinping's Tuesday speech at the Boao Forum for directional cues. Also, Hong Kong shares rose on hopes that China and the United States will eventually reach a deal to avert a trade war, even as Beijing repeated that it was impossible for negotiations to take place under current conditions. Furthermore, Japanese shares reversed initial losses to end higher as the dollar pushed higher against the yen and traders awaited Bank of Japan governor Haruhiko Kuroda's speech later in the day as he starts his second term.