Post Session: Quick Review

Indian equity benchmarks traded on lackluster note throughout the day and ended with modest gains. Buying during the second half of the trade helped Nifty and Sensex surpass their crucial psychological levels of 10,400 and 33,900 levels respectively. The street consolidated ahead of corporate earnings that will start later in the week and macro data due tomorrow. Indian equity benchmarks made a cautious start and traded in red terrain in early deals. The markets were under pressure on account of profit booking and due to higher crude prices. Overall higher crude oil prices are negative for the country like India that imports more than 80% of its oil requirement. The sentiments were also under pressure on foreign brokerage report that the trend of earnings downgrade for Indian equities that began three years ago is not showing signs of abating despite growth in the three quarters to December 2017. The report highlighted that the consensus estimate for the earnings per share (EPS) of the MSCI India index for 2018 is lowered by 10.3% since December 2016. On the other hand, the EPS estimate of the MSCI Asia ex-Japan index has increased by 13.6%.

Meanwhile, oil marketing companies (OMCs) i.e., Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) closed in red after Brent crude hit four-year high. There were reports that the government has asked the OMCs to absorb Rs 1 per litre price hike. The higher crude prices were on account of tensions linked to Syria which raised the potential for disruptions to Middle East crude output. Separately, Saudi Arabia wants to get oil prices near $80 a barrel to pay for the government’s crowded policy agenda and support the valuation of state energy giant Aramco before an initial public offering.

However, markets entered into green territory as buying crept in the second half of the day with Asian Development Bank’s (ADB) report highlighting that growth in the Indian economy is expected to rebound to 7.3% in the fiscal year 2018 and will accelerate further to 7.6% in 2019. It added that the country’s Gross Domestic Product (GDP) grew 6.6% in the fiscal year 2017 due to the lingering effects of demonetization in 2016, businesses adjusting to a new tax regime in 2017, and subdued agriculture. Some relief also came from World Economic Forum’s (WEF) statement that India can play a pivotal role in shaping the global fourth Industrial revolution as over half of its population is under the age of 27. The WEF has already partnered with the Indian government to set up the Centre for the Fourth Industrial Revolution India in Mumbai. Separately, a private report showed that digital transformation in the country is expected to contribute about $154 billion to India’s GDP by 2021. The report added that within the next four years, it is estimated that nearly 60% of India’s GDP will have a strong connection to the digital transformation trends.

On the global front, Asian markets closed mostly in green as trade ties between Washington and Beijing were on the mend gave way to questions about the next phase of the diplomatic tit-for-tat between the two countries. China’s factory-gate inflation cooled to a 17-month low in March, probably indicating an ebbing in demand and backing expectations of a broader slackening in economic growth this year as authorities extend a clamp-down on financial risks. The European markets were trading in red. British manufacturing output fell unexpectedly in February, its first month-on-month drop in almost a year, adding to signs the economy may have slowed in the first quarter.

Back home, majority of banking stocks were under pressure in today’s trade taking cues from Fitch Ratings which downgraded the viability rating of the Punjab National Bank (PNB) to ‘bb-’ from ‘bb’ and maintained the rating on Rating Watch Negative (RWN) following a multi-crore fraud involving diamond trader Nirav Modi. The agency added that other ratings were unaffected by this downgrade but it expressed doubts whether the bank management would be able to address the fraud quickly. Separately, the finance ministry is soon expected to take stock from state-run lenders on fraud in cases of bad loans and the measures taken to prevent them.

The BSE Sensex ended at 33934.20, up by 53.95 points or 0.16% after trading in a range of 33750.74 and 33981.54. There were 19 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.26%, while Small cap index was up by 0.17%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.63%, IT up by 1.45%, TECK up by 1.28%, Consumer Durables up by 0.93% and Auto up by 0.46%, while Oil & Gas down by 2.27%, PSU down by 1.73%, Bankex down by 0.71%, Utilities down by 0.52% and Energy down by 0.43% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 3.01%, Sun Pharma up by 2.39%, Reliance Industries up by 1.41%, Kotak Mahindra Bank up by 1.00% and Infosys up by 1.00%. (Provisional)

On the flip side, Yes Bank down by 2.33%, Adani Ports & Special Economic Zone down by 2.29%, SBI down by 2.22%, ICICI Bank down by 1.87% and Axis Bank down by 1.03% were the top losers. (Provisional)

Meanwhile, with an aim to help India become a $5 trillion economy, the commerce ministry has said that the government is working on an action plan to increase the growth rate at the district level by 3-4 percent per annum by accelerating economic activities.

The Ministry has said that the government’s focus will be on converging government and private initiatives, and introducing mechanism for handholding and mentoring. Besides, it mentioned about  various plans to achieve this aim such as few districts including Sindhudurg, Ratnagiri, Varanasi and Vishakhapatnam, across different states will be selected in phase 1 of the pilot project and profile of the districts will be created, identifying strengths and local resources, to incorporate it with different sectors and verticals.

Commerce and Industry Minister Suresh Prabhu also expressed the need of a bottom-up approach to push growth further and noted that districts should be considered as planning and execution units, which will be facilitating change at micro level. He also directed the officials to create an Action Plan in this regard at the earliest.

The CNX Nifty ended at 10414.20, up by 11.95 points or 0.11% after trading in a range of 10355.60 and 10428.15. There were 26 stocks advancing against 24 stocks declining on the index. (Provisional)

The top gainers on Nifty were Vedanta up by 4.65%, TCS up by 2.81%, Sun Pharma up by 2.56%, Eicher Motors up by 2.26% and HCL Tech up by 1.99%. (Provisional)

On the flip side, HPCL down by 7.91%, BPCL down by 7.80%, Indian Oil Corporation down by 6.83%, Adani Ports & Special Economic Zone down by 2.47% and Yes Bank down by 2.35% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 5.18 points or 0.07% to 7,261.57, Germany’s DAX decreased 31.67 points or 0.26% to 12,365.65 and France’s CAC decreased 13.75 points or 0.26% to 5,293.81.

Asian stocks closed mostly in green on Wednesday, trading in a narrow range after overnight gains following conciliatory comments on trade by Chinese President Xi Jinping. Xi's pledge to cut tariffs on imported cars and improve intellectual property protection was seen as a step toward easing trade tensions. Hong Kong stocks rose for the fourth session, as China’s pledge to open its financial sector further gave additional relief to investors after President Xi Jinping’s commitment to reform on Tuesday eased fears of a Sino-US trade war. Though, Japanese shares fell for the first time in three sessions amid reports that US President Donald Trump is considering more aggressive strike in Syria within the next 48 hours.