Benchmarks eke out slender gains

Indian equity benchmarks ended the Wednesday’s trade slightly in green, extending their winning streak for fifth straight day. Markets started the session on cautious note and entered into red terrain in first half of the trade, as traders remained cautious ahead of quarterly earnings this week, with IT major Infosys likely to declare its March quarter results on April 13. Traders also remained watchful ahead of industrial output figures for February and retail inflation data for March slated to be released on April 12. Sentiments also remained down beat 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%.

However, bourses pared all of their losses and entered into green terrain in last leg of trade to end with marginal gains as traders took some encouragement with Asian Development Bank’s report that India is expected to bounce back to 7.3% in fiscal 2018 and firm to 7.6% in 2019 as the new tax regime improves productivity and as banking reform and corporate deleveraging take hold to reverse a downtrend in investment. Some support also came with 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. Some comfort also came with the commerce ministry’s statement that the government is working on an action plan to increase the growth rate at the district level by 3-4% per annum by accelerating economic activities.

On the global front, European markets were trading in red in early deals after 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. Asian markets ended 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.

Back home, banking stocks remained under pressure 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. Oil marketing companies like Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) edged lower after Brent crude hit four-year high. The higher crude prices were on account of tensions linked to Syria which raised the potential for disruptions to Middle East crude output.

Finally, the BSE Sensex gained 60.19 points or 0.18% to 33,940.44, while the CNX Nifty was up by 14.90 points or 0.14% to 10,417.15.

The BSE Sensex touched a high and a low of 33,981.54 and 33,750.74, respectively and there were 19 stocks on gaining side as against 12 stocks on losing side on the index.

The broader indices ended mixed; the BSE Mid cap index slipped 0.19%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Metal up by 1.62%, IT up by 1.36%, TECK up by 1.19%, Consumer Durables up by 1.02% and Auto was up by 0.51%, while Oil & Gas down by 2.23%, PSU down by 1.70%, Bankex down by 0.69%, Utilities down by 0.50% and Energy was down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.85%, Sun Pharma up by 2.50%, Hindustan Unilever up by 1.73%, Reliance Industries up by 1.37% and Mahindra & Mahindra up by 1.24%. On the flip side, Adani Ports & SEZ down by 2.42%, SBI down by 2.26%, Yes Bank down by 2.26%, ICICI Bank down by 1.66% and Axis Bank down by 1.19% were the top losers.

Meanwhile, the Finance Ministry has set up a 13-member steering committee to consider all proposals received from ministries and departments for raising extra budgetary resources (EBR) to meet the resource gap for funding infrastructure, health, education and other social sector projects.

The steering committee, headed by Economic Affairs Secretary, will assess the requirement of project funds, progress of schemes and availability of budgetary resources. Thereafter, it will decide on the aggregate amount of EBR to be raised and the model of raising it including the institution for raising resources and determine a broad calendar for the EBR programme.

The department of economic affairs (DEA) has asked all the ministries and departments concerned to finalise the requirement of EBRs in 2018-19 for projects as announced in the Union Budget 2018-19 and send the proposal to it for consideration of the steering committee. The panel has secretaries from different ministries as members, besides Chairman of NABARD and Managing Director of IIFCL.

The CNX Nifty traded in a range of 10,428.15 and 10,355.60. There were 26 stocks in green as against 24 stocks in red on the index.

The top gainers on Nifty were Vedanta up by 4.59%, TCS up by 2.46%, Sun Pharma up by 2.31%, HCL Technologies up by 2.20% and Eicher Motors up by 2.19%. On the flip side, BPCL down by 7.92%, HPCL down by 7.88%, Indian Oil Corporation down by 6.92%, Adani Ports & SEZ down by 2.39% and SBI down by 2.24% were the top losers.

The European markets were trading in red; Germany’s DAX declined 85.41 points or 0.69% to 12,311.91, France’s CAC decreased 29.62 points or 0.56% to 5,277.94 and UK’s FTSE 100 was down by 22.61 points or 0.31% to 7,244.14.

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.