Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day and ended with modest gains. The market breadth was in favour of declines with two stocks advancing against three declining ones. Technology stocks outperformed benchmark indices taking advantage of the falling rupee and ahead of Infosys March quarter earnings due tomorrow. The fall in rupee is always a good for software services providers which receive maximum income through exports to US, Europe etc. Indian equity benchmarks traded marginally in green in early deals. The sentiments were upbeat after a foreign brokerage report highlighted that FDI inflows have increased by 34% to an average of $10.2 billion quarterly since the NDA-government assumed power in 2014. The report added that India remains a preferred destination for global investors. Separately, an American conservative public policy think tank, the Heritage Foundation in its latest annual Index of Economic Freedom 2018 has placed Indian economy at 130th position with economic freedom score of 54.5. The country has jumped up 13 places in the last one year. The country in 2017 was ranked 143rd among 180 countries with a score of 52.6 points.

Some support also came with the International Monetary Fund’s (IMF) report stating that it is optimistic on the outlook for global growth but warned darker clouds are looming due to fading fiscal stimulus and rising interest rates. The trade conflict between the United States and China is creating significant uncertainty for businesses and their global supply chains. The street shrugged off a study published in RBI’s monthly bulletin that India’s social sector spending remains woefully below peers, including Latvia and Iceland, in terms of GDP. The social sector expenditure primarily constitutes health and education in India. The conclusion is based on an analysis of 17 countries, including India, with respect to their social sector expenditure as percent of GDP (2016).

Meanwhile, aviation stocks i.e., Jet Airways, InterGlobe Aviation and SpiceJet closed in green taking support from International Air Transport Association’s (IATA) statement that India is on track to register 50 straight months of double-digit domestic air passenger growth in October 2018 as the near term outlook remains bright. IATA also said that it continues to expect India to surpass the UK as the world’s third largest origin-destination market by the mid-2020s. Separately, public sector banking stocks were under pressure in today’s trade on report that the recent crisis in the country’s banking system has impacted investors’ sentiments, leading to some slowdown in the investment flow. The crisis, however, gives an opportunity to improve the overall processes and to build up a strong system. Separately, the Reserve Bank has ruled out any relaxation in bad loan rules, saying the tough norms will discipline borrowers and prevent banks from pushing distressed loans under the carpet.

On the global front, Asian markets closed mostly in red. China’s commerce ministry said that the country is well prepared and will not hesitate to fight back if the United States escalates its trade spat with Beijing, adding Chinese President Xi Jinping’s pledge to cut import tariffs is not a concession. The European markets were trading in red. Euro zone industrial production was much weaker than expected in February, data showed, as a surge in energy output failed to offset a slump in the production of capital goods and consumer goods.

Back home, most of the sugar stocks closed in red on report that the food ministry has no immediate plans to give subsidy to sugarcane growers for bailing out cash-starved sugar mills, and it asked factories to export 2 million tonnes sweetener, even at loss, to liquidate surplus stock and improve domestic prices.

The BSE Sensex ended at 34103.78, up by 163.34 points or 0.48% after trading in a range of 33924.88 and 34177.44. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.11%, while Small cap index was down by 0.26%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 3.24%, TECK up by 2.56%, Bankex up by 0.32%, Capital Goods up by 0.13% and Auto up by 0.04%, while Realty down by 1.69%, Metal down by 1.36%, Telecom down by 0.82%, Healthcare down by 0.67% and Basic Materials down by 0.65% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 4.03%, Infosys up by 3.54%, Axis Bank up by 1.29%, Tata Motors - DVR up by 0.90% and ICICI Bank up by 0.84%. (Provisional)

On the flip side, Dr. Reddy’ Lab down by 1.77%, Tata Steel down by 1.65%, Bharti Airtel down by 1.26%, Adani Ports & Special Economic Zone down by 1.24% and SBI down by 1.13% were the top losers. (Provisional)

Meanwhile, India’s central banking institution, the Reserve Bank of India (RBI) in its latest ‘Union Budget 2018-19: An Assessment’ study has said that the country’s social sector expenditure, primarily constituting health and education continues to remain woefully below peers, in terms of Gross Domestic Product (GDP). The RBI concluded this on the basis of analysis of 17 countries – India, Korea, Latvia, Iceland, Israel, Ireland, Estonia, Slovak Republic, Czech Republic, Poland, Hungary, Slovenia, Portugal, Spain, Greece, Italy and Belgium. 

As per the study, India spent lowest on social sectors at 7.5% of GDP in 2016, while Belgium spent highest at 29.0% of GDP in 2016, followed by Italy 28.9% and Greece 27.0%. The study report noted that the expenditure on health and education together is budgeted to grow by 4.6% as per the 2018-19 Budget, on the back of the National Health Protection Scheme under the 'Ayushman Bharat' programme and the education system reforms.

The RBI study further said that capital expenditure which is growth inducing has been proposed to be raised by 9.9% in 2018-19 over the revised estimates (RE) of 2017-18, marking a decline of 3.0% when compared with Budget Estimate (BE) of 2017-18. Besides, it found that Capital Outlay (capital expenditure excluding loans and advances) is budgeted to increase by 12.6% in 2018-19, a marginal rise over BE but sharply higher than 1.6% in 2017-18 (RE) and Capital outlay on major infrastructure is estimated to grow by a robust 23.0% in 2018-19 (BE) - as against a decline of 2.1% in 2017-18 (RE) - led by the railways, roads and bridges.

The CNX Nifty ended at 10453.05, up by 35.90 points or 0.34% after trading in a range of 10395.25 and 10469.90. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech up by 4.10%, TCS up by 4.01%, Infosys up by 3.62%, Tech Mahindra up by 3.03% and Axis Bank up by 1.17%. (Provisional)

On the flip side, Vedanta down by 2.43%, Lupin down by 2.11%, Dr. Reddy’s Lab down by 1.94%, Tata Steel down by 1.64% and Sun Pharma down by 1.56% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 2.49 points or 0.03% to 7,254.65, Germany’s DAX decreased 0.97 points or 0.01% to 12,293.00 and France’s CAC decreased 1.62 points or 0.03% to 5,276.32.

The Asian markets closed mostly in red on Thursday, on escalating Middle East tensions. People’s Bank of China Governor Yi Gang said economic indicators have performed better than expected in the first quarter, amid continued improvement in the global economic outlook. South Korea’s central bank held interest rates steady, as expected, with inflation running more slowly than forecast and exports showing a modest improvement. The Bank of Korea’s Monetary Policy Board voted to keep the benchmark interest rate at 1.50 percent, leaving its monetary policy setting unchanged since raising it in November from a record-low 1.25 percent.