Benchmarks extend northward journey for seventh straight session

Indian equity benchmarks extended the winning streak for seventh straight session with frontline gauges ending near their crucial 33,200 (Sensex) and 10,500 (Nifty) levels, as better than expected macro-economic data painted a positive picture of the economy. Markets started the session on an optimistic note with report that India’s industrial output grew 7.1% year-on-year in February, bigger than the expected 6.8% expansion. The cumulative growth for the period April-February 2017-18 over the corresponding period of the previous year stood at 4.3%. India’s Consumer Price Index (CPI) for the month of March came to 4.28% as compared to 4.44% in February. CPI food inflation for March also eased substantially to 2.81% versus 3.26% in last month. Traders also took some encouragement with report that the Confederation of Indian Industry (CII) is expecting India’s gross domestic product (GDP) to grow at 7.3-7.7% during the 2018-19 financial year. This is based on strengthening demand in the rural economy, including agriculture and non-farm activities, as well as better global growth climate.

However, some profit booking was seen in second half of trade with market participants paring most of their gains as some concerns came with former RBI governor Raghuram Rajan’s statement that he made it quite clear to the government that demonetisation was ‘not a good idea’ and that its implementation was not well-planned since 87.5% of the currency was being demonetised. However, markets managed to end the session in green, as some support came with global rating agency, Moody’s Investors Service in its latest report stating that the pick-up in India’s GDP growth rate is optimistic for asset-backed securities (ABS), because such growth will support the ability of borrowers to earn income and repay loans backing ABS deals, including auto loans and loans against property to micro, small and medium enterprises (MSMEs).

Firm opening in European counters too aided sentiments, as investors brace for earnings reports from US banks. The European Central Bank is finding out just how tricky its policy path could be in a year when political spats are overshadowing the economy. Asian markets ended mixed, as Chinese trade data proved to be a mixed bag and investors awaited earnings reports from JPMorgan Chase & Co, Citigroup and Wells Fargo & Co later in the day for further cues.

Back home, a private report enlightened that corporate India announced mergers and acquisitions worth $1.5 billion in March, taking the deal tally for the first quarter of 2018 to $18.53 billion. The report added that March saw 31 M&A deals worth $1,499 million, down 92% in value terms from the year-ago month when deals worth $23,822 million were announced by way of 28 such transactions. On the sectoral front, software related stocks remained buzzing as Infosys will unveil its Q4 earnings later in the day, with street expecting the IT firm to post good numbers compared to the previous year and signal better growth ahead. Banking stocks ended mostly in green taking cues from RBI data that banks credit grew at 10.32% year-on-year to Rs 86,50,714 crore in the fortnight ended March 30, 2018. In the same fortnight ended March 31, 2017, the advances had stood at Rs 78,41,466 crore.

Finally, the BSE Sensex surged 91.52 points or 0.27% to 34,192.65, while the CNX Nifty was up by 21.95 points or 0.21% to 10,480.60.

The BSE Sensex touched a high and a low of 34,313.14 and 34,103.53, respectively and there were 19 stocks on gaining side as against 12 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.46%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Metal up by 1.00%, Basic Materials up by 0.64%, Healthcare up by 0.56%, Utilities up by 0.52% and IT was up by 0.50%, while Telecom down by 0.74%, Capital Goods down by 0.33%, FMCG down by 0.30%, Oil & Gas down by 0.25% and PSU was down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 2.66%, Wipro up by 2.28%, Kotak Mahindra Bank up by 1.69%, Coal India up by 1.57% and Dr. Reddy’s Lab up by 1.37%. On the flip side, SBI down by 1.22%, Axis Bank down by 1.17%, Yes Bank down by 0.66%, Maruti Suzuki down by 0.65% and Bharti Airtel down by 0.61% were the top losers.

Meanwhile, Confederation of Indian Industry (CII) has said that India’s gross domestic product (GDP) is expected to grow in the range of 7.3-7.7 percent during the financial year 2018-19, on the back of strengthening demand in the rural economy, including agriculture and non-farm activities, as well as better global growth climate.

Sector-wise, CII projected 2.5-3.5 percent growth for the agriculture sector, 7.2-7.5 percent for the industrial sector and 8.4-8.7 percent for the services sector, with ‘construction’ and ‘trade and repairs’ to lead. CII President Rakesh Bharti Mittal has noted that there are some macro challenges like increasing oil prices, but that would be more than compensated by improving industrial performance.

Rakesh Bharti Mittal believed that the rural consumption will go up and that will help the industry in getting back investments into the manufacturing sector, and, as a whole, the manufacturing activities could go up to 7.2-7.5 percent. Though, he pointed out that the country's economic outlook was robust, risk factors remained like quality of public finances which may have an adverse impact on private investment, investment rate below 30 percent, rise in crude oil prices and rising international protectionism.

The CNX Nifty traded in a range of 10,519.90 and 10,451.45. There were 26 stocks in green as against 23 stocks in red, while one stock remained unchanged on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 2.83%, Tech Mahindra up by 2.79%, Eicher Motors up by 2.62%, Hindalco up by 2.54% and Indiabulls Housing Finance up by 2.33%. On the flip side, BPCL down by 3.02%, HCL Tech down by 2.01%, Bajaj Finserv down by 1.64%, Indian Oil Corporation down by 1.55% and State bank of India down by 1.18% were the top losers.

The European markets were trading mostly in green; France’s CAC gained 20.25 points or 0.38% to 5,329.47 and Germany’s DAX increased 82.25 points or 0.66% to 12,497.26, while UK’s FTSE 100 was down by 5.75 points or 0.08% to 7,252.59.

Asian equity markets ended mixed on Friday as Chinese trade data proved to be a mixed bag and investors awaited earnings reports from JPMorgan Chase & Co, Citigroup and Wells Fargo & Co later in the day for direction. Geopolitical tensions eased somewhat after US President Donald Trump urged caution on an imminent strike against Syria and also tweeted that the US would rejoin the controversial Trans Pacific Partnership trade pact if the deal were substantially better than the one offered to former President Barack Obama. China's exports declined unexpectedly in March, while imports grew more-than-expected, data from the General Administration of Customs showed. In dollar terms, exports fell 2.7 percent year-over-year in March, confounding economists' forecast for a notable increase of 11.8 percent. Imports surged 14.4 percent from a year ago, faster than the expected spike of 12 percent. The trade deficit came in at $4.98 billion in March, in contrast to the expected surplus of $27.5 billion. Meanwhile, Japanese shares ended higher to post third week of gains as higher US bond yields helped lift financials and exporters also surged on the back of a firmer dollar following Trump's comments on Syria and rejoining TPP.