Benchmarks continues Bull Run; Sensex recaptures 34,300 mark

Indian equity benchmarks continued winning streak and once again ended in green for the eighth day in a row, with frontline gauges recapturing their crucial 34,300 (Sensex) and 10,500 (Nifty) levels. Markets started the session on pessimistic note as geopolitical concerns linger and focus gradually shifts to corporate earnings. Traders also remained concerned with report that India’s merchandise exports fell for the first time in five months in March and the trade deficit widened amid concerns over global trade, and US moves to review a programme allowing duty-free imports of goods. India’s merchandise exports in March fell 0.7% year-on-year to $29.1 billion, and the trade deficit widened to $13.7 billion. Imports rose 7.2% on year to $42.8 billion in March. Sentiments also weighed down on report that investments through Participatory notes (P-notes) plunged to nearly nine-year low of Rs 1.06 lakh crore in the capital market at March-end amid stringent norms put in place by the regulator SEBI to check misuse of these instruments. According to the SEBI data, total value of P-note investments in Indian markets -- equity, debt, and derivatives -- slumped to a low of Rs 1,06,403 crore at March-end from Rs 1,06,760 crore at the end of the preceding month. Prior to that, the figure was Rs 1.19 lakh crore.

Markets pared all of their losses to enter into green terrain with report highlighting that India’s inflation on wholesale level softened slightly in the month of March, in line with easing retail inflation, aided by fall in prices of food articles, mainly pulses and vegetables. The Wholesale Price Index (WPI)-based inflation came in at 2.47% for March 2018, the lowest since July 2017. Some support also came with Indian Meteorological Department’s (IMD) statement that the south-west monsoon is likely to be 97% of the long period average (LPA), implying normal summer rains. Skymet, a private forecasting agency, has also predicted normal monsoon this year. The Met will release its next official forecast in June. Adding to the optimism, Asian Development Bank (ADB) said that India can achieve over 8% growth rate in a sustained manner if it takes steps to revive investments and make exports competitive.

Positive opening in European markets too aided sentiments as tensions eased in the Middle East. Asian markets exhibited mixed trend on Monday, as worries about slowing growth in China and higher interest rates offset easing concerns about the geopolitical risks over Syria.

Back home, some support also came with World Economic Forum’s (WEF) report that India is well positioned to play a key role in shaping the global fourth industrial revolution with a young labour force, a large English-speaking population and the second largest numbers of internet users. On the sectoral front, IT stocks closed in red dragged by the index heavyweight Infosys. Infosys fell as the company lowered its margin guidance to 22-24% for FY19 from 23-25% in FY18. Select banking stocks were under pressure in today’s trade as the Non-performing assets (NPAs) or bad loans in the banking sector are set to shoot up by at least Rs 8,000 crore as advances to the scam-hit Gitanjali Gems group have turned bad during the quarter ended March 31. Majority of sugar stocks closed in red on report that the government is unlikely to give any export subsidy to sugar mills even as it has asked mills to give priority to clear sugar arrears to farmers, which has mounted to more than Rs 18,000 crore.

Finally, the BSE Sensex surged 112.78 points or 0.33% to 34,305.43, while the CNX Nifty was up by 47.75 points or 0.46% to 10,528.35.

The BSE Sensex touched a high and a low of 34341.46 and 33,899.34, respectively and there were 20 stocks on gaining side as against 11 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.34%, while Small cap index up by 0.56%.

The top gaining sectoral indices on the BSE were Realty up by 1.82%, Healthcare up by 1.11%, FMCG up by 0.96%, Basic Materials up by 0.78% and Consumer Discretionary Goods & Services was up by 0.72%, while IT down by 0.78%, TECK down by 0.69%, Telecom down by 0.51%, Consumer Durables down by 0.21% and Energy was down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.02%, Kotak Mahindra Bank up by 1.88%, Adani Ports & SEZ up by 1.85%, Bajaj Auto up by 1.73% and Mahindra & Mahindra up by 1.66%. On the flip side, Tata Motors down by 4.96%, Tata Motors - DVR down by 4.59%, Infosys down by 3.10%, SBI down by 0.76% and ONGC down by 0.55% were the top losers.

Meanwhile, breaking the four months growth momentum, India’s exports fell by 0.66% in the month of March 2018 over the same period in the previous year, as shipments declined, but, the full year exports surpassed $300 billion mark. However, imports rose by 7.15% in March 2018 over the corresponding month of the previous year. Besides, the trade deficit widened to $13.69 billion in March 2018 from $10.65 billion in March 2017, on the back of higher imports, amid concerns over global trade. The overall trade deficit for April-March 2017-18 widened to $87.17 billion as compared to $47.70 billion during April-March 2016-17. 

As per the data released by the Commerce Ministry, exports decreased marginally by 0.66% to $29.11 billion in March 2018, as compared to $29.30 billion in the same month a year ago. In Rupee terms, it was down by 1.95% to Rs 189271.16 crore in March 2018, as compared to Rs 193028.91 crore in March 2017. Cumulative value of exports for the period April-March 2017-18 was $302.84 billion as against $275.85 billion, registering a positive growth of 9.78% over the same period last year. In Rupee terms, it was up by 5.56% to Rs 1952168.79 crore from Rs 1849428.76 crore.

Non-petroleum and Non Gems & Jewellery exports in March 2018 were valued at $22.42 billion as against $21.44 billion in March 2017, an increase of 4.60%. Non-petroleum and Non Gems and Jewellery exports during April-March 2017-18 were valued at $222.45 billion as compared to $200.89 billion for the corresponding period in 2016-17, an increase of 10.73%.

Imports during March 2018, increased by 7.15% to $42.80 billion as compared to $39.95 billion in March 2017, while in rupee terms it was up by 5.75% to Rs 278296.95 crore from Rs 263155.49 crore in March 2017. Cumulative value of imports for the period April-March 2017-18 was $459.67 billion as against $384.36 billion, registering a positive growth of 19.59% over the same period last year. In rupee terms, it was Rs 2962897.70 crore, up by 14.94% from Rs 2577665.59 crore in the same period last year.

Oil imports during March 2018 were valued at $11.11 billion which was 13.92% higher than oil imports valued at $9.75 billion in March 2017. Oil imports during April-March 2017-18 were valued at $109.11 billion which was 25.47% higher than the oil imports of $86.96 billion in the corresponding period last year. Non-oil imports during March 2018 were estimated at $31.69 billion which was 4.96% higher than non-oil imports of $30.20 billion in March 2017. Non-oil imports during April-March 2017-18 were valued at $350.56 billion which was 17.88% higher than the level of such imports valued at $297.39 billion in April-March, 2016-17.

The CNX Nifty traded in a range of 10,540.15 and 10,396.35. There were 34 stocks in green as against 16 stocks in red on the index.

The top gainers on Nifty were Cipla up by 5.32%, Grasim Industries up by 2.90%, Hero MotoCorp up by 2.18%, UPL up by 2.08% and NTPC up by 2.05%. On the flip side, Tata Motors down by 4.78%, Infosys down by 3.15%, Wipro down by 1.65%, SBI down by 0.78% and Titan Company down by 0.72% were the top losers.

The European markets were trading mostly in green; France’s CAC gained 0.03 points or 0% to 5,315.05 and Germany’s DAX increased 15.23 points or 0.12% to 12,457.63, while UK’s FTSE 100 was down by 26.71 points or 0.37% to 7,237.85.

Asian equity markets ended mixed on Monday as worries about slowing growth in China and higher interest rates offset easing concerns about the geopolitical risks over Syria. Investors veered around to the view that weekend missile strikes against Syria by the United States, France and Britain may be a one-off event. US President Donald Trump tweeted ‘Mission Accomplished’ on Saturday, implying that there will not be another strike soon. Hong Kong shares dropped amid worries that slowing credit growth and tightening regulatory requirements in China will hurt the country’s economic growth later in the year. Meanwhile, Chinese shares hit a fresh six-month low on concerns that mounting risks in the financial system will weigh on growth further down the road. Though, Japanese stocks rose modestly on relief that US-led strikes on Syria appeared to be a one-off event but lingering concerns about a trade war had investors flocking to defensive shares. Seoul stocks rose slightly as investors remained optimistic about the upcoming corporate earnings season.