Post Session: Quick Review

Indian equity benchmarks traded in green for most part of the day but ended with modest cut of around one tenth of a percent. Selling during the last hour of trade weighed by banking stocks pulled the benchmarks below neutral line. The market breadth was in favour of declines with two stocks advancing against three declining ones. Indian equity benchmarks marked optimistic start and turned flat in early deals. The street took some support after the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) maintained its forecast for India’s gross domestic product (GDP) growth at 7.4% for 2018 and 7.8% for 2019. It noted that India would re-emerge as one of the fastest growing major economies with growth picking up after falling sharply in the second quarter of 2017, due to factors such as demonetization and goods and services tax (GST). Separately, Union Minister Suresh Prabhu said that the commerce and industry ministry is working on different areas such as improving standards of products and identifying new markets and goods to promote the country’s exports. He said the ministry is also working on ways to promote shipments in Africa as the region holds huge potential.

Additionally, investors took note that companies in Sweden, the largest Nordic economy in Europe is committing a fresh 1.1 billion dollars investment in India led by some of its major companies Volvo, IKEA, AstraZaneca amongst others. Carsten Gronblad, the Trade commissioner to India said that having committed $1.5 billion in the past three years, the additional investment that is lined up will be for the next two years. Separately, a foreign brokerage report said that following normal monsoon forecast, the Reserve Bank of India is expected to go for a 25 basis points rate cut in key rates in its policy review meet in August. The report added that normal rains should help to push rural demand, especially after a relatively poor rabi harvest.

However, selling crept in the last hour of trade weighed by banking stocks after RBI Deputy Governor NS Vishwanathan defended 1-day default clause of February 12 circular, saying default is a lagging indicator and not a leading indicator of financial stress. Bankers need to be proactive before borrowers become stressed. February 12 circular doesn’t require unanimity among bankers to resolve stressed assets. He further added that individual bankers can negotiate independently & with other banks to prevent default and he denies that February 12 framework mandated unanimity across lenders. Also, a foreign brokerage house highlighted that India’s economy will be hit hard by a combination of a global tariff war and the US Federal Reserve’s monetary tightening cycle. A tariff war will reduce exports and lead to imported inflation, which will hurt Indian purchasing power and investments. That could mean as much as 2.3 percent of missed GDP growth for India by 2022.

Meanwhile, majority of sugar stocks closed in red after Indian Sugar Mills Association (ISMA) said that sugar production in the current season up to April 15, has crossed the expected levels and the Indian sugar industry has already produced 299.80 lakh tonne. It added that the actual sugar production up to April 15 is already 50 lakh tonne more than the estimated sugar consumption for the whole season up to September 30. Mixed reactions were witnessed in shares of hotel companies amid expectations of the holiday season bringing in robust demand, which will result in higher room rates and increased occupancy.

On the global front, Asian markets closed mostly in green. China’s better-than-expected economic growth in the first quarter of this year was backed by a pickup in construction and manufacturing. According to data released by the National Bureau of Statistics, the construction and manufacturing sector grew 6.3% from a year earlier, accelerating from a 5.7% pace in the fourth quarter. The European markets were trading mostly in green as investors monitored a fresh batch of corporate earnings and economic data.

Back home, oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) closed in red as oil prices edged up lifted by a reported fall in US crude inventories and the ongoing risk of supply disruptions.

The BSE Sensex ended at 34360.97, down by 34.09 points or 0.10% after trading in a range of 34270.04 and 34591.81. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.04%, while Small cap index was down by 0.35%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 1.64%, Metal up by 0.68%, Telecom up by 0.54%, Basic Materials up by 0.48% and Realty up by 0.42%, while Consumer Durables down by 1.20%, Bankex down by 0.75%, Energy down by 0.63%, Oil & Gas down by 0.51% and PSU down by 0.50% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 3.01%, Wipro up by 2.54%, Tata Steel up by 1.08%, Bharti Airtel up by 1.08% and Adani Ports & Special Economic Zone up by 0.82%. (Provisional)

On the flip side, Axis Bank down by 2.53%, Mahindra & Mahindra down by 1.40%, IndusInd Bank down by 0.95%, Hero MotoCorp down by 0.93% and Coal India down by 0.83% were the top losers. (Provisional)

Meanwhile, with an aim to protect the domestic players and to discourage cheap imports, the government may impose anti-dumping duty on imports of Ethylene Vinyl Acetate (EVA) Sheet used in solar modules from China, Malaysia, Saudi Arabia, South Korea and Thailand, as the anti-dumping investigation is already in the process on this product.

The Directorate General of Antidumping and Allied Duties (DGAD) which administers the anti-dumping and countervailing measures in India, has initiated an investigation into the alleged dumping and consequent injury to the domestic industry, to determine the existence, degree and effect of alleged dumping and to recommend the amount of antidumping duty, which if levied, would be adequate to remove the injury to the domestic industry.

RenewSys India had filed an application before the Authority for imposition of Anti-dumping duty on imports of EVA Sheet. The period of investigation is from October 01, 2016 to September 30, 2017. However, for the purpose of analyzing injury, the data of previous three years, i.e. FY15, FY16 and  FY17 and the period of investigation will be considered.

The CNX Nifty ended at 10536.65, down by 12.05 points or 0.11% after trading in a range of 10509.70 and 10594.20. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were ITC up by 3.38%, Wipro up by 2.90%, Ultratech Cement up by 2.29%, Zee Entertainment up by 2.22% and GAIL India up by 2.01%. (Provisional)

On the flip side, HPCL down by 3.03%, Axis Bank down by 2.75%, Titan Co down by 1.98%, Lupin down by 1.75% and Tech Mahindra down by 1.54% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 52.13 points or 0.72% to 7,278.18, France’s CAC increased 9.53 points or 0.18% to 5,363.07 and Germany’s DAX decreased 9.87 points or 0.08% to 12,575.70.

Asian equity markets ended mostly in green on Wednesday on an upbeat note as American firms posted strong quarterly earnings and tensions eased on the Korean Peninsula. US President Donald Trump said the United States is engaged in direct talks at ‘extremely high levels’ with North Korea to try to set up a summit in the next two months. Chinese shares ended higher after the People's Bank of China lowered the reserve requirement ratio for most commercial banks in a bid to free up funds for lending and improve liquidity. In another development, China said it would allow full foreign ownership of automakers in five years, ending restrictions that helped to fuel its dispute with Washington. Japanese shares rallied as the yen weakened on hopes for improved relations between the US and North Korea. Investors also digested trade data and kept an eye on the US-Japan summit talks. Japan posted a merchandise trade surplus of 797.3 billion yen in March up 32.1 percent on year. That exceeded expectations for 499.2 billion yen and was up sharply from 3.4 billion yen in February.