Post Session: Quick Review

Indian equity benchmarks traded choppy in a range bound session throughout the day and ended with modest gains. The market breath was mildly in favour of advances with one stock advancing against each declining ones. Indian equity benchmarks made an optimistic start and traded in green in early deals. The street took some support from private poll that showed India will claim the top spot among the world’s fastest-growing major economies this year, but rising trade tensions between the United States and China may restrain that growth. The recent tit-for-tat import tariffs imposed by the US and China have raised concerns about a full-fledged global trade war which could throw an otherwise-strong world economy off-course. The latest poll, taken April 11-18, predicted India’s economy will expand 7.4 percent in the fiscal year that began this month. Separately, International Monetary Fund (IMF) in its Fiscal Monitor report titled ‘Capitalising on Good times’, has said that India, which recovered from the adverse effects of demonetization and implementation of goods and services tax (GST) regime, should now fully implement the new nationwide indirect tax to avoid tax revenue underperformance resulting in cuts to capital expenditures. It added that the country has quite a high debt to GDP ratio, but the government is trying to lower it using the right policies.

Meanwhile, shares of metal companies were buzzing in today’s trade as investors’ cheered uptick in global metal prices. Aluminium touched its highest in nearly seven years on Wednesday amid growing supply concerns in the aftermath of US sanctions on Rusal, while nickel hit a three-year peak amid fears over additional Russian sanctions. Separately, the World Steel Association (worldsteel) said that global steel demand is expected to reach 1,616.1 million tonne (MT) in 2018. The report added that in India, the demand is expected to accelerate gradually, mainly driven by public investment.

However, oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) extended their yesterday’s loss as oil prices edged up. The Organization of the Petroleum Exporting Countries, Russia and several other producers began to reduce supply in January 2017 in an attempt to erase a glut. They have extended the pact until December 2018 and meet in June to review policy. Saudi Arabia has emerged as OPEC’s leading supporter of measures to boost prices. Separately, as per foreign brokerage report a further rise in oil prices could damage investors’ sentiment and raise twin deficit fears. The report added that the twin deficit issues could re-emerge with current account deficit moving up to 3 per cent of the Gross Domestic Product and fiscal risks to the tune of 40-50 basis points of GDP.

On the global front, Asian markets closed in green. China’s commerce ministry said that the country is well prepared to handle any negative effects from its trade dispute with the United States, adding that Beijing’s tariff hikes on US imports will not have a big impact overall on its domestic industries. The European markets were trading mostly in green. UK retail sales slumped in March, raising concerns about the strength of the British economy. Retail sales fell 1.2% in March. Year-over year, retail sales rose 1.1% from 1.5% the previous month.

Back home, mixed reactions were witnessed in aviation stocks amid sharp surge in Brent crude oil futures. Aviation turbine fuel (ATF) or jet fuel prices are directly linked to international crude oil prices and a surge in crude prices will escalate the operating expenses of aircraft carriers. Separately, aviation regulator, the Directorate General of Civil Aviation (DGCA) has indicated that the Indian airlines have registered 28.03% growth in domestic passengers during the month of March.

The BSE Sensex ended at 34442.11, up by 110.43 points or 0.32% after trading in a range of 34358.91 and 34478.82. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.58%, while Small cap index was up by 0.59%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 4.45%, Basic Materials up by 2.68%, Capital Goods up by 1.02%, IT up by 0.86% and TECK was up by 0.82%, while Oil & Gas down by 1.21%, Consumer Durables down by 0.98%, Energy down by 0.58% and PSU was down by 0.27% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 3.24%, Yes Bank up by 3.12%, Bharti Airtel up by 2.53%, Larsen & Toubro up by 2.00% and Power Grid up by 1.76%. (Provisional)

On the flip side, Coal India down by 0.72%, Axis Bank down by 0.66%, Maruti Suzuki down by 0.58%, Sun Pharma down by 0.54% and Asian Paints down by 0.50% were the top losers. (Provisional)

Meanwhile, International Monetary Fund (IMF) Deputy Director Abdel Senhadji has praised Indian government’s efforts to lower debt, saying that the country has relatively high debt to GDP ratio at 70 per cent of the GDP in 2017 but the government is trying to bring it down over the medium term with the right policies.

The IMF official further listed India’s various targets such as federal deficit of three percent over the medium term and a debt ratio of 40 per cent over the medium term at the federal level, which corresponds to about 60 per cent at the general government level. Besides, he said that these targets are appropriate.

On the global front, Director of IMF Fiscal Affairs Department Vitor Gaspar noted that public debt is currently at historic highs in advanced and emerging market economies and average debt-to-GDP ratios, at more than 105 per cent of GDP in advanced economies, are at levels not seen since World War II. He further advised countries to avoid policies that increase economic fluctuations and also suggested to build strong public finances in good times in order to tackle looming risks.

The CNX Nifty ended at 10568.10, up by 41.90 points or 0.40% after trading in a range of 10546.20 and 10572.20. There were 30 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 8.94%, Vedanta up by 6.65%, Tata Steel up by 3.29%, Yes Bank up by 2.89% and Bharti Airtel up by 2.64%. (Provisional)

On the flip side, BPCL down by 7.10%, HPCL down by 5.62%, Indian Oil Corporation down by 3.91%, Titan Co down by 2.57% and HDFC down by 0.89% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 13.71 points or 0.19% to 7,331.05, France’s CAC increased 11.04 points or 0.21% to 5,391.21, while Germany’s DAX decreased 8.83 points or 0.07% to 12,582.00.

Asian equity markets ended in green on Thursday as trade tensions faded and commodities rallied on optimism about global economic growth. While the dollar continued to trade in a narrow range against the yen, oil prices held near 3-1/2 year highs after reports that top oil exporter Saudi Arabia would be happy to see crude prices surge up to $100 a barrel over the coming months. Chinese shares ended higher, led by gains in material and energy stocks. Further, Japanese shares hit a seven-week high after Prime Minister Shinzo Abe and US President Donald Trump said they had agreed to intensify consultations for expanding investment and trade between the two longtime allies.