Benchmarks resume northward journey; Sensex reclaims 34,400 mark

Indian equity benchmarks resumed northward journey after a day’s break and ended in green terrain with frontline gauges recapturing their crucial 34,400 (Sensex) and 10,550 (Nifty) levels. Markets traded in green terrain throughout the session as traders took some encouragement with International Monetary Fund’s (IMF) statement that the debt level is relatively high in India, but the authorities are planning to bring it down over the medium term with the right policies. In fiscal year 2017-18, India is planning to continue with the consolidation in the current fiscal year and over the medium term. Also, IMF in its Fiscal Monitor report titled ‘Capitalising on Good times’, said that India should now fully implement the new nationwide indirect tax to avoid tax revenue underperformance resulting in cuts to capital expenditures. Traders also took some support from a private poll which showed that 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.

Markets also got some support with a private report stating that the Reserve Bank of India is expected to go for a 25 basis points rate cut in key rates, due to normal monsoon forecast from Indian Meteorological Department. Traders shrugged off former finance minister P Chidambaram’s statement that the ghost of demonetisation has come back to haunt the government and alleged that the Rs 2,000 notes were printed only to help hoarders. In the wake of cash crunch in some parts of the country, he also said there was a possibility that people have lost confidence in the banking system due to the bank scams and they were not putting their surplus money into the banks.

Firm opening in European counters too aided sentiments, with dealers awaiting key retail sales data in Britain. Asian markets rallied on Thursday after 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.

Back home, shares of metal companies edged higher 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. Export oriented stocks remained buzzing after Commerce and Industry Minister Suresh Prabhu assured exporters of taking up the issue of GST refund with the finance ministry and said he plans to call a ministerial meeting to discuss export related issues. 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.

Finally, the BSE Sensex surged 95.61 points or 0.28% to 34,427.29, while the CNX Nifty was up by 39.10 points or 0.37% to 10,565.30.

The BSE Sensex touched a high and a low of 34,478.82 and 34,358.91, respectively and there were 16 stocks on gaining side as against 14 stocks on losing side, while one stock remained unchanged on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.63%, while Small cap index up by 0.60%.

The top gaining sectoral indices on the BSE were Metal up by 4.46%, Basic Materials up by 2.76%, Capital Goods up by 1.06%, IT up by 0.92% and TECK up by 0.88%, while Oil & Gas down by 1.31%, Consumer Durables down by 0.86%, Energy down by 0.59%, PSU down by 0.37% and Bankex was down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.17%, Yes Bank up by 2.83%, Bharti Airtel up by 2.64%, Larsen & Toubro up by 1.74% and Power Grid Corporation up by 1.61%. On the flip side, Axis Bank down by 0.91%, Coal India down by 0.77%, Kotak Mahindra Bank down by 0.69%, Sun Pharma down by 0.61% and Hero MotoCorp down by 0.58% were the top losers.

Meanwhile, Commerce and Industry Minister Suresh Prabhu has promised exporters of taking up the Goods and Service Tax (GST) refund issue with the Finance Ministry. He said exporters have claimed that over 60 percent of their refunds are still stuck with the government and also complained that the delay in GST refund has blocked their working capital. In order to address the issues, he has asked exporters to provide details of pending refund.

The minister has said that apart from refunds, exporters also raised issues related to increasing logistics costs and inadequate infrastructure at ports. Further, he indicated that the government has sanctioned GST refunds to exporters to the tune of Rs 17,616 crore till March. He noted that of this, Rs 9,604 crore is on account of integrated GST refund and another Rs 5,510 crore is on a ccount of refund on input credit. He added that another Rs 34,000 crore has been refunded on account of duty drawback and Rebate of State Levies (ROSL).

Prabhu further stated that Federation of Indian Export Organisations (FIEO) is of the view that the refund filing mechanism should be made fully online and the pending GST refund released immediately to help exporters tide over the cash crunch. Besides, he asked FIEO members to prepare a detailed action plan of all sectors and sub-sectors suggesting ways to promote their exports. He said that the Centre is also involving States to further boost the country’s exports. He also informed that a ministerial meeting would be held to discuss issues pertaining to outbound shipments.

The CNX Nifty traded in a range of 10,572.20 and 10,546.20. There were 30 stocks in green as against 20 stocks in red on the index.

The top gainers on Nifty were Hindalco up by 8.81%, Vedanta up by 6.65%, Tata Steel up by 3.29%, Yes Bank up by 2.89% and Bharti Airtel up by 2.64%. On the flip side, BPCL down by 7.11%, HPCL down by 5.62%, Indian Oil Corporation down by 4.09%, Titan down by 2.57% and HDFC down by 0.89% were the top losers.

The European markets were trading in green; Germany’s DAX rose 1.03 points or 0.01% to 12,591.86, France’s CAC increased 12.3 points or 0.23% to 5,392.47 and UK’s FTSE 100 was up by 20.18 points or 0.28% to 7,337.52.

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.