Post Session: Quick Review

Indian equity benchmarks traded firmly for most part of the day and ended with minor gains. The benchmarks erased most of their gains in last hour of trade with Metals and FMCG stocks weighing on the markets sentiments. The market breath was in favour of advances with one stock advancing against each declining one. Indian equity benchmarks made cautious start but gained traction afterwards. The sentiments were upbeat taking cue from the Reserve Bank of India (RBI) Governor Urjit Patel’s statement who expressed hope that India’s pace of economic growth will accelerate in the fiscal year 2018-19. He noted that the country’s economy turned in a resilient performance in 2017-18. He also said that on the whole, real gross domestic product (GDP) growth is expected to expand at 7.4% in FY19, with risks evenly balanced and added that global demand has been improving, which should encourage exports and boost fresh investments. Separately, Economic Affairs Secretary Subhash Chandra Garg said that India is poised to remain world’s fastest-growing large economy and it is on track to doubling the size of its economy to $5 trillion by the year 2025, as the economic reforms adopted over last few years and started yielding positive results. Additionally, a top IMF official said that global investors feel that the Indian elephant is ready to run after sustained economic reforms, but underlined the need for implementing these reforms and having a sound banking sector balance sheet for a steady growth path.

However, selling crept in as the street took note off a report which highlighted that high-octane trade dispute between the world’s two largest economies -- China and the US -- will harm global trade this year as it would give rise to protectionism. The report, however, noted that a full-blown trade war - where there is an exchange of tariff or non-tariff barriers that causes significant economic pain to both sides - will be averted, for both economic as well as political reasons. Separately, foreign investors have pulled out nearly Rs 8,000 crore from the Indian capital markets so far in April due to considerable volatility in global markets on account of the ongoing trade negotiations and firming up of bond yields. This comes following an inflow of Rs 11,654 crore in equities last month and an outflow of over Rs 9,000 crore from the debt markets.

Meanwhile, a private report stated that Merchandise exports hit a three-year high in 2017-18 but slowing growth in shipments of manufacturing goods and raw materials, collateral impact of a global trade war, unfavourable base effect for roughly half the year and temporary discomfort to traders due to last month’s ban on the widely-used letters of undertakings (LoUs) pose risks to export growth in the current fiscal year. The market participants took note of PHD Chamber’s report that roadblocks such as delay in GST refunds and after effects of note ban hit India's export prospects in 2017-18 amid a revival in global demand mainly in key markets of the US and the EU.

On the global front, Asian markets closed mostly in red. Japanese manufacturing activity expanded at a faster pace in April than the previous month as output and domestic demand picked up, in a sign the economy is recovering from an expected rough patch in the first quarter. Bank of Japan Governor Haruhiko Kuroda said that the central bank must continue with accommodative monetary easing for some time to meet its 2 percent inflation target. European markets were trading in red as investors reacted to fresh corporate earnings, while keeping an eye on geopolitics and oil.

Back home, IT bellwether TCS closed in green after creating history by becoming the first Indian listed company to hit the coveted $100 billion m-cap figure. ICICI Bank closed in red as the probe agencies are examining if the bank should have declared three companies - Pacific Capital Services; Supreme Energy (SEPL) and Pinnacle Energy - as related parties. These companies were involved in transfers of shareholdings in NuPower Renewables (NRPL), a company owned by Deepak Kochhar, husband of Chanda Kochhar, the bank’s CEO.

The BSE Sensex ended at 34445.24, up by 29.66 points or 0.09% after trading in a range of 34259.27 and 34663.95. There were 16 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.55%, while Small cap index was up by 0.57%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.91%, Healthcare up by 1.34%, Consumer Durables up by 0.65%, IT up by 0.63% and Consumer Disc up by 0.62%, while Metal down by 1.00%, FMCG down by 0.44%, Basic Materials down by 0.24%, Capital Goods down by 0.13% and Utilities down by 0.01% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were IndusInd Bank up by 3.42%, Mahindra & Mahindra up by 2.49%, Sun Pharma up by 1.79%, Asian Paints up by 1.69% and Yes Bank up by 1.59%. (Provisional)

On the flip side, HDFC Bank down by 1.46%, Tata Motors - DVR down by 1.20%, Coal India down by 0.91%, ICICI Bank down by 0.89% and Hindustan Unilever down by 0.85% were the top losers. (Provisional)

Meanwhile, praising the government for doing well in the area of reforms, the Director of the International Monetary Fund’s (IMF) Asia and Pacific Department, Changyong Rhee has said that global investors feel that the Indian elephant is now ready to run after four years of impressive economic reforms. However, he pointed out that the country need to implement these reforms and should have a sound banking sector balance sheet for a steady growth path.

Changyong Rhee noted that Indian economic growth is higher than China and added that many countries are looking at India, whether India can be another growth leader as China in recent decades. He is also expecting that the India’s improving economy would maintain global and regional growth, as China's growth rate has come down. However, he said that India has to open up more with the high growth and added that the country has to have more international linkages.

IMF’s director also said that they hope continued momentum in structural reforms during the election period, noting that this will determine India's future. Besides, he said that once the elephant starts running, it would have a positive impact on the global economy.

The CNX Nifty ended at 10582.10, up by 18.05 points or 0.17% after trading in a range of 10514.95 and 10638.35. There were 28 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were IndusInd Bank up by 3.85%, Mahindra & Mahindra up by 3.06%, BPCL up by 2.65%, Cipla up by 2.03% and Sun Pharma up by 1.98%. (Provisional)

On the flip side, Hindalco down by 2.71%, Indiabulls Housing down by 2.51%, UPL down by 1.80%, Grasim Industries down by 1.47% and Vedanta down by 1.39% were the top losers. (Provisional)

The European markets were trading on red; UK’s FTSE 100 decreased 1.13 points or 0.02% to 7,367.04, Germany’s DAX decreased 22.41 points or 0.18% to 12,518.09 and France’s CAC decreased 7.13 points or 0.13% to 5,405.70.

Asian equity markets ended mostly in red on Monday as selloff in technology shares and rising US bond yields tempered investors’ optimism over easing geopolitical risks. Chinese stocks closed on a flat note as tech stocks sold off on smartphone maker ZTE Corp's US woes. Japanese shares ended lower as technology stocks followed their US peers lower and investors digested North Korea's pledge to halt nuclear tests and intercontinental missile launches ahead of summits with the US and South Korea.