Benchmarks eke out slender gains on Monday

In a very volatile day of trade, Indian equity benchmarks somehow managed to keep their head above water on Monday, as traders remained on sidelines ahead of an informal meeting between Prime Minister Modi and China’s Xi Jinping and developments around the impeachment notice against Chief Justice of India Dipak Misra. After making a cautious start, markets gained traction and traded in fine fettle for most part of the day as traders took some support with Reserve Bank of India (RBI) Governor Urjit Patel’s statement that India’s real GDP growth is expected to expand at 7.4% in 2018-19, with risks evenly balanced. He added that several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained. Some support also came with Economic Affairs Secretary Subhash Chandra Garg’s statement that India is poised to remain as the fastest growing large economy in the world. In 2018, we expect India to grow at over 7.4%. He added that India’s GDP is expected to reach a volume of $5 trillion by FY2025 by leveraging on digitisation, globalisation, favourable demographics and structural reforms. Adding to the optimism, IMF said Global investors feel that the Indian elephant is ready to run after sustained economic reforms.

However, markets took U-turn and traders pared almost all of their early gains as sentiments turned cautious with 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. Some concerns also came with a report that with the Reserve Bank giving no relaxation to its February 12 framework on resolution of stressed assets, banks are likely to become more cautious and risk-averse to long-term funding, especially to the infrastructure sector. Anxiety spread on the street , as foreign investors have pulled out nearly Rs 8,000 crore from the Indian capital markets so far this month due to considerable volatility in global markets on account of the ongoing trade negotiations and firming up of bond yields.

On the global front, European markets were trading in red as investors reacted to fresh corporate earnings, while keeping an eye on geopolitics and oil. Asian markets ended mostly lower as selloff in technology shares and rising US bond yields tempered investors’ optimism over easing geopolitical risks.

Back home, traders took note of Economist Intelligence Unit (EIU) report stating that a high-octane trade dispute between the world’s two largest economies -- the US and China -- will harm global trade this year as it would give rise to protectionism. Meanwhile, the International Monetary Fund said that the world’s debt load has ballooned to a record $164 trillion, a trend that could make it harder for countries to respond to the next recession and pay off debts if financing conditions tighten. On the sectoral front, stocks related to steel sector remained under pressure despite report that India’s crude steel output is expected to soar by 38 per cent to 140 million tonnes (MT) by the end of this year. Meanwhile, 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.

Finally, the BSE Sensex surged 35.19 points or 0.10% to 34,450.77, while the CNX Nifty was up by 20.65 points or 0.20% to 10,584.70.

The BSE Sensex touched a high and a low of 34,663.95 and 34,259.27, respectively and there were 15 stocks on gaining side as against 16 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.49%, while Small cap index up by 0.53%.

The top gaining sectoral indices on the BSE were Realty up by 1.78%, Healthcare up by 1.29%, Consumer Durables up by 0.68%, IT up by 0.67% and Telecom was up by 0.64%, while Metal down by 0.90%, FMCG down by 0.43%, Basic Materials down by 0.23% and Utilities down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.63%, Mahindra & Mahindra up by 2.74%, Sun Pharma up by 1.74%, Asian Paints up by 1.72% and Yes Bank up by 1.49%. On the flip side, HDFC Bank down by 1.42%, Tata Motors - DVR down by 1.15%, Coal India down by 0.98%, Hero MotoCorp down by 0.93% and ICICI Bank down by 0.85% were the top losers.

Meanwhile, Economic Affairs Secretary Subhash Chandra Garg has 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. Looking at its steady growth rate, he said that India's economy could grow at over 7.4 percent in the year 2018. Giving an overview of the South Asian countries - Bhutan, Nepal, Bangladesh and Sri Lanka - he said that India continued to be a beacon of growth in the region.

Garg has stated that in the last few years, India has undertaken big bang structural reforms toward formalisation of the economy and fostering digital financial inclusion. He also indicated that India had expanded at an average of 7.2 percent per annum in the last four years and was continuing on the sustainable growth trajectory. Besides, he believed that transformational reforms such as Goods and Services Tax (GST), and initiatives such as Insolvency and Bankruptcy code, recapitalisation of banks, and unclogging of infrastructure investments will support such elevated growth. Elaborating further, he said that India has accorded high priority to addressing its infrastructure deficit to sustain economic growth. He mentioned that government has taken several steps to mobilise funds from various sources, including from capital market, for development of infrastructure, which includes, inter alia, launching of innovative financial vehicles.

Noting that India rolled out the GST regime in July 2017, Economic Affairs Secretary said that within a short span of eight months, monthly revenue collections from GST have crossed $12.7 billion. He also highlighted that the number of dealers registered in the GST database increased by about four million in the fiscal year of the roll-out which is about 60 per cent higher than unique assesses registered earlier in the VAT network in the country. Besides, he said that India’s massive leap in the Ease of Doing Business rankings from 142 in 2014 to 100 in 2017 is testimony to India’s commitment to long-term reforms for an open and vibrant economy. He added that this is also reflected in strong FDI inflows which have grown from $34.3 billion in 2012-13 to $60.1 billion in 2016-17.

The CNX Nifty traded in a range of 10,514.95 and 10,638.35. There were 27 stocks in green as against 23 stocks in red on the index.

The top gainers on Nifty were Indusind Bank up by 3.74%, Mahindra & Mahindra up by 2.95%, BPCL up by 2.65%, Cipla up by 2.03% and Sun Pharma up by 1.98%. On the flip side, Hindalco down by 2.71%, Indiabulls Housing Finance down by 2.51%, UPL down by 1.80%, Vedanta down by 1.39% and Grasim Industries down by 1.33% were the top losers.

The European markets were trading in red; Germany’s DAX decreased 20.8 points or 0.17% to 12,519.70, France’s CAC shed 7.28 points or 0.13% to 5,405.55 and UK’s FTSE 100 was down by 3.71 points or 0.05% to 7,364.46.

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.