Benchmarks end higher; Sensex reclaims 34,600 mark

Indian equity benchmarks ended the Tuesday’s trade on an optimistic note with frontline gauges recapturing their crucial 34,600 (Sensex) and 10,600 (Nifty) levels. Markets made positive opening and traded with traction as sentiments remained up-beat with World Bank’s statement that India retained the top position as recipient of remittances with its diaspora sending about $69 billion back home last year. Remittances to India picked up sharply by 9.9 per cent, reversing the previous year’s dip, but were still short of $70.4 billion received in 2014. Some support also came with report that exports from special economic zones (SEZs) grew by about 15 percent to Rs 5.52 lakh crore in 2017-18. Export Promotion Council for EoUs and SEZs (EPCES) said that while the goods export from these zones stood at Rs 2.74 lakh crore in 2017-18, shipments of services aggregated to Rs 2.78 lakh crore in the last fiscal. Meanwhile, the government has finalised the new industrial policy, which is set to be announced soon. The new policy will replace the industrial policy of 1991 which was prepared in the backdrop of balance of payment crisis.

However, some amount of profit booking witnessed in afternoon session as traders turned anxious on the Petroleum and Natural Gas Ministry report which estimated that India’s crude oil import bill may increase 20% to $105 billion in this financial year from $88 billion in 2017-18, assuming average crude oil price of $65 per barrel for the year, about $9 a barrel less than the current rate. Markets once again got some strength in late trade with traders getting support from report that the Goods and Services Tax (GST) collections for March exceeded Rs 96,000 crore by April 23, the largest mop-up for any month since the comprehensive indirect tax’s launch in July last year. The report added that March collections could cross the coveted Rs 1 lakh crore mark by April-end, as payments are still being made by a section of taxpayers with late penalties. Some support also came with a report stating that several Thailand-based companies which are operating in India plan to invest around $3 billion in the next three years period in the areas of green and brown field projects including energy, infrastructure and metals.

Firm opening in European counters too aided sentiments as investors monitored the latest deluge of corporate earnings. German business confidence deteriorated for a fifth consecutive month in April, a survey indicated, in a further sign that Europe’s biggest economy is losing some of its momentum. Asian markets exhibited mixed trend as investors waited to see if the dollar’s rally was sustainable. Inflation worries are also mounting as oil and commodity prices have been rising in recent weeks.

Back home, metal stocks lost some shine as investors turned cautious of falling aluminium prices. National Aluminium Company (NALCO) and Hindalco Industries plunged in today’s trade in line with a steep fall in the metal prices overseas. Shares of Information Technology (IT) companies remained under pressure as investors were cautious on reports that the Trump administration is planning to end allowing spouses of H1-B visa holders to work legally in the US. However, shares logistics companies rallied by up to 20% on bourses after the Gati said it exploring the possibility of inducting a new financial/strategic partner.

Finally, the BSE Sensex surged 165.87 points or 0.48% to 34,616.64, while the CNX Nifty was up by 29.65 points or 0.28% to 10,614.35.

The BSE Sensex touched a high and a low of 34,706.71 and 34,465.49, respectively and there were 18 stocks on gaining side as against 13 stocks on losing side on the index.

The broader indices ended in red; the BSE Mid cap index slipped 0.02%, while Small cap index was down by 0.13%.

The top gaining sectoral indices on the BSE were Energy up by 2.39%, Oil & Gas up by 1.50%, Capital Goods up by 0.65%, Healthcare up by 0.45% and Bankex was up by 0.40%, while Metal down by 1.82%, IT down by 1.69%, TECK down by 1.48%, Basic Materials down by 1.01% and Power was down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.70%, Yes Bank up by 3.31%, Mahindra & Mahindra up by 1.94%, Adani Ports up by 1.74% and ICICI Bank up by 1.66%. On the flip side, Wipro down by 3.30%, Infosys down by 2.49%, Tata Steel down by 1.23%, SBI down by 0.87% and TCS down by 0.87% were the top losers.

Meanwhile, an informal ministerial panel has explored options like levying a cess on sugar to the tune of 5 percent, production-linked subsidy of about Rs 4.5 per kg and reduction of GST on ethanol from 18 percent to 5 percent, in order to help sugar mills in clearing dues worth Rs 19,000 crore to sugarcane farmers. A high-powered panel of ministers led by Transport Minister Nitin Gadkari discussed all the three proposals and a formal cabinet note on them is expected to be made soon. 

Food Minister Ram Vilas Paswan has said that there was also a suggestion that certain percentage of ethanol blending should be made mandatory to boost ethanol production. He noted that the government has already doubled import duty on sugar to 100 percent from 50 percent and scrapped export duty to check sliding domestic prices. In addition, he said that the government has also asked mills to compulsorily export 2-4 million tonnes (MT) of sugar.

According to industry body Indian Sugar Mills Association (ISMA), India’s sugar production in the current season up to April 15, has touched an all-time high of 29.98 MT on higher cane output, leading to a surge in arrears to farmers at over Rs 20,000 crore. It also said that sugar production of India, the world's second-largest producer after Brazil, stood at 20.3 MT in the 2016-17 marketing year (October-September). The annual domestic demand is estimated at 25 MT. ISMA had said sugar prices have been under severe pressure in the last 4-5 months and have fallen by Rs 9 per kg across the country. It added that as compared to the cost of production, the current ex-mill sugar prices are around Rs 8 per kg lower and the sugar mills are incurring substantial losses.

The CNX Nifty traded in a range of 10,636.80 and 10,569.00. There were 27 stocks in green as against 22 stocks in red, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Reliance Industries up by 3.64%, Yes Bank up by 3.50%, Bajaj Finserv up by 2.52%, Mahindra & Mahindra up by 1.73% and ICICI Bank up by 1.68%. On the flip side, Hindalco down by 7.37%, Wipro down by 3.50%, Infosys down by 2.80%, Tech Mahindra down by 2.75% and Vedanta down by 2.51% were the top losers.

The European markets were trading in green; UK’s FTSE 100 rose 23.53 points or 0.32% to 7,422.40, Germany’s DAX increased 52.08 points or 0.41% to 12,624.47 and France’s CAC was down by 2.48 points or 0.05% to 5,436.07.

Asian equity markets ended mixed on Tuesday as the underlying sentiments remained cautious amid renewed concerns over US interest rate hikes and ahead of a potential meeting in Beijing between officials from the world's largest and second-largest economies. Chinese stocks ended up after a top decision-making body of the ruling Communist Party said the country would strive hard to achieve this year's economic targets in the face of rising global trade tensions. Further, Japanese shares ended higher as a weaker yen on the back of increasing bond yields in the US helped lift exporters.