Post Session: Quick Review

Indian equity benchmarks traded on a weak note throughout the day and ended with cut of around four tenth of a percent. Selling during second half dragged the markets lower with Sensex slipping below 34,500 mark. Investors awaited more corporate earnings that are scheduled to be announced over next one month and Karnataka elections due next month for further directions. Indian equity benchmarks made a pessimistic start and traded lower in early deals following feeble global cues. The street took note that a rise in global crude oil cost to around $75 per barrel lifted the domestic retail petrol to become dearer by 13 paise to Rs 74.63 per litre from Monday’s cost of Rs 74.50 per litre. Petrol prices climbed to new multi-year highs in other major metro cities -- Kolkata, Mumbai and Chennai -- at Rs 77.32, Rs 82.48 and Rs 77.43 per litre respectively on Tuesday. Diesel prices, too, touched record levels in Delhi, Kolkata, Mumbai and Chennai. They rose to Rs 65.93, Rs 68.63, Rs 70.20 and Rs 69.56 per litre respectively. Separately, India is likely to face greater pressure to eliminate duties on 90% of goods it trades with China under the mega trade agreement among 16 Asia Pacific countries that is in the works.

However, some buying crept in on private brokerage report stating that Indian economy is expected to witness a cyclical recovery driven by investments as well as consumption, and the average GDP growth is expected to rise to 7.8 percent in the first half of this year. The report added that investment and consumption demand are the main drivers for India’s growth, amid worsening net exports. It expects average GDP growth to rise to 7.8 percent year-on-year in the first half 2018 from 7.2 percent in October-December 2017. Separately, Ashish Kumar Bhutani, joint secretary in Ministry of Agriculture stated that agriculture credit is growing every year and reached Rs 10 lakh crore last fiscal, while stressing upon the need to increase the flow to small farmers as well as providing loan access to tenant cultivators. Bhutani said Rs 6.8 lakh crore was short-term crop loans out of Rs 10 lakh crore credit disbursed last fiscal. In the short-term crop loans, he said 50 per cent amount was provided to small and marginal farmers. Additionally, Union Commerce and Industry Minister Suresh Prabhu said that the government has finalized a new industrial policy with a major focus on promoting setting up of industrial units in rural areas. But, markets once again witnessed selling pressure and entered red terrain as some concerns came with the National Stock Exchange’s (NSE) data report which signaled a weak demand for government bonds among FPIs, an auction of investment limits for debt securities received bids worth Rs 20,712 crore against Rs 26,002 crore bonds put on offer. Traders took note of a private report stating that the private equity (PE) investments into the country’s real estate sector declined by 19% year on year in financial year 2017-18. The report added that the decline in PE investment could reflect turbulence in the real estate sector.

Meanwhile, on the sectoral front, mixed reaction were seen in telecom stocks after the telecom tribunal stayed a regulatory order that reset the threshold for predatory pricing and required operators to report all tariffs in the interests of transparency and non-discrimination, offering relief to India’s top telcos that said the revised norms benefitted only Reliance Jio Infocomm, their newest rival. Mumbai based realty companies DB Realty, Indiabulls Real Estate and Peninsula Land closed in green after Chief minister Devendra Fadnavis approved the Scrutiny Committee Report on the Mumbai Development Plan 2034. The Development Plan (DP) is a crucial document in determining the city’s land use and infrastructural development for the next 20 years. The DP-2034 will pave the way for accelerated growth of Mumbai city. It proposes to unlock about 3,734 hectares of public and privately owned lands - currently tagged as no development zones (NDZ) - to push low-cost housing and augment social amenities.

On the global front, Asian markets closed in red. Japan’s central bank is not expected to change settings at its policy review this week, but the debut of a dovish new deputy could widen a rift between advocates of continued stimulus and those wary of the rising costs of prolonged easing. The European markets were trading in red. The German government has lowered its economic growth forecast for this year to 2.3 percent from 2.4 percent previously.

Back home, Information Technology (IT) stocks closed on firm note as the rupee weakened to a fresh 13-month low against the American currency on bouts of month-end dollar demand from importers amid crude price volatility and rising US bond yields. The continued selling by FII in local equity and debt, and weak stock market also weighed on the rupee. Select logistics stocks were buzzing for second consecutive day. The GST collection trends for last month and this month are showing a lot of traction. Logistics and packaging could be the biggest gainers of this centralization process and that could be one of the reasons why the stocks rose.

The BSE Sensex ended at 34494.32, down by 122.32 points or 0.35% after trading in a range of 34400.56 and 34631.27. There were 11 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.55%, while Small cap index was down by 0.78%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.15%, TECK up by 0.92%, Telecom up by 0.44% and Realty up by 0.13%, while Metal down by 1.52%, Oil & Gas down by 1.42%, Consumer Durables down by 1.21%, Basic Materials down by 1.16% and Capital Goods down by 1.14% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 2.98%, TCS up by 2.33%, Mahindra & Mahindra up by 1.78%, Power Grid up by 0.97% and Yes Bank up by 0.56%. (Provisional)

On the flip side, Tata Steel down by 2.05%, ICICI Bank down by 1.99%, ONGC down by 1.81%, Tata Motors - DVR down by 1.65% and IndusInd Bank down by 1.63% were the top losers. (Provisional)

Meanwhile, underlining efforts of the Centre and state governments to improve the standard of living of people by linking them to small scale industries, Union Commerce and Industry Minister Suresh Prabhu has said that a new industrial policy has been finalized by the government and its major focus will be on encouraging setting up of industries in rural areas.

The minister noted that this industrial policy would also emphasis on linking of self help groups and co-operative institutions with small scale industries and with global supply chain and added that the progress of the country lies in the development of all the villages. He also listed benefits of the government’s other various schemes such as Gram Swaraj Abhiyan and Ayushman Bharat Yojana and noted that the government is also taking efforts to provide all the schemes to every household in the country.

Prabhu said under Gram Swaraj Abhiyan, activities are being undertaken across the country so that the last person in the society gets the information about government schemes and they could take the benefit of schemes. Under Ayushman Bharat Yojana, the government would bear the cost of hospital expenses of BPL families’ members also.

The CNX Nifty ended at 10565.45, down by 48.90 points or 0.46% after trading in a range of 10536.45 and 10612.60. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 2.90%, TCS up by 2.37%, Mahindra & Mahindra up by 1.72%, Power Grid up by 1.36% and HCL Tech up by 0.76%. (Provisional)

On the flip side, GAIL India down by 3.09%, Vedanta down by 2.99%, HPCL down by 2.83%, Hindalco down by 2.32% and Tata Steel down by 1.93% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 50.86 points or 0.68% to 7,374.54, Germany’s DAX decreased 194.64 points or 1.55% to 12,356.18 and France’s CAC decreased 34.7 points or 0.64% to 5,409.46.

All the Asian markets closed in red on Wednesday. China’s central bank said its prudent and neutral monetary policy will remain unchanged after it cuts the cash banks must hold as reserves on Wednesday, a move allowing lenders to pay back loans obtained via its medium-term lending facility. The People’s Bank of China said there will be no change in overall liquidity, and the cut in bank reserves will help improve the liquidity structure of the financial system. South Korea’s finance minister said that the government is closely watching currency markets as the won and other emerging currencies are weakening against the US dollar.