Benchmarks end in green on late hour buying

Thursday turned out to be a fabulous day of trade for Indian equity benchmarks with frontline gauges recapturing their crucial 34,700 (Sensex) and 10,600 (Nifty) levels. Markets started the session on positive note as sentiments remained upbeat on report that India’s global trade increased by 16.32% to $767.9 billion in 2017-18. According to the Commerce Department data, in 2016-17, the trade stood at $660.2 billion. The data further highlighted that while India’s global trade grew by 16.32% between FY17 and FY18, India’s total trade with LAC (Latin American countries) grew by 19.63%. It said that bilateral trade with LAC including Bolivia, Peru, Chile and Brazil has recorded healthy growth in 2017-18 as per the provisional numbers. Traders also got some support with report 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% in the first half of this year. Meanwhile, India has inked a loan agreement of $125 million with World Bank’s investment arm to fund ‘Innovate in India for Inclusiveness’ project.

Buying which took place in final hour of trade helped markets to end near intraday high levels on account of roll-over of long position in Futures & Options (F&O) segment. Some support also came with report that the agriculture ministry has targeted a record 283.7 million tonnes of foodgrain production in 2018-19, about 6 million tonnes or 2% higher than the estimated 277.5 million tonnes produced the year before. If these targets are met, it would mean the third straight year of food production surpassing the previous year’s record. Meanwhile, bolstering the government’s credentials on job creation, for the first time, payroll data released by the Employees’ Provident Fund Organisation (EPFO) and the National Pension System (NPS) showed at least 2.2 million formal jobs were added over the six months to February. The EPFO data shows 3.1 million new additions across age groups over this period.

Higher opening in European markets too aided sentiments as investors monitored a fresh batch of corporate earnings. European Commission President Jean-Claude Juncker said that he anticipated Greece could emerge from its bailout later this year without any precautionary credit line set aside for the country. However, Asian markets exhibited mixed trend as concerns over rising bond yields tempered investors’ optimism on the earnings front.

Back home, the street took note of foreign brokerage report that the Reserve Bank of India (RBI) is expected to hike key policy rates by 25 basis points in June, largely on account of sharp increase in crude oil prices over the last few months. The report added that higher global crude oil prices are net negative for the Indian economy in almost all aspects - inflation, fiscal deficit, current account deficit, rupee etc. - and may need a pre-emptive response from the central bank to reduce pipeline risks and strengthen domestic and external macro stability. Mixed reactions were witnessed in banking stocks after RBI data showed that banks’ credit rose 11.52% year-on-year to Rs 84,78,459 crore in the fortnight ended April 13. In the same period ended April 14, 2017, banks advances were at Rs 76,01,970 crore. In the previous fortnight ended March 30, 2018, banks loans grew by 10.32% to Rs 86,50,714 crore from Rs 78,41,466 crore in the period ended March 31.

Finally, the BSE Sensex surged 212.33 points or 0.62% to 34,713.60, while the CNX Nifty was up by 47.25 points or 0.45% to 10,617.80.

The BSE Sensex touched a high and a low of 34,747.97 and 34,505.62, respectively and there were 18 stocks on gaining side as against 13 stocks on losing side on the index.

The broader indices ended mixed; the BSE Mid cap index slipped 0.02%, while Small cap index was up by 0.25%.

The top gaining sectoral indices on the BSE were FMCG up by 1.25%, IT up by 1.17%, Bankex up by 0.86%, TECK up by 0.59% and Consumer Durables was up by 0.43%, while Telecom down by 2.57%, Realty down by 0.77%, Capital Goods down by 0.51%, PSU down by 0.36% and Healthcare was down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 8.26%, Hindustan Unilever up by 2.17%, TCS up by 2.09%, Indusind Bank up by 1.62% and ITC up by 1.61%. On the flip side, Bharti Airtel down by 2.61%, Dr. Reddy’s Lab down by 2.09%, Wipro down by 2.00%, SBI down by 1.71% and Tata Steel down by 1.22% were the top losers.

Meanwhile, credit growth of banks grew by 11.52 percent year-on-year to Rs 84,78,459 crore in the fortnight ended April 13, 2018. According to latest data from the Reserve Bank of India (RBI), the advances had stood at Rs 76,01,970 crore in the same fortnight ended April 14, 2017. In the previous fortnight ended March 30, 2018, banks loan growth had grown at 10.32 percent to Rs 86,50,714 crore from Rs 78,41,466  crore in the period ended March 31, 2017.

As per the data, it indicated that in the period ended April 13, the bank deposits increased by 7.96 percent to Rs 113,77,729 crore from Rs 105,38,304 crore in the year-ago period. It also showed that in the fortnight ended March 30, the deposits had increased by 6.66 percent to Rs 1,14,74,989 crore from Rs 1,07,57,656 crore in the year-ago period.

The data further highlighted that in February 2018, non-food bank credit increased by 9.8 percent on a year-on-year basis as against an increase of 3.3 percent in February 2017. It noted that credit to agriculture and allied activities increased by 9 percent in February 2018, same as in February 2017.

The CNX Nifty traded in a range of 10,628.40 and 10,559.65. There were 29 stocks in green as against 21 stocks in red on the index.

The top gainers on Nifty were Yes Bank up by 10.12%, Indusind Bank up by 2.02%, Hindustan Unilever up by 1.98%, ITC up by 1.70% and TCS up by 1.55%. On the flip side, Bharti Airtel down by 3.08%, Lupin down by 2.66%, Bharti Infratel down by 2.50%, Wipro down by 2.39% and SBI down by 1.67% were the top losers.

The European markets were trading in green; UK’s FTSE 100 gained 14.93 points or 0.2% to 7,394.25, Germany’s DAX rose 17.7 points or 0.14% to 12,440.00 and France’s CAC was up by 23.69 points or 0.44% to 5,436.99.

Asian equity markets ended mixed on Thursday as concerns over rising bond yields tempered investors' optimism on the earnings front. Traders also awaited rate decisions from both the European Central Bank and the Bank of Japan. Chinese shares ended lower amid growing fears of a trade war with the United States. Meanwhile, Japanese shares rose amid widespread gains in the technology sector following upbeat earnings results from the likes of Texas Instruments, Facebook and AMD.