Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day and ended with gains of more than seven tenth of a percent. Indian equity benchmarks made an optimistic start and traded with traction in early deals. The sentiments were upbeat with Confederation of Indian Industry (CII) president Rakesh Bharti Mittal’s statement that demand in the economy is picking up and it is time private investment started flowing in. He added that India’s economic environment started improving due to introduction of major reforms such as GST, Insolvency and Bankruptcy Code, and fixed-term employment. Separately, a foreign brokerage highlighted that India’s economic growth will accelerate to 7.2% in the current fiscal buoyed by manufacturing activity even as rising oil prices and high government debt remain a challenge. The report added that agriculture sector is expected to grow higher than the estimated 2.1% in the current fiscal year on account of positive prospects on Rabi harvest and a normal monsoon, contributing significantly to the national GDP. Additionally, the government’s revenue collection under the Goods and Services Tax (GST) stood at Rs 7.41 lakh crore (provisional) during the financial year 2017-18 (July 2017 - March 2018).

Some support also came after global credit rating agency Fitch affirmed India’s sovereign rating at ‘BBB-’ with stable outlook, saying that the country’s medium-term growth potential is strong. The agency added that India’s rating balances a strong medium-term growth outlook and favourable external balances with weak fiscal finances and some lagging structural factors, including governance standards and a still-difficult, but improving, business environment. It projected India’s growth at 7.3 per cent in current the fiscal and further to 7.5 per cent in 2019-20. Separately, additional Secretary in the Ministry of External Affairs A Gitesh Sarma enlightened that the Goods and Services Tax (GST) reform implemented by the government, coupled with the demonetization of high-value currency notes, has brought 1.8 million more people into the income-tax net. Apart from encouraging digital over cash transactions, India introduced the GST regime which provides for uniform taxes. He said this has led to a 50% increase in the number of indirect taxpayers.

Investors took note that China’s trade with India saw robust growth in the first quarter, with bilateral trade hitting $22.1 billion, up 15.4% year-on-year. The growth continued from the upward momentum seen last year, when bilateral trade reached a record high of $84.4 billion, up 20.3% from the previous year. By the end of 2017, Chinese investments into India added up to more than $8 billion, as India has become an important market for infrastructure cooperation among Chinese companies and a major investment destination. Realty company stocks were buzzing in today’s trade after RBI data showed that housing prices went up by an average of 7.6% in the three months ended December 2017, with highest appreciation recorded in Kochi. After Kochi, the maximum rise in housing prices was witnessed in Kanpur at 23.6%, followed by Ahmedabad (17.9%) and Jaipur (16%). Mumbai saw a price rise of 9%, Delhi (6.7%), Kolkata (5.5%), Lucknow (5%) and Chennai (1.87%).

Meanwhile, select stocks related to Non-banking finance companies (NBFC) and housing finance companies were in limelight after CRISIL in its report highlighted that wholesale credit book of these companies, which includes real estate and infrastructure lending, is likely to grow at 21% annually till 2020. The report added that asset quality in the segment has largely been stable because of robust controls, and despite an increase in infrastructure loan delinquencies. Mixed reactions were witnessed in sugar stocks. ICRA highlighted that the government support will be crucial for successful implementation of the targeted sugar exports, otherwise current low global sugar prices will render exports un-remunerative for the millers. Given a significantly higher-than-anticipated domestic sugar production for sugar year 2018 (SY2018) which resulted in a downside correction in sugar prices, to a low of Rs 28,500 per metric tonne (MT) in April 2018 (all prices quoted in this report are ex-mill UP), the government has allowed for sugar exports of 2 million MT during SY2018.

On the global front, Asian markets closed in green. Japan’s central bank kept monetary policy steady and removed a phrase on the timeframe for achieving its 2 percent inflation target, suggesting it is no rush to reach its elusive price goal with the economy in good shape. As widely expected, the Bank of Japan maintained a pledge to guide short-term interest rates at minus 0.1 percent and the 10-year bond yield around zero percent. The European markets were trading in green. Britain’s economy slowed much more sharply than expected in the first three months of 2018, with heavy snow only partly to blame, prompting investors to slash their bets on a Bank of England rate rise next month.

The BSE Sensex ended at 34964.48, up by 250.88 points or 0.72% after trading in a range of 34744.73 and 35065.37. There were 20 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.78%, while Small cap index was up by 0.43%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 2.01%, Capital Goods up by 1.46%, Energy up by 1.45%, PSU up by 1.20% and Oil & Gas up by 1.15%, while IT down by 1.02%, TECK down by 0.69% and Consumer Durables down by 0.34% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 9.20%, SBI up by 3.99%, ICICI Bank up by 3.39%, Sun Pharma up by 2.30% and Asian Paints up by 2.22%. (Provisional)

On the flip side, TCS down by 2.29%, Coal India down by 2.15%, Maruti Suzuki down by 2.05%, Wipro down by 1.87% and NTPC down by 1.31% were the top losers. (Provisional)

Meanwhile, the government’s revenue collection under the Goods and Services Tax (GST) stood at Rs 7.41 lakh crore (provisional) during the financial year 2017-18 (July 2017 - March 2018).

According to the latest data released by the government, the collections were at Rs 7.19 lakh crore during the period August 2017- March 2018, which includes Rs 1.19 lakh crore of Central GST (CGST), Rs 1.72 lakh crore of State GST (SGST), Rs 3.66 lakh crore of Integrated GST (IGST) (including Rs 1.73 lakh crore on imports) and Rs 62,021 crore of cess (including Rs 5702 crore on imports). Besides, the average monthly GST Collection stood at Rs 89,885 crore in August-March Period.

The data noted that the total compensation released to the States for a period of eight months during FY18 was Rs 41,147 crore to ensure that the revenue of the States is protected at the level of 14% over the base year tax collection in 2015-16 and the SGST collection during the year, including the settlement of IGST stood at Rs 2.91 lakh crore. Besides, the average revenue gap of all states for last year is around 17%.

The CNX Nifty ended at 10694.70, up by 76.90 points or 0.72% after trading in a range of 10647.55 and 10719.80. There were 36 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 9.37%, SBI up by 4.29%, ICICI Bank up by 3.21%, HPCL up by 3.09% and Sun Pharma up by 2.42%. (Provisional)

On the flip side, HCL Tech down by 3.36%, Tech Mahindra down by 3.04%, TCS down by 2.30%, Maruti Suzuki down by 1.98% and Wipro down by 1.90% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 43.23 points or 0.58% to 7,464.66, Germany’s DAX increased 76.66 points or 0.61% to 12,577.13 and France’s CAC increased 9.31 points or 0.17% to 5,462.89.

Asian equity markets ended in green on Friday as a rebound in technology stocks on strong earnings and a drop in US Treasury yields helped improve investors' risk appetite.  Also, the European Central Bank and the Bank of Japan maintained their policy mix, as widely expected, helping support underlying sentiments. Japanese shares closed near three-month highs after the Bank of Japan kept its monetary policy steady, as widely expected, but dropped its target date for achieving its 2 percent inflation target. Investors also digested a raft of economic data. Japan's industrial output rose 1.2% sequentially in March to beat forecasts and the jobless rate held flat at 2.5% in line with expectations, while retail sales and consumer inflation figures fell short of expectations. Further, Chinese shares finished higher as gains in healthcare shares offset losses in consumer stocks, and as market participants continued to watch the developments of China-US trade spat.