Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day and ended with gain of around half a percent. The firm buying on account of easing geo-political tensions and falling oil prices helped Sensex and Nifty to surpass 35,100 and 10,700 levels respectively. The market breath was in favour of advances with one stock advancing against each declining one. Indian equity benchmarks made an optimistic start and traded with traction in early deals. The sentiments were upbeat after Reserve Bank of India (RBI) further liberalized ECB policy. In a bid to facilitate cheaper access of overseas funds, RBI liberalized External Commercial Borrowings (ECB) Policy by including more sectors in the window. Some support crept in with Economic Affairs Secretary Subhash Chandra Garg’s  statement that the process of economic reforms is still continuing in reasonably major way and noted that there are no signs of de-reform in the system.

Separately, after RBI forecast of India’s growth rate at 7.4% in FY19, more and more predictions are putting India’s expected growth rate between 7.3% and 7.5%. Fitch Ratings said that India’s economy will grow 7.3% in FY19 and 7.5% in FY20 as the temporary drag from demonetization and the goods and services tax fades away. Additionally, a foreign brokerage report highlighted that the Indian economy is witnessing a cyclical upswing and the country is likely to clock a GDP growth of 7.5% this financial year. The report added that this will mark an improvement from the 6.7% likely outturn in 2017-18. 

Meanwhile, Niti Aayog Vice Chairman Rajiv Kumar expects India’s economy to grow by at least 7.5 percent in 2018-19 on back of improvement in investment cycle and capacity utilization. He added that the government should now concentrate on consolidating the reform initiatives undertaken in the last 47 months. Investors took note of report that the early trend in the March 2018 quarter results season looks encouraging though driven by large companies such as Reliance Industries, Tata Consultancy Services, Infosys, and Wipro. Net sales of a sample of 113 companies that declared results for the quarter grew by 16.9 per cent year-on-year while net profit rose by 3.9 per cent. Excluding banks and financial companies, sales growth improved to 17.5 per cent and net profit growth shot up to 9.6 per cent.

Select power related stocks were buzzing in today’s taking cues from Prime Minister Narendra Modi statement that the government has started supplying electricity to every village in the country and the task has been completed before due date. The government will now shift attention towards improving the quality of supply and connecting every household to the grid. Separately, there were reports that the latest plan of the country’s largest lender, SBI could soon see Rs 1.77 lakh crore power sector loans get restructured. Realty sector stocks were buzzing on report that private equity inflows into real estate rose 15 percent year-on-year to Rs 165.3 billion ($2.6 billion) during the first quarter, eclipsing the inflows of the first quarter of the previous 11 years. Separately, another report highlighted that with the after-effects of RERA and GST settling in; the real estate sector is starting to see the initial signs of a gradual revival in the residential sector. Demand is primarily being seen from end-users only.

On the global front, Asian markets closed in green as tensions in the Korean Peninsula eased and first-quarter earnings shone. China’s manufacturing activities slowed down slightly in April, but services industry picked up. The official Purchasing Managers’ Index (PMI) fell to 51.4 in April, compared to 51.5 in March. The European markets were trading in green. A data from the European Central Bank showed that lending to euro zone households and companies accelerated in March while a broader indicator of money circulating in the currency bloc, which often foreshadows future activity, slowed sharply.

Back home, select metal stocks were buzzing after data showed that India has registered a 2.46 per cent rise in crude steel production to 26.363 million tonnes (MT) in the last quarter of 2017-18. The country had produced 25.729 MT during the January-March period of 2016-17.

The BSE Sensex ended at 35182.60, up by 212.90 points or 0.61% after trading in a range of 35004.00 and 35213.30. There were 26 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.62%, while Small cap index was up by 0.90%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 1.51%, Realty up by 1.48%, FMCG up by 1.44%, IT up by 1.39% and Industrials up by 1.20%, while Energy down by 1.92%, Oil & Gas down by 1.11%, Telecom down by 0.32% and Consumer Durables down by 0.21% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 3.60%, Hindustan Unilever up by 2.68%, TCS up by 2.12%, Larsen & Toubro up by 1.90% and Kotak Mahindra Bank up by 1.88%. (Provisional)

On the flip side, Axis Bank down by 3.54%, Reliance Industries down by 3.01%, ICICI Bank down by 1.11%, Coal India down by 0.79% and ONGC down by 0.17% were the top losers. (Provisional)

Meanwhile, soothing worries of slowdown in reform momentum ahead of elections, Economic Affairs Secretary Subhash Chandra Garg has said that the process of economic reforms is still continuing in reasonably major way and noted that there are no signs of de-reform in the system.

Garg further mentioned the various areas like portfolio investment, capital markets and the assets creation, where the lot of reforms are still going on. He further highlighted the major structural and fundamental reforms undertaken in the country, describing them as truly global and big. Besides, he said that consolidation process continues and both the GST and IBC are stabilising.

Economic Affairs Secretary also assured that there is no sign that government would halt the pace of reform in the last year. Garg further said that India deserves a rating upgrade on the back of the major structural and fundamental reforms undertaken by the government.

The CNX Nifty ended at 10740.90, up by 48.60 points or 0.45% after trading in a range of 10704.60 and 10759.00. There were 35 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 3.48%, TCS up by 2.23%, Kotak Mahindra Bank up by 2.01%, Hindustan Unilever up by 1.90% and Larsen & Toubro up by 1.83%. (Provisional)

On the flip side, Axis Bank down by 3.76%, Reliance Industries down by 3.29%, UPL down by 2.96%, Bharti Infratel down by 2.45% and GAIL India down by 1.59% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 38.08 points or 0.51% to 7,540.29, Germany’s DAX increased 17.32 points or 0.14% to 12,598.19 and France’s CAC increased 12.43 points or 0.23% to 5,495.62.

Asian equity markets ended in green on Monday as tensions in the Korean Peninsula faded and investors digested a slew of earnings releases and economic reports. The dollar held below three-month highs amid a pullback in Treasury yields and ahead of the Fed’s policy decision and a jobs report due this week, while oil prices slipped as investors waited for signs on whether the US would re-impose sanctions on Iran. Trading volumes remained thin across Asia amid holidays in China and Japan. Investors shrugged off official data from China showing that the country's manufacturing sector grew at a slower pace in April. The official manufacturing PMI fell slightly to 51.4 from 51.5 in March. However, the non-manufacturing PMI that covers services and construction, improved to 54.8 from 54.6 a month ago.