Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day and ended with gains of around nine tenth of a percent. Benchmarks extended their rally in second half of the day on back of run up in Reliance Industries which helped Nifty surpass 10,700 mark. Indian equity benchmarks made a positive start and traded slightly in green in early deals. The sentiments were upbeat on report which highlighted that with the GST collection in April crossing the Rs 1-trillion-mark, the FY19 target of Rs 12.9 trillion mop-up seems feasible. It added that going forward, with government introducing anti- evasion measures like TDS, TCS and credit matching, these could be hopeful of very good GST collection for FY19. SBI Research’s report also said that India’s unemployment rate halved from 9.5% in August 2016 to 4.8% in February this year and among major states, a sharp decline was registered in Uttar Pradesh. Some support also came after the Asian Development Bank (ADB) enlightened that India’s projected GDP growth of over 7 percent for the current fiscal is amazingly fast and if this momentum is maintained the size of the economy can double within a decade. ADB added that the country shouldn’t worry about not achieving 8 percent growth but focus on increasing domestic demand by reducing the income inequality. Separately, Commerce and Industry Minister Suresh Prabhu has said that the government is working on a strategy to promote services exports which have the potential to boost overall foreign shipments and economic growth. The commerce ministry is working on a strategy to boost share of services in the country’s trade.

Meanwhile, banking stocks were buzzing in today’s trade on report that the Reserve Bank of India (RBI) is likely to give banks yet another leeway in accounting for their losses in government securities, potentially saving them hundreds of crore in provisions which will eventually benefit their bottom line. This exemption could be the latest in a series of steps taken by the central bank to ease banks’ pain after a sharp rise in bond yields and continuing stress due to elevated non-performing assets. Separately, Indian Banks’ Association (IBA) has drawn a plan for measuring implementation of reforms agenda by public sector banks on six specified parameters, which include customer responsiveness, credit off-take and digitalization. This assumes significance as the capital infusion in the state-owned banks is directly linked to their performance on reforms front. Investors shrugged off a report that foreign investors have pulled out over Rs 15,500 crore from the Indian capital market in April, making it the steepest outflow in 16 months, due to surge in global crude prices and rise in yields of government securities here. This comes after an inflow of Rs 11,654 crore in equities in March and an outflow of over Rs 9,000 crore from the debt market during the same period.

Additionally, real estate stocks were buzzing on report that the performance of some of the listed real estate companies in terms of residential sales over the past one year indicates that things are looking up. The pent-up demand for housing is now getting converted into actual sales. While industry experts have been terming the scenario as buyers’ market for some time, home buyers themselves seem to have become more active now. Mixed reactions were witnessed in internet software stocks on report that as much as $2.1 billion worth of M&A (merger and acquisition) transactions were inked in 2017 in the booming Indian e-commerce industry, which may soon witness its largest-ever deal - the proposed Flipkart-Walmart nuptial.

On the global front, Asian markets closed mixed. Chinese central bank governor said that China’s huge trade imbalance with the United States is a structural and long-term problem and should be viewed with rationality. Yi Gang, appointed to head the People’s Bank of China (PBOC) in March, also called for concerted efforts from the United States and China to resolve the trade dispute. The European markets were trading in green. A survey showed that investor morale in the euro zone deteriorated for the fourth month in a row this month to its lowest level since February 2017, hit by concerns about the possible introduction of US tariffs and a protectionist spiral.

Back home, mixed reactions were witnessed in telecom stocks after a report stated that the government’s plan to attract $100 billion (Rs 6.5 lakh crore) investment in the telecom sector by 2022 is conservative. The government draft of the new telecom policy (NTP) ‘National Digital Communications Policy 2018’ aims to create 40 lakh new jobs by 2022.

The BSE Sensex ended at 35224.27, up by 308.89 points or 0.88% after trading in a range of 34977.74 and 35237.81. There were 24 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.52%, while Small cap index was up by 0.54%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.66%, Metal up by 1.65%, Energy up by 1.50%, Realty up by 1.42% and Auto up by 1.41%, while Healthcare down by 0.63% was the sole losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 3.68%, ICICI Bank up by 2.76%, Axis Bank up by 2.68%, Tata Steel up by 2.52% and SBI up by 1.94%. (Provisional)

On the flip side, Dr. Reddy’s Lab down by 1.71%, Coal India down by 1.67%, TCS down by 1.58%, Sun Pharma down by 1.11% and HDFC Bank down by 0.59% were the top losers. (Provisional)

Meanwhile, with government introducing various anti-evasion measures like TDS, TCS and credit matching, SBI Research in its latest report has expressed hope that the Goods and Services Tax (GST) collection will be very good in the ongoing financial year (FY19) and revenue target of Rs 12.9 trillion also seems feasible.

As per the report, out of all the 15 States, seven states -- Karnataka, West Bengal, Haryana, Bihar, Odisha, Chhattisgarh and Jharkhand are expected to post lower than 14% growth in tax revenue in the current year, while remaining states may see better tax collection. It also said that looking at the GST budgetary estimates for FY19 across the states, Gujarat, Karnataka, Bengal, Haryana and Bihar are highly depending on GST and will get over 38% GST share to tax revenue, while for Andhra, Chhattisgarh, and Jharkhand it is less than 25% and may rely on the other sources of revenue to meet their funds.

SBI Research has urged states to focus on increasing the tax-base to improve tax collection, rather than imposing higher taxes on other sources. It further expressed need of some time for state GST to get settle down and added that with the increased tax base and better compliance, the revenue collection for the state will improve in next two to three years down the line.

The CNX Nifty ended at 10722.75, up by 104.50 points or 0.98% after trading in a range of 10635.65 and 10725.65. There were 37 stocks advancing against 13 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 4.32%, Mahindra & Mahindra up by 3.77%, ICICI Bank up by 3.02%, Axis Bank up by 2.94% and Hindalco up by 2.79%. (Provisional)

On the flip side, Lupin down by 2.66%, TCS down by 1.80%, Dr. Reddy’s Lab down by 1.77%, Coal India down by 1.58% and Cipla down by 1.01% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 64.45 points or 0.86% to 7,567.14, Germany’s DAX increased 50.79 points or 0.4% to 12,870.39 and France’s CAC increased 4.14 points or 0.08% to 5,520.19.

Asian equity markets ended mixed on Monday as investors digested mixed US jobs data for April and kept an eye on oil prices ahead of a key decision by the Trump administration to re-impose sanctions on Iran. Chinese shares ended higher amid optimism about robust April economic data despite lingering Sino-US trade tensions, as investors bid up tech shares after regulators detailed rules that pave the way for domestic flotation of overseas-listed technology giants. A flurry of Chinese data in the coming weeks is expected to show that the world’s second-largest economy remained strong in April, underpinned by a pickup in industrial output and a rebound in exports despite rising trade tensions with the United States. Meanwhile, Japanese shares ended on a flat note as falling US yields pulled down financials, offsetting investors’ optimism that the Bank of Japan will keep its purchases of exchange-traded funds (ETFs) and other risky assets. South Korean markets were closed in observance of Children's Day.