Benchmarks end lower on Thursday

Thursday turned out to be a disappointing day of trade, where frontline gauges failed to hold on to their early gains and ended in red terrain, as traders remained on sidelines ahead of the outcome of the Karnataka Assembly elections which will have larger implications for the way the capital markets will view the future of reforms. Markets started the session on an optimistic note as traders took some encouragement with India Ratings’ report that the Indian economy is gradually coming out of the twin shock of demonetisation and GST which temporarily derailed growth. The ratings agency, however, cautioned on the possible widening of the current account deficit (CAD) due to rising oil prices which was creating pressure on the currency. Some support also came with Commerce Secretary Rita Teaotia’s statement that India is not expecting any major shift in trade with Iran following the US decision to re-impose trade sanctions against the Islamic nation. The bilateral trade between India and Iran has increased to $12.9 billion in 2016-17 from $9 billion in the previous fiscal. Additionally, Rita Teaotia said that the commerce ministry is working with different ministries to formulate separate plans for 12 services sector, including IT, tourism and logistics, with a view to boost growth in these segments.

However, markets lost momentum and pared all of their gains in last leg of trade to end in red terrain. Sentiments turned pessimistic after International Monetary Fund (IMF) in its report highlighted that in India, given increased inflation pressure, monetary policy should maintain a tightening bias. The advice came at a time when oil poses an upside risk to the inflation. Earlier, the Monetary Policy Committee (MPC) had raised several areas of concerns, including high and volatile crude prices. Sentiments also remained dampened on Assocham’s statement that President Donald Trump’s announcement of the US pulling out from the Iran deal and his decision to re-impose sanctions on the key crude oil producer will exert pressure on fuel prices and affect the Indian economy on the downside.

On the global front, European markets were trading mostly in red as output in the UK manufacturing sector fell by 0.1% in March, according to figures published by the Office for National Statistics. Asian markets ended in green as rallying oil prices helped lift energy stocks and US President Donald Trump said he would announce the site for a summit with North Korean leader Kim Jong Un within three days.

Back home, select companies in renewable energy space remained in focus after RK Singh, Minister of Power and new and renewable energy, said that India is making quick progression in the field of renewable energy and the government is committed to achieving the said target by 2022. Stocks related to insurance sectors remained buzzing on report that the government is considering allowing 100% foreign direct investment (FDI) in insurance intermediaries with a view to give a boost to the sector and attracting more funds. Aviation company stocks remained under pressure despite Airports Authority of India’s (AAI) report enlightening that Tier-II cities have seen a sharp jump in international aircraft movement in recent months, with the city of Varanasi recording an impressive growth of 98.6% in March this year as compared to 2017.

Finally, the BSE Sensex declined 73.08 points or 0.21% to 35,246.27, while the CNX Nifty was down by 25.15 points or 0.23% to 10,716.55.

The BSE Sensex touched a high and a low of 35,500.76 and 35,203.85, respectively and there were 9 stocks on gaining side as against 22 stocks on losing side on the index.

The broader indices ended in red; the BSE Mid cap index declined 1.52%, while Small cap index was down by 1.36%.

The few gaining sectoral indices on the BSE were Energy up by 0.61%, Oil & Gas up by 0.54% and Telecom was up by 0.02%, while Realty down by 2.02%, Power down by 1.55%, Healthcare down by 1.52%, Utilities down by 1.38% and Consumer Durables was down by 1.27% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.87%, Bharti Airtel up by 1.92%, Tata Motors - DVR up by 0.71%, Reliance Industries up by 0.55% and HDFC Bank up by 0.54%. On the flip side, Dr. Reddy’s Lab down by 3.70%, Tata Motors down by 2.34%, Sun Pharma down by 1.85%, Power Grid Corporation down by 1.77% and Bajaj Auto down by 1.62% were the top losers.

Meanwhile, the Ministry of New and Renewable Energy (MNRE) has said that as per the data compiled till March 31, 2018, India has already achieved 70 GW of installed renewable energy capacity and an additional 38 GW is under implementation. It noted that the 70 GW installed renewable energy capacity in the country is double of the capacity four year back.

The MNRE has stated that about 56,000 solar power pumps were installed in 2017-18, which is highest ever in a single year. It indicated that the renewable energy sector has added 11,788 MW of capacity to the grid in FY18, which is the highest ever in a single year. Besides, it claimed that it has bid out 32,500 MW capacities in last fiscal, which is nearly 10 times capacity commissioned in 2013-14. It also boasted about discovering lowest wind and solar power tariff of Rs 2.43 and Rs 2.44 per unit, respectively, in the last fiscal through tariff based competitive bidding.

The ministry further highlighted that India generated 100 billion units of electricity through renewables last fiscal, which is highest ever so far. On the achievement of renewable energy in the country, Power and New & Renewable Energy Minister R K Singh has said that India is progressing fast in the areas of renewable energy and government is on its way to achieving 175 GW target for installed Renewable Energy capacity by 2022.

The CNX Nifty traded in a range of 10,785.55 and 10,705.00. There were 15 stocks in green as against 35 stocks in red on the index.

The top gainers on Nifty were ONGC up by 2.73%, Bharti Airtel up by 2.00%, Eicher Motors up by 1.43%, Tech Mahindra up by 1.33% and BPCL up by 1.18%. On the flip side, Dr. Reddy’s Lab down by 3.47%, Indiabulls Housing Finance down by 2.54%, Tata Motors down by 2.47%, Cipla down by 2.36% and Power Grid down by 1.86% were the top losers.

The European markets were trading mostly in red; UK’s FTSE 100 decreased 27.12 points or 0.35% to 7,635.40 and France’s CAC was down by 8.12 points or 0.15% to 5,526.51, while Germany’s DAX was up by 39.18 points or 0.3% to 12,982.24.

Asian equity markets ended mostly higher on Thursday as rallying oil prices helped lift energy stocks and US President Donald Trump said he would announce the site for a summit with North Korean leader Kim Jong Un within three days. Japanese shares ended higher on improved risk appetite as crude oil prices surged and investors digested a raft of local economic data. Further, Chinese shares ended higher after official data showed the country's consumer price inflation eased to a three-month low in April on weak food price growth, while producer price inflation increased for the first time in seven months on commodity prices. Consumer prices in China were up 1.8 percent on year in April. That was beneath expectations for 1.9 percent and down from 2.1 percent in March. Producer prices advanced an annual 3.4 percent - matching forecasts and up from 3.1 percent in the previous month. Meanwhile, Indonesian and Malaysian markets remained closed for holidays.