Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day and ended with gains of more than eight tenth of a percent. The last hour of trade pulled the markets higher with Nifty surpassing 10,800 mark. The market breadth was in favour of declines with two stocks advancing against three declining ones. Indian equity benchmarks made a positive start and traded slightly in green in early deals on Friday amid firm global cues. The street took some support from a private report which highlighted that India Inc’s mergers and acquisitions (M&As) tally rose eight-fold to $19.1 billion with 40 transactions in April, making it the highest monthly deal value recorded after March 2017. The report added that relative easing of regulatory ecosystem and consolidation across sectors has significantly driven the deal activity in April this year, sealing deals (M&A and PE) worth $21 billion across 119 deals. Some support also came with the Ministry of External Affairs’ (MEA) spokesperson Raveesh Kumar’s statement that India will take necessary steps to offset any adverse impact on its interests due to withdrawal of the United States from a multinational nuclear agreement with Iran.

Separately, a report enlightened that the Centre has made lending norms easier in farmer support schemes like Kisan Credit Card to increase the quantum of funds lent by institutions to small and marginal farmers in the country. According to the revised guidelines, standard security requirements like hypothecation of crops do not apply to loans of up to Rs 1 lakh. This will also be applicable on loans taken through Kisan Credit Card, which helps land-holding farmers meet their immediate credit needs. Investors took note that the MSME ministry is in talks with the Reserve Bank of India (RBI) to explore ways to improve credit flow to micro, small and medium enterprises across the country. The ministry is looking at measures to address issues pertaining to decline in exports. Additionally, a parliamentary panel headed by veteran BJP leader Murali Manohar Joshi has decided to study the recovery of black money and performance of public sector banks among a host of subjects.

The street shrugged off India Ratings and Research’s (Ind-Ra) report which stated that India’s trade deficit will widen to a four-year high of $178.1 billion or 6.4% of Gross Domestic Product (GDP) in 2018-19 (FY19), due to rupee depreciation coupled with higher crude and gold imports. Meanwhile, former Finance Minister Yashwant Sinha has said that the data on economic growth put out by the Central government cannot be trusted.  He questioned the government’s claims about GDP growth and generation of employment. Sinha added that the Centre has been playing with the figures to show that jobs are created in large numbers.

Meanwhile, select auto stocks were buzzing in today’s trade after Society of Indian Automobile Manufactures’ (SIAM) report highlighted that the automobile industry took off on a strong note in April registering an overall growth of 17.44% in April 2018 to more than 23.79 lakh units from the year earlier period. Domestic passenger vehicle sales rose 7.5% to 2,98,504 units in April from 2,77,683 units in the same month last year. Domestic car sales were up 4.89% to 2,00,183 units as against 1,90,854 units in April 2017. Telecom companies closed in red after Reliance Jio Infocomm expanded the tariff war to the postpaid segment, launching a plan at almost half the price and with more data than those offered by its rivals. The telecom arm of Mukesh Ambani-controlled Reliance Industries will start offering the Rs 199 a month plan to consumers from May 15.

On the global front, Asian markets closed mostly higher as risk appetite got a boost from soft US inflation, helping alleviate worries of faster rate hikes by the Federal Reserve, while investors also cheered US-North Korean steps to further ease tensions on the Korean Peninsula. A poll showed that Japan’s economy is expected to have contracted for the first time in two years in the first quarter due to weak private consumption and softer export demand. The European markets were trading in red. A survey showed that a record number of German companies believe economies in foreign markets where they do business will improve despite rising political and trade risks.

Back home, select non-banking finance companies (NBFC) stocks were buzzing with India Ratings’ report highlighting that as the banks are moderating their real estate lending growth due to issues related with asset quality and capitalization, the market share of NBFCs and HFCs would continue to expand in the real estate financing space. The ability to structure loans, low credit costs, collateral comfort and attractive yields along with regulatory arbitrage will help in loan growth of NBFCs.

The BSE Sensex ended at 35538.00, up by 291.73 points or 0.83% after trading in a range of 35262.06 and 35596.15. There were 24 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.35%, while Small cap index was down by 0.12%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.50%, Bankex up by 1.14%, Oil & Gas up by 1.10%, Capital Goods up by 1.06% and FMCG up by 1.00%, while Telecom down by 4.10%, Consumer Durables down by 1.35%, Healthcare down by 0.77%, Realty down by 0.40% and Power down by 0.29% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Asian Paints up by 6.20%, Tata Steel up by 1.89%, Larsen & Toubro up by 1.76%, Kotak Mahindra Bank up by 1.49% and HDFC up by 1.43%. (Provisional)

On the flip side, Bharti Airtel down by 5.94%, Sun Pharma down by 5.02%, Tata Motors - DVR down by 1.56%, Tata Motors down by 0.75% and Hero MotoCorp down by 0.58% were the top losers. (Provisional)

Meanwhile, in order to enhance credit flow to micro, small and medium enterprises (MSMEs) by ensuring credit flow for them is up to the expectation, gaps are bridged and their problems are addressed, MSME Secretary S K Panda has said that the ministry is holding discussions with the Reserve Bank of India (RBI) about promoting fintech companies which can reach out much better than the scheduled commercial banks to the MSMEs all across India.

Panda also emphasized the efforts being taken by the ministry to address issues pertaining to decline in exports and added that the ministry will constitute a special task force which will focus on steps required to enhance exports from the enterprises with an aim of making them part of the global value chain.

Expressing hope that the quantum of credit guaranteed by the Credit Guarantee Fund Trust For Micro and Small Enterprises (CGTMSE) may touch Rs 50,000 crore this year, MSME Secretary said that the ministry is allowing NBFCs partial collateral and also trying to work with GSTN to generate integrated database to get the details of MSMEs to communicate with them and work on the problems faced by them. Besides, he said the ministry will seek support of state governments to put up details of MSMEs on the Samadhan Portal so that payments due to small enterprises do not get stuck.

The CNX Nifty ended at 10807.40, up by 90.85 points or 0.85% after trading in a range of 10724.45 and 10812.05. There were 38 stocks advancing against 12 stocks declining on the index. (Provisional)

The top gainers on Nifty were Asian Paints up by 5.53%, HPCL up by 3.54%, Vedanta up by 2.52%, BPCL up by 2.45% and Indiabulls Housing up by 2.20%. (Provisional)

On the flip side, Bharti Airtel down by 5.85%, Sun Pharma down by 4.97%, Titan Co down by 1.91%, Tata Motors down by 0.82% and Hero MotoCorp down by 0.76% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 2.7 points or 0.04% to 7,698.27, Germany’s DAX decreased 45.75 points or 0.35% to 12,977.12 and France’s CAC decreased 23 points or 0.41% to 5,522.95.

Asian equity markets ended mostly higher on Friday, with higher commodity prices and easing rate hike fears helping underpin investors’ sentiments. While the dollar index eased somewhat after the release of tepid US inflation data, oil prices hovered near multi-year highs reached the previous session. Geopolitical developments also remained in focus after US President Donald Trump said he had high hopes of ‘doing something very meaningful’ to curtail North Korea's nuclear ambitions at a summit in Singapore in June. Japanese shares hit a three-month high as chip-related shares advanced and several companies posted strong earnings.  However, Chinese shares fell, but posted their best weekly performance in almost three months, as interest towards Chinese blue-chips has been steadily building ahead of MSCI’s A-share inclusion next month. Meanwhile, Malaysian markets were closed for a holiday as Mahathir Mohamad was sworn in as the nation's seventh prime minister after a stunning election comeback.