Post Session: Quick Review

Indian equity benchmarks altered between positive and negative territory and ended on a flat note as the street turned cautious ahead of Karnataka election results due tomorrow. Indian equity benchmarks made a positive start and traded in green in early deals amid firm global cues. The sentiments were upbeat on global rating agency Fitch’s statement that India’s economic growth is likely to accelerate to 7.3% in FY19 and 7.5% in FY20 on the back of recovery in money supply to its pre-demonetization level. Moreover, disruptions related to the rollout of GST have also eased and will support in the growth of Indian economy. Separately, another foreign brokerage report highlighted that despite moderation in factory output growth in March, India’s GDP is expected to grow by 7.7 per cent in January-March, up from 7.2 per cent in the preceding quarter. Investors took note of private report stating that India was the largest remittance-receiving country in the world, with migrant workers from the country sending home $69 billion in 2017, according to a report which said remittances to the Asia-Pacific region amounted to $256 billion last year.

Meanwhile, select stocks in healthcare space were buzzing on a private report that the healthcare industry is expected to grow annually at 16-17% to reach to Rs 8.6 trillion by FY22 on the back of the Centre’s Ayushman Bharat scheme which if implemented successfully can go a long way in meeting the severe shortage of healthcare infrastructure. The report added that if the above scheme is implemented successfully, healthcare delivery market can grow multi-fold. Select banking stocks were buzzing on report that the Finance Ministry is examining a proposal to find innovative ways for dealing with burden of NPA provisions by issuing provision shore-up certificates (PSC) to banks. With the help of this instrument, the operating profit of bank is saved from erosion and the lender would be able to focus on lending activities as being in financially good shape.

However, some selling crept in between as riding on higher inflation in fuel and food, India’s Wholesale Price Inflation (WPI) rose 3.18% in April. The Commerce & Industry Ministry said that the rate of inflation based on WPI Food Index consisting of Food Articles from Primary Articles group and Food Product from Manufactured Products group increased from (-) 0.07% in March, 2018 to 0.67% in April, 2018. Government also revised upwards the WPI for February to 2.74% from the provisional estimate of 2.48% released earlier. Separately, a foreign brokerage report highlighted that the Reserve Bank is expected to begin its rate hike cycle from December quarter, and may go for three rate hikes by 2019 taking the key policy rate to 6.75 percent. Some concerns also came with ASSOCHAM’s report stating that whatever the outcome of Karnataka elections, the political-economic narrative of 2018 and early part of 2019 would centre around either the impending polls in states like Madhya Pradesh and Rajasthan or the general Lok Sabha elections, forcing investors to adopt a ‘wait and watch’ stance.

Separately, the street noted that India’s industrial output report which expanded at its slowest in five months in March, pulled down by slow growth in mining and contraction in the production of key items such as hand tools, gold jewellery, paper and readymade garments. The Index of Industrial Production (IIP) rose 4.4% from a year ago, data issued by CSO showed, compared with 7% rise in February. For the full year 2017-18, industrial production grew 4.3%, compared with 4.6% in 2016-17. Additionally, foreign investors have pulled out Rs 12,671 crore ($2 billion) from the Indian capital markets, in the last eight trading sessions, primarily due to surge in global crude prices and rise in yields of government securities here. These developments follow an outflow of over Rs 15,500 crore from the capital markets (equity and debt) in April, the steepest in 16 months.

On the global front, Asian markets closed mostly higher amid signs of easing US-China trade tension as US President Donald Trump ordered the Commerce Department to get Chinese telecom equipment maker ZTE Corp back into business. Malaysian equities were another focus as the stock market reopened after a two-day holiday following a surprising victory of Mahathir Mohamad in the country’s general elections last week. The European markets were trading mostly in red. Traders are watching developments in Italy where the antiestablishment 5 Star Movement and hard-right League party have reached an agreement on a governing program.

The BSE Sensex ended at 35540.93, up by 5.14 points or 0.01% after trading in a range of 35456.56 and 35642.72. There were 15 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.95%, while Small cap index was down by 1.06%. (Provisional)

The few gaining sectoral indices on the BSE were Bankex up by 0.09%, Oil & Gas up by 0.09% and PSU up by 0.05%, while Consumer Durables down by 2.37%, Telecom down by 1.24%, Industrials down by 0.99%, Auto down by 0.98% and Realty down by 0.82% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 2.48%, Dr. Reddy’s Lab up by 1.16%, IndusInd Bank up by 1.10%, Hero MotoCorp up by 0.96% and SBI up by 0.88%. (Provisional)

On the flip side, Mahindra & Mahindra down by 2.07%, Tata Motors down by 2.04%, Tata Motors - DVR down by 2.00%, Yes Bank down by 1.54% and Adani Ports & Special Economic Zone down by 1.01% were the top losers. (Provisional)

Meanwhile, snapping four-month easing trend, India’s inflation on wholesale level picked up in the month of April due to increase in prices of food and fuel products. According to the latest data released by the government, the wholesale price inflation (WPI) climbed to 3.18% in April 2018 from 2.47% in March 2018. However, it was lower compared to 3.85% reported during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 0.69% compared to a build up rate of 0.00% in the corresponding period of the previous year.

Component wise, primary articles index having weight of 22.62%, surged 1.4% to 129.2 (provisional) from 127.4 (provisional) for the previous month. Among the primary articles, the index for ‘Food Articles’ group was up by 1.9% to 139.8 (provisional) from 137.2 (provisional) for the previous month, the index for ‘Minerals’ group rose by 1.6% to 121.6 (provisional) from 119.7 (provisional) for the previous month and the index for ‘Crude Petroleum & Natural Gas’ group increased by 2.4% to 82.1 (provisional) from 80.2 (provisional) for the previous month. On the flip side, the index for ‘Non-Food Articles’ group declined by 0.9% to 119.1 (provisional) from 120.2 (provisional) for the previous month.

Fuel & Power index, having weight of 13.15%, was up by 0.9% to 98.9 (provisional) from 98.0 (provisional) for the previous month, due to rising Coal and Mineral Oils prices.

Manufactured Products constituting the major portion of the index with weight of 64.23% moved up by 0.3% to 116.1 (provisional) from 115.7 (provisional) for the previous month. The index for ‘Manufacture of Textiles’ group rose by 0.3% to 114.4 (provisional) from 114.1 (provisional) for the previous month, the index for ‘Manufacture of Wearing Apparel’ group surged by 1.1% to 139.3 (provisional) from 137.8 (provisional) for the previous month, the index for ‘Manufacture of Leather and Related Products’ group increased by 1.2% to 122.0 (provisional) from 120.5 (provisional) for the previous month, the index for ‘Printing and Reproduction of Recorded Media’ group rose by 0.2% to 144.9 (provisional) from 144.6 (provisional) for the previous month, the index for ‘Manufacture of Chemicals and Chemical Products’ group was up by 1.0% to 116.4 (provisional) from 115.2 (provisional) for the previous month and the index for ‘Manufacture of Rubber and Plastics Products’ group edged up by 0.4% to 108.2 (provisional) from 107.8 (provisional) for the previous month.

Besides, the index for ‘Manufacture of other Non-Metallic Mineral Products’ group soared 1.2% to 115.2 (provisional) from 113.8 (provisional) for the previous month, the index for ‘Manufacture of Basic Metals’ group rose by 0.5% to 110.1 (provisional) from 109.5 (provisional) for the previous month, the index for ‘Manufacture of Computer, Electronic and Optical Products’ group rose by 1.1% to 111.6 (provisional) from 110.4 (provisional) for the previous month, the index for ‘Manufacture of Electrical Equipment’ group was up by 1.2% to 110.8 (provisional) from 109.5 (provisional) for the previous month, the index for ‘Manufacture of Machinery and Equipment’ group moved up by 0.4% to 110.4 (provisional) from 110.0 (provisional) for the previous month, the index for ‘Manufacture of Motor Vehicles, Trailers and Semi-Trailers’ group rose by 0.2% to 111.2 (provisional) from 111.0 (provisional) for the previous month and the index for ‘Other Manufacturing’ group jumped up by 1.2% to 105.3 (provisional) from 104.1 (provisional) for the previous month.

On the other hand, the index for ‘Manufacture of Food Products’ group declined by 0.1% to 127.6 (provisional) from 127.7 (provisional) for the previous month, the index for ‘Manufacture of Beverages’ group fell 0.5% to 119.2 (provisional) from 119.8 (provisional) for the previous month, the index for ‘Manufacture of Tobacco Products’ group was down by 4.0% to 146.0 (provisional) from 152.1 (provisional) for the previous month, the index for ‘Manufacture of Wood and of Products of Wood and Cork’ group inched down by 0.1% to 131.6 (provisional) from 131.7 (provisional) for the previous month and the index for ‘Manufacture of Paper and Paper Products’ group decreased by 0.1% to 120.8 (provisional) from 120.9 (provisional) for the previous month, the index for ‘Manufacture of Pharmaceuticals, Medicinal Chemical and Botanical Products’ group was down by 0.5% to 120.4 (provisional) from 121.0 (provisional) for the previous month, the index for ‘Manufacture of Fabricated Metal Products, Except Machinery and Equipment’ group fell 0.4% to 111.7 (provisional) from 112.2 (provisional) for the previous month, the index for ‘Manufacture of Other Transport Equipment’ group declined by 0.4% to 110.2 (provisional) from 110.6 (provisional) for the previous month, the index for ‘Manufacture of Furniture’ group was down by 0.5% to 123.3 (provisional) from 123.9 (provisional) for the previous month.

The CNX Nifty ended at 10796.50, down by 10.00 points or 0.09% after trading in a range of 10774.75 and 10834.85. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 2.24%, BPCL up by 1.30%, IndusInd Bank up by 1.25%, Dr. Reddy’s Lab up by 1.23% and Power Grid up by 1.04%. (Provisional)

On the flip side, Titan Co down by 3.49%, Zee Entertainment down by 2.83%, Tata Motors down by 2.24%, Mahindra & Mahindra down by 2.09% and Bharti Infratel down by 2.05% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 13.93 points or 0.11% to 12,987.31, France’s CAC decreased 4.81 points or 0.09% to 5,537.13, while UK’s FTSE 100 increased 1.09 points or 0.01% to 7,725.64.

Asian equity markets ended mostly higher on Monday as the United States and China prepared to continue trade talks in Washington. Investors held hopes for a thaw in US-China trade tensions after US President Donald Trump said on Sunday that he will help Chinese technology company ZTE Corp. ‘get back into business, fast,’ as it was hurt by a US ban. Chinese shares ended higher as trade tensions eased and investors awaited MSCI's final A-share inclusion list. Further, Japanese shares hit a 3-1/2 month high as the yen slipped against its major counterparts on improved risk appetite and cosmetics maker Shiseido posted better-than-expected earnings.