Post Session: Quick Review

Indian equity benchmarks traded in red on a volatile note throughout the day and ended with cut of around half a percent. Though markets trimmed most of their losses during second half of the day but failed to enter green terrain. The market breadth was in favour of declines with one stock advancing against two declining ones. Indian equity benchmarks made a pessimistic start and traded with a cut of over three fourth of a percent in early deals on Wednesday. The sentiments were dampened on account of weak trend in global stocks, correction in banking stocks after disappointing earnings by PNB and uncertainty over formation of government in Karnataka. The Karnataka Assembly election results threw up an unexpected suspense yesterday as a simple majority eluded BJP and the Congress quickly proclaimed support to third-placed JD(S) to keep the saffron party out of power. Separately, trade deficit widened slightly to $13.72 billion in April from $13.25 billion a year ago. Besides, overall trade deficit, taking merchandise and services together, for April-March 2017-18 is estimated at $80.61 billion as compared to $41.79 billion during April-March 2016-17. India’s exports rose by 5.17% year-on-year to $25.9 billion in April, while imports during the month were valued at $39.6 billion, up 4.6% over April 2017.

Sentiments remained negative with a private report showing that inflation is set to rise further towards the second half of the fiscal, and could average 5.1% this financial year compared to 3.6% last year. The factors that are likely to impact inflation going forward include higher oil prices, a weaker rupee, higher MSPs and more currency in circulation. The report added that given global factors like rise in oil prices, Fed rate hikes and likely fall in dollar liquidity, will impact India’s macro economy, while domestic factors like higher agriculture Minimum Support Prices (MSPs) threaten to raise inflation. Additionally, the total investment via Participatory notes (P-notes) into Indian capital markets plunged to nearly 9-year low of Rs 1 lakh crore in April amid stringent norms put in place by the regulator SEBI to check misuse of these instruments. According to the SEBI data, the total value of P-note investments in Indian markets - equity, debt, and derivatives - slumped to a low of 1,00,245 at April-end from Rs 1,06,403 crore at the end of the preceding month. Prior to that, the figure was Rs 1,06,760 crore.

However, the markets erased most of their losses in second half following recovery in rupee and fall in crude oil prices. There were media reports that Yeddyurappa was elected as BJP legislature party head and Karnataka governor may invite BJP to form the government. Separately, in a bid to promote growth of the global economy, Commerce and Industry Minister Suresh Prabhu has pitched for inclusion of a comprehensive trade facilitation agreement (TFA) on services in the World Trade Organization (WTO). He noted that WTO will not be doing full justice to the world economic development unless services sectors are taken on board, so they are trying to work on that. Additionally, a private report enlightened that there was a 23 per cent jump in venture investments in April at $2.4 billion, led by e-commerce, infrastructure and realty plays by funds. Investments by private equity and venture capital funds had stood at $1.9 billion in the year-ago period.

On the global front, Asian markets closed mixed. Pyongyang called off talks with Seoul, throwing a major US-North Korean summit into question. Japan’s economy shrank for the first time in two years in the first quarter of the year amid weak consumption. The world’s third-largest economy contracted by 0.2% quarter-on-quarter in the January-March period, compared with growth of 0.1% at the end of 2017. The European markets were trading mostly in green as investors monitor surging interest rates in the bond markets. Eurostat confirmed its preliminary flash estimate that its consumer price index slowed to 1.2% year-on-year in April, down from 1.3% in March.

Back home, banking stocks were under pressure on CARE Ratings report that the 20 banks that have declared their earnings for the March quarter so far saw their collective non-performing assets rise to 8.32 percent of all the loans on their books. In absolute terms, NPAs increased 32.7 percent year on year to Rs 3.46 lakh crore at the end of March. In comparison, all their advances put together rose 14.4 percent over the same period.

The BSE Sensex ended at 35386.29, down by 157.65 points or 0.44% after trading in a range of 35241.63 and 35543.89. There were 13 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.22%, while Small cap index up by 0.12%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.08%, FMCG up by 1.74%, IT up by 0.25%, Consumer Disc up by 0.15% and TECK up by 0.15%, while Energy down by 1.88%, Oil & Gas down by 1.81%, PSU down by 1.27%, Bankex down by 1.20% and Utilities down by 0.71% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 3.89%, ITC up by 1.74%, Wipro up by 1.52%, Asian Paints up by 1.35% and Tata Motors - DVR up by 1.08%. (Provisional)

On the flip side, ICICI Bank down by 3.38%, Reliance Industries down by 2.38%, SBI down by 2.29%, Hero MotoCorp down by 2.09% and ONGC down by 1.67% were the top losers. (Provisional)

Meanwhile, terming the government’s 12 Champion Services scheme as bold new step, President Ram Nath Kovind has said that the 12 services sectors hold a huge potential to boost economic growth, create employment and for drawing global attention and investment. Besides, he noted that this also aims to optimise India’s skills and knowledge resources.

Kovind highlighted the country’s aim to become even more of a provider of services to the world and also underlined the natural advantages that the country has in the sector with its young population, large talent pool and comfort with technology. He further said that India expects to double the size of its GDP to $5 trillion by 2025, and out of this, $3 trillion share would be of services sector.

Pointing to the government’s programmes like Start-up India and the Mudra Yojana, President said that these have seeded a culture of entrepreneurship, largely in services and further expressed confident that some of these start-ups will grow into giants in the years and decades to come.

The CNX Nifty ended at 10742.60, down by 59.25 points or 0.55% after trading in a range of 10699.70 and 10790.45. There were 18 stocks advancing against 32 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindustan Unilever up by 3.96%, Lupin up by 2.16%, Wipro up by 1.72%, ITC up by 1.61% and Bajaj Finance up by 1.20%. (Provisional)

On the flip side, ICICI Bank down by 3.76%, Ultratech Cement down by 3.06%, GAIL India down by 2.93%, Cipla down by 2.74% and Reliance Industries down by 2.37% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 1.01 points or 0.01% to 7,723.99, Germany’s DAX increased 21.07 points or 0.16% to 12,991.11, while France’s CAC decreased 3.33 points or 0.06% to 5,549.83.

Asian equity markets ended mixed on Wednesday after US government bond yields surged on expectations for further interest rate hikes from the Federal Reserve and North Korea suspended talks with South Korea scheduled for later in the day, citing the South Korea-US joint military exercises. This has raised concerns about the planned summit between leader Kim Jong Un and US President Donald Trump in June. Japanese shares fell amid renewed geopolitical uncertainty on the Korean Peninsula. Weak GDP data also weighed on markets. Data showed that the world's third-biggest economy contracted a more than expected 0.6 percent in the January-March period on an annualized basis to suffer its first contraction since 2015.