Post Session: Quick Review

Indian equity benchmarks traded in red for most part of the day and ended the day in negative territory. Benchmarks extended their losses during last hour of trade with Nifty slipping below 10,700 mark. Indian equity benchmarks traded on a flat note in early deals on Thursday taking some support with report that the Centre has contained its fiscal deficit for FY18 at 3.42% of gross domestic product (GDP), down from 3.5% estimated (RE) when Budget FY19 was presented on February 1. An Rs 85,000 crore (3.8%) reduction in expenditure from the RE level of Rs 22.18 lakh crore and a marginal upward revision in nominal GDP in the second advance estimate (the Budget relied on the first advance estimate) allowed the government to curb the deficit.  However, selling crept in on report stating that the share of Foreign Portfolio Investments (FPI) through Participatory notes (P-notes) in domestic capital markets has declined to nine-year low of Rs 1 lakh crore at the end of April, due to tough rules put in place by Securities and Exchange Board of India (SEBI) to check the misuse of these instruments.

Meanwhile, aviation company stocks InterGlobe Aviation, Jet Airways and SpiceJet closed in red as oil prices firmed with Brent crude creeping ever closer to $80 per barrel, a level it has not seen since November 2014, as supplies tighten while demand remains strong. Crude oil accounts for around 40% of operating costs of an aviation company. A slight change in crude prices can drastically affect margins. Investors shrugged off private report that there was a 23% jump in venture investments in April at $2.4 billion, led by e-commerce, infrastructure and realty plays by funds. The report added that the increase in activity was driven largely by a jump in deal sizes, it said, pointing out that going by the number of deals, there were 69 transactions this April as against 66 in the year-ago period.

Additionally, select PSU stocks were buzzing after the Cabinet approved a mechanism for speedy resolution of commercial disputes of central public sector enterprises without cases going to courts. A new two-tier mechanism will be put in place of the existing Permanent Machinery of Arbitration mechanism to resolve such commercial disputes. Select solar companies like Moser Baer India and Veer Energy & Infrastructure closed in red on report that investors are cautious in bidding for solar power projects, fearing that depreciation in rupee, if un-hedged, may reduce their returns and in turn increase tariffs. India Ratings reported that this could be due to a significant exchange rate variation between the bidding and finalization time for projects.

On the global front, Asian markets closed mostly lower. Japan’s core machinery orders fell in March for the first time in three months, but manufacturers forecast a rise for April-June, suggesting capital expenditure could hold up despite news that the economy contracted in the first quarter. The 3.9 percent fall in core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months. The European markets were trading mostly in green. European Commission Vice President Valdis Dombrovskis said that Italy’s new government needs to stick to fiscal discipline and keep reducing the country’s public debt.

The BSE Sensex ended at 35109.47, down by 278.41 points or 0.79% after trading in a range of 35087.82 and 35510.01. There were 9 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.63%, while Small cap index was up by 0.40%. (Provisional)

The only gaining sectoral indices on the BSE were Consumer Durables up by 1.40%, Realty up by 0.32%, Telecom up by 0.24% and Industrials up by 0.06%, while FMCG down by 1.02%, Bankex down by 0.74%, Metal down by 0.53%, Energy down by 0.48% and Basic Materials down by 0.37% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 2.47%, Sun Pharma up by 1.75%, Tata Motors up by 1.43%, Wipro up by 1.00% and Tata Motors - DVR up by 0.79%. (Provisional)

On the flip side, ITC down by 2.55%, Bharti Airtel down by 2.49%, HDFC down by 2.08%, Tata Steel down by 2.05% and Axis Bank down by 2.05% were the top losers. (Provisional)

Meanwhile, credit rating agency, Care Ratings in its latest report ‘NPAs of Banks - 20 banks’ has said that overall Non-performing Assets (NPAs) in the banking sector surged by 32.7% to Rs 3.46 lakh crore at the end of March 2018 from Rs 2.61 lakh crore in the year-ago period. The study report based on 20 banks, includes 11 private sector banks and remaining 9 are public sector banks (PSBs).

According to the report, all the banks have witnessed rise in NPA ratio except Yes Bank and Kotak Bank in the private sector and Vijaya Bank and Indian Bank in the PSBs. Besides, it noted that in March 2018, NPAs for the combined set of banks rose to 8.32% from 7.17% reported in March 2017.

The rating agency further said that Axis Bank reported the highest rise in terms of NPA ratio on year-on-year basis among private banks, while UCO Bank, Dena Bank, Union Bank, Oriental Bank of Commerce, Allahabad Bank and Bank of Maharashtra were the PSBs who have showed highest increase in NPA ratio over the year.

The CNX Nifty ended at 10677.60, down by 63.50 points or 0.59% after trading in a range of 10664.50 and 10777.25. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Finance up by 7.53%, Bajaj Finserv up by 4.61%, Coal India up by 3.28%, Sun Pharma up by 1.73% and Tata Motors up by 1.37%. (Provisional)

On the flip side, Hindalco down by 3.02%, UPL down by 2.58%, ITC down by 2.55%, Bharti Airtel down by 2.34% and Axis Bank down by 2.19% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 28.07 points or 0.22% to 13,024.40, France’s CAC increased 26.29 points or 0.47% to 5,593.83, while UK’s FTSE 100 decreased 2.9 points or 0.04% to 7,731.30.

Asian equity markets ended mostly lower on Thursday. Chinese stocks ended lower as investors turned cautious amid trade talks between China and the US in Washington. However, Japanese shares ended marginally higher after Wall Street gained overnight, with financial stocks rallying on an increase in US bond yields while tech shares attracted buyers after the yen weakened. Investors shrugged off weak Japanese core machinery orders data for March. The Cabinet Office said that the total value of core machine orders in Japan dropped 3.9 percent on month in March, coming in at 856.6 billion yen. That missed expectations for a decline of 3.0 percent following the 2.1 percent increase in February.