Benchmarks extend previous session gains; Nifty reclaims 10,600 mark

Extending previous session’s gains, Indian equity benchmarks ended the Friday’s trade in green terrain with frontline gauges recapturing their crucial 34,900 (Sensex) and 10,600 (Nifty) levels, as oil prices eased on expectations of a gradual increase in output from Russia and other large producers. Markets made an optimistic start and traded with traction throughout the day, as traders took encouragement with Care Ratings’ report forecasting the country’s GDP growth to accelerate to 7.5% this financial year, from 6.6% in the last fiscal, on better performance from the industrial and agricultural sectors. Headline inflation, lending rates, fiscal prudence, current account deficit (CAD) and exchange rates, however, are the areas of concern. Some support also came with NITI Aayog vice chairman Rajiv Kumar’s statement that states have the capacity and must reduce the duty on petrol, while the Centre should create fiscal space to deal with the impact of spurt in oil prices. The rising crude prices in the international market prompted state-owned oil companies to raise domestic prices for 11th day in a row. Petrol costs Rs 77.47 a litre in Delhi and diesel Rs 68.53 a litre.

Key indices extended buying in last leg of trade as traders remained optimism after capital market regulator Securities and Exchange Board of India (SEBI) allowed ‘omnibus’ trades at the Gujarat International Finance Tec-city (GIFT City), India’s only international financial service centre (IFSC). An omnibus structure allows an investor trade through a broker or service provider with confidentiality. Meanwhile, Maharashtra Chief Minister Devendra Fadnavis has said that fuel prices will come down once the Centre builds a consensus to bring petrol and diesel under the Goods and Services Tax (GST).

Firm opening in European counters too aided sentiments after North Korea made good on its promise to demolish the country’s nuclear test site and said it's still willing to talk with Washington, in response to Donald Trump’s abrupt decision to cancel a summit with the North’s leader, Kim Jong Un. However, Asian markets exhibited mixed trend after US President Donald Trump cancelled a planned meeting with North Korean leader Kim Jong Un.

Back home, stocks related to retail sector remained in limelight as a private report stated that the Indian retail sector has attracted Rs 1,000 crore private equity investment in the March 2018 quarter, taking the cumulative investment since 2015 to Rs 5,500 crore. Agriculture stocks remained buzzing on a report that India and the Netherlands are keen to further cooperate in the field of agriculture India and the Netherlands are keen to further cooperate in the field of agriculture and allied sectors. Shares of liquor companies remained in focus with frontline stocks like United Breweries (UBL), United Spirits and Radico Khaitan rallied on the BSE after reporting good set of numbers in the fourth quarter ended March 2018 (Q4FY18).

Finally, the BSE Sensex rose 261.76 points or 0.76% to 34,924.87, while the CNX Nifty was up by 91.30 points or 0.87% to 10,605.15.

The BSE Sensex touched a high and a low of 35,017.93 and 34,700.52, respectively and there were 24 stocks on gaining side as against 7 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 1.55%, while Small cap index was up by 1.17%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 3.05%, Metal up by 2.20%, Basic Materials up by 1.77%, Utilities up by 1.76% and Auto was up by 1.70%, while Consumer Durables down by 0.29% was the only losing index on BSE.

The top gainers on the Sensex were ONGC up by 4.59%, Tata Steel up by 3.43%, Yes Bank up by 2.71%, Indusind Bank up by 2.29% and Adani Ports & SEZ up by 2.17%. On the flip side, Coal India down by 1.36%, ITC down by 1.04%, SBI down by 0.56%, TCS down by 0.43% and ICICI Bank down by 0.25% were the top losers.

Meanwhile, credit rating agency, ICRA in its latest report has said that the share of diesel passenger vehicles (PVs) in the domestic market, which dropped to 38 percent in 2017-18, is likely to fall below 25 percent post implementation of BSVI emission norms from April 2020. It pointed out that regular increase in the retail price of diesel in small doses every month since January 2013 has significantly narrowed down the retail price gap between petrol and diesel fuels, making cost economics of owning a diesel PV relatively less favourable now than in the past.

According to the report, as there is a high correlation between petrol and diesel price gap, lower fuel price gap has resulted in customer preference shifting away from diesel vehicles. Moreover, it said that given superior fuel economy of hybrid cars, hybridisation has also reduced importance of diesel models. It noted that lastly, the implementation of BSVI norms too will significantly widen the cost differential between petrol and diesel cars, leading to the eventual decline of share of diesel vehicles. It added that once BSVI emission norms come into force from April 2020, prices of diesel cars are expected to go up by about Rs 75,000 as compared to relatively modest Rs 20,000 of petrol cars.

The report further highlighted that currently, a diesel PV is priced about Rs 90,000 - Rs 1 lakh higher as compared to its petrol counterpart but with advent of Euro VI norms, this gap will increase further to Rs 1.5 lakh to Rs 1.75 lakh, thereby further reducing advantage of higher fuel efficiency. It also said that small car buyers will therefore find diesel cars uneconomical due to higher break-even. However, it noted that SUVs will continue to be dominated by diesel, though their share too is expected to reduce to sub-60 percent level over next 4 years from over 80 percent level at present.

The CNX Nifty traded in a range of 10,628.05 and 10,524.00. There were 41 stocks in green as against 9 stocks in red on the index.

The top gainers on Nifty were Indian Oil Corporation up by 5.36%, Indiabulls Housing Finance up by 4.96%, Hindalco up by 4.70%, HPCL up by 4.68% and Bajaj Finserv up by 4.44%. On the flip side, Bharti Infratel down by 1.04%, Tech Mahindra down by 0.89%, Coal India down by 0.86%, Asian paints down by 0.59% and SBI down by 0.56% were the top losers.

The European markets were trading in green; UK’s FTSE 100 rose 16.97 points or 0.22% to 7,733.71, France’s CAC increased 32.38 points or 0.58% to 5,580.83 and Germany’s DAX was up by 135.64 points or 1.06% to 12,990.73.

Asian equity markets ended mixed on Friday after US President Donald Trump cancelled the planned historic summit with North Korean leader Kim Jong Un and oil prices eased amid signs that Russia is willing to gradually increase output. Chinese stocks closed lower to log their worst week in more than one month as trade worries persisted. Meanwhile, Japanese shares finished marginally higher as the yen slipped from a two-week high against the dollar after the release of weak inflation data.