Post Session: Quick Review

A massive sell-off pulled the key Indian equity benchmarks lower to close the Thursday’s session in red terrain near their intraday low points. The markets made a positive opening, as traders took some support with a report that the government has cleared pending Goods and Service Tax (GST) refunds to the tune of Rs 38,062 crore of exporters as on June 16, 2018. Sentiments on the street was also positive with a private report stating that the credit growth in the micro, small and medium enterprises (MSME) sector is improving with the overall exposure reaching the highest level in over a year and impacts of demonetisation and the GST also seem to be subsiding. As per the report the overall credit exposure has shown the highest growth in last five quarters at Rs 54.20 trillion as of March 31, 2018, with MSMEs segment constituting Rs 12.6 trillion (23%) of the commercial credit outstanding. Some optimism also came with a report highlighting that Prime Minister Narendra Modi showcased his government’s ‘unprecedented’ work in the agriculture sector, including doubling of the budget to Rs 2.12 lakh crore. Modi also reiterated that his government is working to double farm income by 2022.

However, the bourses soon turned choppy to end the session on negative note, mirroring weak global cues. Domestic sentiments got hit with Former National Association of Software and Services Companies (NASSCOM) president R Chandrashekhar’s statement that the economy could be disrupted if job growth was not constant. He added that the government statistics showed that nearly four million jobs in the formal sector were created from September 2017 to March 2018, of which about 50% were in the service sector. The market participants took note of a private report stating that FII flows have seen a bumpy ride so far this year, with a meagre investment of $15 million. Meanwhile, in retaliation against the US' new global tariffs on certain steel and aluminium products, Indian government has hiked customs duty on some agricultural and steel products that are imported from the US. The import duty hike will come into effect from August 4, 2018.

On the global front, European markets were trading red; amid looming threat of a full-blown trade war between the world's two largest economies. In response to US President Donald Trump's decision to impose tariffs on EU steel and aluminum, the European Union will start charging import duties of 25% on a range of US products on Friday. Further, Asian markets ended in red, as the potential for a deepening trade dispute with the US taking the edge off of traders’ appetite in the China. The US and China are still staring down their noses at each other, unflinching as they take turns announcing further tariff packages against each other. Besides, central bankers voiced concerns about the impact a trade war could have on the global economy.

Back home, cement stocks ended in red terrain, on concerns of a delay in the pickup of demand trends, lower-than-expected pricing realizations and higher-than-expected increases in costs. Further, coal stocks remained in focus on a private report stating that India's thermal coal import is likely to increase to 145 million tonne (MT) in 2018, and the uptrend would continue in the next four years. The report noted that the outlook for thermal coal import demand in India is improving due to strong demand growth and the inability of domestic supply to keep pace.

The BSE Sensex ended at 35477.35, down by 69.98 points or 0.20% after trading in a range of 35433.23 and 35678.69. There were 8 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.46%, while Small cap index was down by 0.66%.(Provisional)

The lone gaining sectoral indices on the BSE was Energy up by 0.24%, while Telecom down by 1.58%, PSU down by 1.21%, Utilities down by 1.07%, Power down by 1.00% and Capital Goods down by 0.89% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 1.62%, HDFC up by 0.95%, Reliance Industries up by 0.89%, Adani Ports & SEZ up by 0.79% and Tata Motors up by 0.44%. On the flip side, Mahindra & Mahindra down by 2.52%, Power Grid Corporation down by 2.45%, ONGC down by 2.27%, Sun Pharma down by 1.63% and Asian Paints down by 1.44% were the top losers. (Provisional)

Meanwhile, the Central Board of Indirect Taxes and Customs (CBIC) said that the government cleared pending Goods and Service Tax (GST) refunds to the tune of Rs 38,062 crore of exporters as on June 16, 2018. Under GST, exporters are required to pay IGST on exports and then claim refunds. The second type of refunds to exporters under GST involves refund of GST paid on purchase of inputs. CBIC highlighted that in all, Rs 21,142 crore (IGST refunds), Rs 9,923 crore (RFD-01A refund by CBIC) and Rs 6,997 crore (RFD-01A refund by states), all totalling Rs 38,062 crore has been sanctioned.

During the refund fortnight, the government cleared the pending refunds of integrated GST (IGST) of exporters based on shipping bill. Also those businesses making zero rated supplies or those wanting to claim input credit, and filled up Form RFD-01A were also given refunds.

The CBIC underlined that as on June 16, Rs 6,087 crore of IGST refunds has been sanctioned in the refund fortnight. Besides, RFD-01A claims worth Rs 1,548 crore were sanctioned by the centre and Rs 2,290 crore by the states during the fortnight. This is out of the Rs 9,816 crore RFD-01A refund claims received by the centre as on April 30, 2018. Therefore, the total IGST and RFD-01A refund claims sanctioned by the government during the refund fortnight was Rs 9,925 crore.  The amount of RFD-01A refund claims disposed as on June 16, by the centre stood at Rs 10,824 crore and by the states at Rs 7,287 crore. Thus, the total amount of RFD-01A claims disposed off stands at Rs 18,111 crore.

Last month, the government had said about Rs 14,000 crore of refunds of exporters were stuck on account of various mismatches. The CBIC had organised the special refund drive to fast track clearances.

The CNX Nifty ended at 10739.30, down by 32.75 points or 0.30% after trading in a range of 10731.75 and 10809.60. There were 13 stocks advancing against 37 stocks declining on the index. (Provisional)

The top gainers on Nifty were ICICI Bank up by 1.59%, Bajaj Finserv up by 1.12%, Reliance Industries up by 0.97%, Zee Entertainment up by 0.86% and Adani Ports & SEZ up by 0.79%. On the flip side, Mahindra & Mahindra down by 2.92%, ONGC down by 2.58%, Power Grid Corporation down by 2.54%, Dr. Reddy’s Lab down by 2.37% and Titan Co down by 1.97% were the top losers. (Provisional)

European markets were trading mostly in red; Germany’s DAX decreased 117.84 points or 0.94% to 12,577.32, France’s CAC was down by 22.24 points or 0.42% to 5,350.07 and UK’s FTSE 100 surged 3.71 points or 0.05% to 7,631.11.

Asian equity markets ended mostly lower on Thursday as caution prevailed amid lingering worries over Sino-US trade spat. Oil prices eased a touch as nerves grew ahead of Friday's meeting between OPEC and other big producers, including Russia, with growing expectations that the Vienna talks could result in an agreement to increase crude supplies. Speculation of imminent monetary policy easing in China helped to limit overall losses to some extent. Chinese shares ended lower as trade war woes overshadowed media reports that Beijing will undertake measures to boost credit supply to smaller companies. Meanwhile, Japanese shares eked out modest gains as the yen weakened and technology stocks followed their US peers higher.