Post Session: Quick Review

Indian equity benchmarks extended their losing streak for second straight session and ended with losses of more than half a percent, as traders remained wary owing to weak global cues and in view of June derivatives expiry. The market breadth, indicating the overall health of the market, was weak. Domestic indices began trading on a negative note, amid feeble global cues. Market sentiments remained fragile with outgoing chief economic adviser Arvind Subramanian’s statement that apart from high oil prices, the biggest headwind for India’s growth prospects was stigmatised capitalism, or the view that the private sector could not be trusted.  Traders shrugged off a private report highlighting that revenues of micro, small and medium enterprises surged by 27% and operating profit by 66% in 2017-18, signaling that vibrancy is returning to the sector after challenges posed by demonetisation and GST rollout.

Selling intensified during second half of the day, as traders remained worried with a report stating that the Goods and Services Tax (GST) investigation wing has detected tax evasion of over Rs 2,000 crore in two months, and data analysis reveals that only 1% of over 1.11 crore registered businesses pay 80% of the taxes. Some cautiousness also prevailed in the markets with a report stating that the US has issued a strict warning and threatened all countries including India and China to stop oil imports from Iran or face sanctions. The market participants failed to draw any sense of relief from interim Finance Minister Piyush Goyal’s statement that cabinet has approved establishment of two strategic petroleum reserves (SPRs) with a total capacity of 6.5 mln tonnes. India has built three SPR of 5.33 million tonnes in southern India equivalent to meet 10 days of crude requirement.

On the global front, Asian markets ended mostly in red, as investors were worried that the Trump administration’s approach to trade is harming global economic growth - even as the White House approach to Chinese investment in U.S. technology companies appeared to be softening. European markets were trading in red in early deals on Thursday as concerns over global trade returned.

Back home, telecom stocks ended lower after TRAI indicated that the gross revenue of telecom operators slipped 1.76 percent year-on-year during the quarter ending March 2018, while licence fee and spectrum charges, that government collects from them, fell 12.7 percent and 23.4 percent respectively. Besides, shares of Oil marketing companies, Aviation and Tyre companies fell after international crude oil prices spiked further.

The BSE Sensex ended at 35003.96, down by 213.15 points or 0.61% after trading in a range of 34937.15 and 35282.40. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell by 1.60%, while Small cap index was down by 1.57%. (Provisional)

The only gaining sectoral indices on the BSE were Telecom up by 0.42% and Metal up by 0.17%, while Consumer Durables down by 2.41%, Oil & Gas down by 2.32%, Energy down by 2.01%, Realty down by 1.86% and PSU down by 1.68% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 2.02%, Mahindra & Mahindra up by 1.87%, Infosys up by 1.52%, Kotak Mahindra Bank up by 1.31% and Bharti Airtel up by 1.01%. (Provisional)

On the flip side, Tata Motors down by 3.15%, ICICI Bank down by 2.94%, Tata Motors - DVR down by 2.75%, Coal India down by 2.16% and Yes Bank down by 2.12% were the top losers. (Provisional)

Meanwhile, in order to enhance insurance coverage and boost exports, the Cabinet Committee on Economic Affairs (CCEA) has given green signal to capital infusion of Rs 2,000 crore in Export Credit Guarantee Corporation (ECGC). The capital infusion will be done over the three financial years 2017-20.

The break-up of the infusion would be Rs 50 crore in 2017-18, Rs 1,450 crore in 2018-19, and Rs 500 crore in 2019-20. The infusion would enhance insurance coverage to micro, small and medium enterprises (MSME) exports and strengthen India’s exports to emerging and challenging markets like Africa and Latin American countries. More than 85% of customers benefitted by ECGC’s covers are MSMEs.

The Commerce Ministry has said that with enhanced capital, ECGC’s underwriting capacity and risk to capital ratio would improve considerably and it would be in a better position to support Indian exporters tap new and unexplored markets. ECGC provides export credit insurance services to facilitate exports from the country and protect exporters from losses due to non-payment of dues by overseas buyers.

The CNX Nifty ended at 10587.55, down by 83.85 points or 0.79% after trading in a range of 10557.70 and 10674.20. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 1.82%, Mahindra & Mahindra up by 1.78%, Kotak Mahindra Bank up by 1.54%, Infosys up by 1.54% and Hindalco up by 1.35%. (Provisional)

On the flip side, Tech Mahindra down by 7.20%, HPCL down by 5.66%, Titan Co down by 4.48%, Indiabulls Housing Finance down by 3.95% and BPCL down by 3.74% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 83.08 points or 0.68% to 12,265.53, France’s CAC shed 17.04 points or 0.35% to 5,310.16 and UK’s FTSE 100 was down by 8.60 points or 0.11% to 7,613.09.

Asian equity markets ended mostly lower on Thursday as investors grappled with conflicting signals from senior officials in the Trump administration on trade policy. Japanese shares ended largely unchanged near one-month lows due to uncertainty over the Trump administration's trade policy. However, Chinese shares ended lower amid renewed trade tensions and ahead of Chinese manufacturing and non-manufacturing data due on Saturday.