Post Session: Quick Review

Indian equity benchmarks ended the last trading day of calendar year 2018 on a flat note with negative bias on Monday, due to some selling witnessed in Telecom and Energy stocks. With that, the markets halted three consecutive sessions of gaining streak. Trading began on a positive note, tracking positive global cues. Local investors also cheered with the Confederation of Indian Industry’s (CII) statement that the country is expected to witness strong economic growth in 2019, after it has emerged as the fastest growing major world economy this year despite growing global vulnerabilities. It added that better demand conditions, settled GST implementation, capacity expansion from growing investments in infrastructure, continuing positive effects of reform policies and improved credit offtake especially in the services sector at 24% will sustain the robust GDP growth of 7.5% in 2019. Market participants got some support with the government’s statement that the net direct tax collection till December 20 this fiscal amounted to Rs 7.36 lakh crore, a growth of 14% over the same period a year ago. This is 64% of the Budget estimate for direct tax collection in the current fiscal. Also, markets received some support from strengthening of rupee against the dollar.

However, markets reversed their entire gains and traded with marginal losses in the afternoon session, as traders turned pessimistic with a report that inflation seems to have become a double-edged sword for policy makers with political opponents attacking the government over farmers getting hit due to low prices for agricultural produce, even as the rate of price rise in 2018 has mostly been contained within the targeted comfort zone. Street remained disappointed with a private report stating that restrictions on foreign e-commerce companies would have a long-term negative impact on the foreign direct investment as well as consumers in India. But, further down-ward move got restricted as traders found some solace with a private report said that India has pipped its neighbour in 2018 for the first time in the last 20 years in terms of attracting foreign direct investment (FDI). With 253 inbound deals amounting to $39.515 billion, India’s annual FDI was higher than that of China’s so far this calendar year.

On the global front, Asian markets ended mixed on Monday in subdued New Year's Eve trading. Cautiousness persisted during the trade, as weak manufacturing data from China offset signs of progress in trade talks between the United States and China. European markets were trading in green. Back home, healthcare sector was in focus with private report stating that healthcare sector may see further consolidation in 2019 with tightening of regulatory environment set to make it difficult for small players to stay afloat in a highly competitive market.

The BSE Sensex ended at 36052.26, down by 24.46 points or 0.07% after trading in a range of 36033.95 and 36285.46. There were 18 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.44%, while Small cap index was up by 0.66%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.35%, Basic Materials up by 0.95%, Healthcare up by 0.68%, Consumer Durables up by 0.67% and Industrials up by 0.33%, while Telecom down by 0.85%, Energy down by 0.32%, Realty down by 0.22%, Oil & Gas down by 0.17% and FMCG down by 0.07% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 1.51%, Tata Steel up by 1.46%, Vedanta up by 1.45%, Tata Motors up by 1.14% and Indusind Bank up by 1.03%. (Provisional)

On the flip side, Bharti Airtel down by 1.22%, Axis Bank down by 0.89%, Coal India down by 0.83%, Hero MotoCorp down by 0.78% and HDFC down by 0.76% were the top losers. (Provisional)

Meanwhile, after India emerged as the fastest growing major world economy this year despite growing global vulnerabilities, the Confederation of Indian Industry (CII), in its ‘Growth Outlook for 2019’ report, has stated that the country will witness strong economic growth in 2019. It added that the positive outlook is buttressed by strong drivers emanating from services sector and better demand conditions arising out of poll spend, with the general elections slated next year. It highlighted that better demand conditions, settled Goods and Services Tax (GST) implementation, capacity expansion from growing investments in infrastructure, continuing positive effects of reform policies and improved credit offtake especially in the services sector at 24% will sustain the robust Gross Domestic Product (GDP) growth at around 7.5% in 2019.

The chamber pointed out that despite 2018 being filled with external vulnerabilities arising out of rising oil prices, trade wars between major global trading partners and US monetary tightening, India outshined as the world's fastest growing major economy. It has identified seven key drivers for growth that need to be fostered and suggested policy actions for robust GDP growth to continue in 2019. Among key growth drivers, CII hopes the GST Council will consider extending the tax to currently exempted sectors such as fuel, real estate, electricity and alcohol.

CII outlined that credit availability has been a challenge, particularly for the micro, small and medium enterprises, as credit flow to industry grew by a mere 2.3% in first half of the current financial year. Besides, the process of insolvency resolution has taken shape, the chamber feels the government should consider setting up additional benches of the National Company Law Tribunal to strengthen the judicial infrastructure for easier and faster exit of distressed businesses.

The industry body further said the government will continue to place high priority on simplifying business procedures in 2019, especially in terms of working with states for grassroots improvements. On agriculture reforms, CII suggested that it is important to persuade states to implement the Agriculture Produce and Livestock Marketing Model Act, which has been implemented in just four states, to strengthen agriculture produce marketing.

The CNX Nifty ended at 10857.55, down by 2.35 points or 0.02% after trading in a range of 10853.20 and 10923.55. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were JSW Steel up by 3.02%, Sun Pharma up by 1.42%, Vedanta up by 1.38%, Tata Steel up by 1.28% and Tech Mahindra up by 1.21%. (Provisional)

On the flip side, Bharti Airtel down by 1.53%, Bharti Infratel down by 1.43%, HPCL down by 0.96%, Hero MotoCorp down by 0.93% and NTPC down by 0.93% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 9.16 points or 0.14% to 6,743.13 and France’s CAC was up by 34.66 points or 0.74% to 4,713.40.

Asian markets ended mixed on Monday in subdued New Year's Eve trading. Cautiousness persisted during the trade, as weak manufacturing data from China offset signs of progress in trade talks between the United States and China. China's manufacturing sector fell into contraction in December, the latest survey from the National Bureau of Statistics showed with a PMI score of 49.4, down from the no-change mark 50.0 in November. The bureau also said its non-manufacturing PMI climbed to 53.8 from 53.4 in the previous month. Hong Kong's shares ended higher after US President Donald Trump on Saturday said that he had a ‘long and very good call’ with Chinese President Xi Jinping and that a comprehensive trade deal between the United States and China is moving along very well, raising hopes for a breakthrough in the trade dispute. Separately, Chinese state media cited President Xi Jinping as saying he believed both sides wanted ‘stable progress.’ Meanwhile, several regional bourses were closed for New Year's Eve, including Japan, South Korea, China, Indonesia and Taiwan.