Post Session: Quick Review

Indian equity benchmarks ended Friday’s trade in green terrain, recapturing their crucial 35,700 (Sensex) and 10,700 (Nifty) levels. After a positive start markets pared all of their gains to enter into red terrain as traders turned pessimistic with a private report that despite crossing the Rs 1-trillion mark twice this year, the goods and services tax (GST) collections are running well behind the budgeted target. As opposed to a monthly target of Rs 1.04 trillion, the monthly run rate adjusting for refunds, works out to around Rs 89,600 crore. This could force the government to either cut its capital expenditure this year or roll over spending on account of subsidies to next year in order to meet the fiscal deficit target. However, markets regained momentum and entered into green terrain with traders taking solace from Finance Minister Arun Jaitley’s statement that enacting the Insolvency and Bankruptcy Code (IBC) has helped lenders get Rs 80,000 crore in 66 cases and another about Rs 70,000 crore is likely to be recovered in the remaining months of the current financial year.

Traders also took some support with report that the Central Board of Indirect Taxes and Customs (CBIC) has allowed businesses to correct any error or omission in filing of final sales return or GSTR-1 for the period July 2017-March 2018. Now businesses can correct the errors in the returns to be filed for January-March 2019. Traders shrugged off weak services PMI data. India’s services sector activity fell in month of December, as growth of new work and activity moderated from November’s recent high. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index slipped to 53.2 in December from 53.7 in November. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- too eased to 53.6 in December from 54.5 in November.

Firm opening in European counters too aided sentiments with all the major indices trading in green in early deals even though British construction sector growth was the weakest in three months in December amid a slower rise in commercial work. The survey data from IHS Markit showed that the CIPS Purchasing Managers' Index, or PMI, fell to 52.8 from 53.4 in November. Asian markets ended mostly in green although underlying sentiment likely remain cautious amid risk-off sentiment prevailing globally on worries over slowing global growth.

Back home, banking sector stocks edged higher with Finance Minister Arun Jaitlet’s statement that commercial banks were likely to recover Rs 70,000 crore ($9.95 billion) of bad loans by the end of March, helped by resolution of 12 large cases. NBFCs stocks settled in green despite ratings agency ICRA’s report that the ongoing issues with the non-bank lenders will crimp the operating profits of such companies by up to 0.50%. It said the decline in profitability will be primarily due to increase in the cost of funds, slowdown in portfolio growth and cost of carrying additional liquidity due to the troubles. Most of the sugar stocks ended in sweet sport after industry body ISMA said that India's sugar production increased by 7 percent to 110.52 lakh tonnes in the first quarter of 2018-19 marketing year that started in October.

The BSE Sensex ended at 35708.57, up by 194.86 points or 0.55% after trading in a range of 35382.08 and 35744.20. There were 21 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.47%, while Small cap index was up by 0.14%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 3.13%, Metal up by 1.78%, PSU up by 1.45%, Utilities up by 1.04% and Bankex was up by 0.99%, while IT down by 1.12%, TECK down by 0.52%, Consumer Durables down by 0.15%, FMCG down by 0.13% and Capital Goods down by 0.09% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Vedanta up by 3.22%, Bharti Airtel up by 3.15%, Yes Bank up by 3.13%, Tata Motors up by 2.95% and Tata Motors - DVR up by 2.69%. On the flip side, HCL Tech. down by 1.69%, Infosys down by 1.12%, TCS down by 1.02%, Hero MotoCorp down by 0.74% and Indusind Bank down by 0.65% were the top losers. (Provisional)

Meanwhile, Finance Minister Arun Jaitley said enacting the Insolvency and Bankruptcy Code (IBC) has helped lenders get Rs 80,000 crore in 66 cases. It is expected that Rs 70,000 crore will be realised by end of current financial year (FY19).

He further said National Company Law Tribunal (NCLT) had started receiving corporate insolvency cases by the end of 2016 and so far 1,322 cases have been admitted by it. A total of 4,452 cases have been disposed at pre-admission stage and 66 have been resolved after adjudication. 260 cases have been ordered for liquidation. He added that NCLT has become a trusted forum of high credibility.

Besides, he asserted that the increase in conversion of NPAs into standard accounts and decline in new accounts falling in NPA category show a definite improvement in the lending and borrowing behaviour. The early harvest through the IBC process has been extremely satisfactory. It has changed the debtor - creditor relationship. The creditor no longer chases the debtor.

The CNX Nifty ended at 10731.20, up by 58.95 points or 0.55% after trading in a range of 10628.65 and 10741.05. There were 33 stocks advancing against 17 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 5.41%, Yes Bank up by 3.23%, Vedanta up by 3.17%, Tata Motors up by 3.07% and Bharti Airtel up by 2.71%. On the flip side, HCL Tech. down by 1.72%, Tech Mahindra down by 1.42%, Infosys down by 1.34%, Hero MotoCorp down by 0.99% and Indusind Bank down by 0.95% were the top losers. (Provisional)

All the European markets were trading in green; UK’s FTSE 100 gained 71.73 points or 1.07% to 6,764.39, Germany’s DAX rose 157.57 or 1.51% points to 10,574.23 and France’s CAC was up by 52.94 points or 1.15% to 4,664.43.

Asian markets ended mostly higher on Friday, with solid services sector data and hopes of trade talks lifting Chinese and Hong Kong markets sharply higher while Japanese shares succumbed to heavy selling as trading resumed after a long week of holidays. China's commerce ministry said China and the United States would hold vice-ministerial level trade talks in Beijing on January 7-8. As per report, Chinese slowing growth is having an impact on Apple and other American companies, but sales should recover once Washington strikes a trade deal with Beijing. On the data front, growth in China's services sector edged higher in December, a private survey showed, helping ease investor concerns over growth. The Caixin/Markit services PMI rose to a six-month high of 53.9 from 53.8 in November. Elsewhere, the private sector in Hong Kong continued to contract in December, although at a slightly slower rate, the latest PMI from Nikkei showed.