Post Session: Quick Review

Indian equity Markets traded with volatility for whole trading session and somehow managed to end in green terrain on Thursday, on the back of buying by participants amid mostly positive trade in Asian equities. Key equity indices traded flat with negative bias in morning deals, as traders remained cautious with a report that the goods and services tax (GST) collected in January (for December) is seen to be the lowest in the current fiscal. While the average collections during April-December were Rs 96,800 crore a month, the collections in January are around Rs 93,000 crore. After that, markets witnessed some buying, as traders found some solace with Crisil Ratings’ report showing that India's growth rate is likely to inch up to 7.3 percent in 2019-20, provided that there are normal rains and a stable political outcome of the general elections. It added that India is expected to clock a growth rate of 7.2 percent in the current financial year, up from 6.7 percent in 2017-18.

But, markets once again slipped into negative territory in mid-afternoon trade, as traders got wary with German Chancellor Angela Merkel’s statement that countries like India and China have begun affecting the world economy much more today and that needs to be taken into account for having a relook at the global trade and financial systems. However, markets bounced back from their losses in dying hour of trade and managed to close the session in green, due to buying witnessed in Realty, Energy and IT stocks. Traders also found some solace with the United Nations' World Economic Situation and Prospects (WESP) 2019 report stating that India's economy is expected to grow at 7.4 per cent during 2018-19 and improve to 7.6 per cent in the next fiscal. It added that growth continues to be underpinned by robust private consumption, a more expansionary fiscal stance and benefits from previous reforms. Some support also came in with reports that the Reserve Bank of India (RBI) will change its stance to 'neutral' next month and cut interest rates in June at the latest.

On the global front, Asian markets ended mostly higher on Thursday, as positive US earnings reports reassured investors that the world’s largest economy was on track. European markets were trading mostly in green. Back home, steel sector stocks were in focus after the Union Minister of State for Steel and Mines, Vishnudeo Sai said that India Steel Conference and Exhibition has been making new strides in contributing to the growth of the Indian steel sector. He also said that Indian steel sector has entered a new phase of development and the demand for steel will continue to grow.

The BSE Sensex ended at 36242.87, up by 134.40 points or 0.37% after trading in a range of 35996.68 and 36248.20. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.09%, while Small cap index was down by 0.62%.(Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.06%, Energy up by 1.00%, IT up by 0.85%, TECK up by 0.58% and Bankex up by 0.48%, while Telecom down by 1.90%, Industrials down by 0.98%, Capital Goods down by 0.83%, Auto down by 0.78% and Basic Materials down by 0.55% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 14.17%, Reliance Industries up by 1.66%, TCS up by 1.22%, HDFC up by 0.63% and Axis Bank up by 0.58%. (Provisional)

On the flip side, Tata Motors down by 2.80%, Tata Motors - DVR down by 2.67%, Sun Pharma down by 1.66%, Coal India down by 1.02% and ONGC down by 0.98% were the top losers. (Provisional)

Meanwhile, Crisil Ratings in its latest 'India Outlook FY20' report has stated that India’s economic growth may improve to 7.3% in the fiscal year 2019-20 (FY20), provided that there are normal rains, oil prices lower than 2018 and a stable political outcome of the general elections. It also said that the country is expected to clock a growth rate of 7.2% in the current financial year (FY19), up from 6.7% in 2017-18. The report noted that with the government likely to stick to a fiscal consolidation path, the pick-up in growth is expected to be only gradual.

As per the report, a change in the growth mix is on cards, with private sector likely to take over the baton from the government. Highlighting that fiscal health remains a key risk, it said the fiscal deficit is likely to be 3.3% of the gross domestic product (GDP) in the next fiscal. The deficit is budgeted at 3.3% in the current fiscal. However, the rating agency cautioned that if the general elections this year yield a fractured mandate and derail/delay the process of reforms, the implications on sentiments, investments and growth could be adverse. Besides, it said global crude oil prices are expected to soften to settle at around $60-65 average per barrel in fiscal 2020, compared with $68-72 average per barrel in fiscal 2019 as overall global demand slows. Though, some price pressure could be felt in response to the recently announced supply cuts by the Organization of Petroleum Exporting Countries (OPEC).

On the inflation front, it said fiscal 2019 would be the second consecutive year of sub-4% Consumer Price Index (CPI)-based inflation, from an average 4.5% in fiscal 2017, CPI inflation fell to 3.6% in fiscal 2018. It further expects that inflation at 3.7% for fiscal 2019, given the continuous and sharp decline in food prices and slowdown in global crude oil prices compared with a few months ago. It said current account deficit (CAD) would reduce to 2.4% of GDP in fiscal 2020 from 2.6% in fiscal 2019. Moreover, the rupee will remain volatile and settle at 72 to a dollar on an average by March 2020, compared with an estimate of 71 to a dollar by March 2019. It added that domestic interest rates, which had risen last year, are expected to soften in fiscal 2020.

The CNX Nifty ended at 10865.10, up by 33.60 points or 0.31% after trading in a range of 10798.65 and 10866.60. There were 27 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 17.29%, Reliance Industries up by 1.75%, TCS up by 1.46%, JSW Steel up by 1.12% and Dr. Reddys Lab up by 0.88%. (Provisional)

On the flip side, Bharti Infratel down by 5.14%, Tata Motors down by 2.55%, UPL down by 1.78%, Ultratech Cement down by 1.55% and Sun Pharma down by 1.54% were the top losers. (Provisional)

European markets were trading mostly in green; France’s CAC increased 31.28 points or 0.65% to 4,871.66 and Germany’s DAX rose 67.41 points or 0.61% to 11,138.95, while UK’s FTSE 100 was up by 9.34 points or 0.14% to 6,833.54.

Asian markets ended mostly higher on Thursday after US stocks fluctuated before ending higher overnight, reflecting positive reaction to quarterly results from the likes of IBM, United Technologies and Procter & Gamble. Though, the upside remained capped by fears over slackening global growth, a US government shutdown and the Sino-US trade conflict. Chinese Vice Premier Liu He will visit the United States next week for the next round of trade negotiations with Washington, following high-level talks between the world's two largest economies at the start of the year. Japanese shares ended marginally lower after data showed the manufacturing sector in Japan slipped into stagnation in January. The manufacturing PMI stood at 50.0, down from 52.6 in December.