Markets eke out gains in volatile session

Thursday turned out to be a volatile trading session but key Indian equity benchmarks managed to end the session in green terrain near their crucial psychological levels of 36,200 (Sensex) and 10,850 (Nifty). After a cautious start, the markets altered between green and red terrain frequently, impacted by 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. Anxiety also spread among the investors 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.

But, in the last leg of the trade, key indices held their heads above neutral lines, tracking firm cues from global markets. Traders took encouragement with Crisil Ratings’ latest 'India Outlook FY20' report stating 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 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. The street got relief, amid 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. Some support came 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.

Back home, selected stocks of metal sector ended higher, aided by the Union Minister of State for Steel and Mines, Vishnudeo Sai’s statement 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. Further, food processing companies stocks remained in limelight, after the Centre approved an agreement between India and Japan for cooperation in the food processing sector. This move will promote understanding of best practices in food processing in the two countries and also improve market access. Agriculture sector stocks also remained in focus with the government think tank Niti Aayog’s statement that doubling Farmers Income by 2022 cannot be achieved if they are not able to bring reforms in Agriculture sector. He also asserted that the problems in the agriculture credit system should be addressed.

On the global front, European markets were trading in green, after Lithuania's industrial output expanded in December, led by growth in output in the utilities sector and mining and quarrying. The preliminary figures from the Department of Statistics showed that industrial production rose by a seasonally and working-day adjusted 1.2 percent month-on-month in December. Manufacturing output edged up 0.6 percent. The rise was led by a 7.3 percent increase in electricity, gas, steam and air conditioning supply and a 7.2 percent rise in mining and quarrying. Asian markets ended mostly in green, even though the manufacturing sector in Japan fell into stagnation in December. The latest survey from Nikkei revealed with a manufacturing PMI score of 50.0. That's down from 52.6 in December and it lands right on the line that separates expansion from contraction.

Finally, the BSE Sensex gained 86.63 points or 0.24% to 36,195.10, while the CNX Nifty was up by 18.30 points or 0.17% to 10,849.80.

The BSE Sensex touched a high and a low of 36,258.28 and 35,996.68, respectively and there were 14 stocks advancing against 17 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index lost 0.15%, while Small cap index was down by 0.59%.

The top gaining sectoral indices on the BSE were Realty up by 2.05%, Energy up by 0.94%, IT up by 0.76%, TECK up by 0.49% and FMCG up by 0.17%, while Telecom down by 1.97%, Industrials down by 0.95%, Auto down by 0.85%, Capital Goods down by 0.73% and Basic Materials down by 0.52% were top the losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 8.39%, Reliance Industries up by 1.61%, TCS up by 1.17%, HDFC up by 0.58% and SBI up by 0.51%. On the flip side, Tata Motors - DVR down by 2.93%, Tata Motors down by 2.72%, Sun Pharma down by 1.92%, Coal India down by 0.95% and Bajaj Auto down by 0.90% were the top losers.

Meanwhile, underlining India as a bright spot for investors, the Union Minister Nirmala Sitharaman has said that the Goods and Services Tax (GST) is the biggest reform taken as part of systemic reforms. She further said that the government has ensured that systemic reforms were taken up with courage.

Union Minister also said that the government has made it a point that systemic reforms were done in such a way that India's growth potential was realised fully, further adding that the biggest reform, GST in the last 60 years was to make India as one market and that was achieved under Prime Minister Modi.

While talking about the economic growth, Sitharaman said that the India maintained the growth well above 6.5 per cent, sometimes touching seven and IMF's prediction is that the country is likely to be over seven per cent in the coming years too. Besides, she highlighted that the country has climbed the World Bank's Ease of Doing business index also, on the back of many steps taken by the government.

The CNX Nifty traded in a range of 10,866.60 and 10,798.65. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 14.32%, Reliance Industries up by 1.85%, TCS up by 1.41%, JSW Steel up by 1.10% and Tech Mahindra up by 1.01%. On the flip side, Bharti Infratel down by 5.38%, Tata Motors down by 2.61%, UPL down by 1.95%, UltraTech Cement down by 1.73% and Sun Pharma down by 1.71% were the top losers.

European markets were trading mostly in green; France’s CAC gained 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.