Post Session: Quick Review

Indian equity Markets ended volatile day of trade marginally in green, with frontline gauges swinging between red and green terrain throughout the session. In the morning trade, key indices traded on optimistic note, on the back of buying by participants amid positive global cues. Traders took some encouragement with ICRA’s report that  while the number of insolvency cases are expected to pile up over the next few quarters, timely conclusion of cases within the law mandated 180-270 days can free up as much as Rs 67,000 crore to the system. Some support also came with the annual index releasing by an anti-graft watchdog that India has improved its ranking on a global corruption index in 2018, while its neighbour China lagged far behind. 

However, key indices pared early gains to trade flat in afternoon session, as traders remained cautious ahead of the third quarter results of key companies. Some concern also came with report that the United States and China launch a critical round of trade talks amid deep differences over US demands for structural economic reforms from Beijing that will make it difficult to reach a deal before a March 2 US tariff hike. Though, markets once again entered into green terrain and managed to keep their heads above water in dying hour of trade, as traders found solace with the Reserve Bank of India’s (RBI) statement that it will inject Rs 37,500 crore into the system through the purchase of government securities in February to increase liquidity. The RBI also said it has been monitoring the evolving liquidity conditions and durable liquidity requirements of the system.

On the global front, Asian markets ended mixed on Wednesday, while European markets were trading in green, as traders awaited a Federal Reserve policy meeting and U.S.-China talks. Back home, banking sector stocks ended higher with SBI in its Ecowrap report stating that Public sector banks (PSBs) will require another Rs 50,000 crore fund infusion in 2019-20 to help enable credit growth of 11 per cent. Besides, Auto Parts & Equipment companies stocks ended higher, as the government slashed customs duty on import of parts and components for electric vehicles (EVs). The customs duty has been lowered to 10-15 per cent from 15-30 per cent. 

The BSE Sensex ended at 35627.23, up by 34.73 points or 0.10% after trading in a range of 35490.97 and 35850.41. There were 15 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.25%, while Small cap index was up by 0.79%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.90%, Bankex up by 1.51%, Basic Materials up by 1.29%, Capital Goods up by 1.18% and Industrials up by 0.76%, while Telecom down by 1.32%, Energy down by 0.96%, FMCG down by 0.88%, Oil & Gas down by 0.80% and Realty down by 0.51% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 5.77%, Tata Steel up by 5.12%, Axis Bank up by 4.60%, HCL Tech. up by 3.03% and Bajaj Finance up by 2.35%. (Provisional)

On the flip side, Bajaj Auto down by 2.68%, Kotak Mahindra Bank down by 2.24%, Bharti Airtel down by 1.48%, HDFC down by 1.45% and Yes Bank down by 1.43% were the top losers. (Provisional)

Meanwhile, in a bid to help enable credit growth of 11%, SBI in its 'Ecowrap' report has stated that public sector banks (PSBs) will require fund infusion of another Rs 50,000 crore in 2019-20. In December 2018, the government enhanced bank recapitalisation outlay from Rs 65,000 crore to Rs 1,06,000 crore for the current fiscal. As of December 2018, a total amount of Rs 51,513 crore has been infused into PSBs.

SBI said ‘We also request that government should infuse the promised recapitalisation amount of Rs 54,487 crore (net of promised Rs 1,06,000 crore) by March 2019. This will act as a big enabler for banks. For the record, PSBs may require another Rs 50,000 crore of growth capital in FY20’. It added that this one year window has afforded an opportunity to PSBs by an estimated relief of around Rs 35,000-38,000 crore.

As per the report, assuming an 11% credit growth in FY20 with credit risk weighted assets of 70% (RWAs to Gross Advances ratio declined from 80.26% in Sep-17 to 71.20% in Sep-18), PSBs may be requiring around Rs 50,000 crore growth capital in FY20. However, it said the same also depends upon some major variables that is alternate long term investor, recoveries from NCLT, investment environment, out of NCLT settlements, MTM provisioning of investments, additional or provision write-back.

The CNX Nifty ended at 10663.10, up by 10.90 points or 0.10% after trading in a range of 10612.85 and 10710.20. There were 26 stocks advancing against 24 stocks declining on the index. (Provisional)

The top gainers on Nifty were ICICI Bank up by 6.18%, Tata Steel up by 5.53%, Axis Bank up by 4.68%, Zee Entertainment up by 3.27% and HCL Tech. up by 3.19%. (Provisional)

On the flip side, Indiabulls Housing Finance down by 3.36%, Adani Ports &SEZ down by 3.26%, Bajaj Auto down by 2.85%, Bharti Infratel down by 2.34% and Kotak Mahindra Bank down by 2.31% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 86.83 points or 1.29% to 6,833.93, France’s CAC added 39.60 points or 0.81% to 4,928.18 and Germany’s DAX was up by 8.52 points or 0.08% to 11,218.83.

Asian markets ended mixed on Wednesday as strong earnings from US industrial giant 3M Co as well as comments from Apple's chief that US-China trade tensions were easing helped investors put growth and trade worries on the back burner. Oil prices edged up on concerns about supply disruptions after the United States imposed sanctions on state-owned Venezuelan oil company PDVSA. While, the dollar index dipped slightly ahead of the Fed's policy statement while the British pound nursed losses after British lawmakers rejected most amendments that sought to avoid Britain leaving the European Union without a deal. Chinese shares ended lower as investors awaited the conclusion of a Federal Reserve policy meeting and US-China talks. China's Vice Premier Liu He is in Washington this week to meet US officials, including President Trump. Japanese shares closed down on earnings concerns after drugmaker Dainippon Sumitomo Pharma said a clinical trial for a new drug failed to complete.