Post Session: Quick Review

Erasing all their intraday gains, Indian equity benchmarks ended volatile day of trade marginally in red on Thursday, after Reserve Bank of India’s (RBI’s) decision to lower the rate repo rate by 25 basis points to 6.25 percent. The Monetary Policy Committee (MPC) changed the policy stance to ‘neutral’ from ‘calibrated tightening’. It also pegged H1 FY20 (April-September) inflation at 3.2-3.4 percent, assuming a normal monsoon. Markets started the session on positive note, as traders took some encouragement with Moody's Investors Service’s statement that the direct cash transfer programme for farmers and tax relief steps for the middle-class will give a fiscal stimulus of about 0.45 percent of GDP, and support growth through increased consumption, though at a fiscal cost. Some optimism also came with report that the government has allowed export of bio-fuels from special economic zones (SEZs) and export-oriented units (EoUs) with certain conditions, according to a notice of the directorate general of foreign trade. In August 2018, the government imposed restrictions on export of bio-fuels for non-fuel purposes.

In the afternoon session, the rate cut from the RBI has made the markets move in a see-saw manner. But, key indices managed to keep their heads above water, taking support from the commerce ministry proposed several measures such as setting up of a separate fund, single-window e-marketplace and a law to define the role of various stakeholders, as part of the draft national logistics policy. However, barometers were unable to hold on to gains for long as some anxiety remained among the investors due to some selling witnessed in Energy and Power stocks.

On the global front, Asian markets ended mixed on Thursday, while European markets were trading mostly in red as investors shrugged off US President Donald Trump's State of the Union address and looking for progress in the US-China trade dispute, ahead of crucial talks in Beijing next week. Back home, power stocks were in focus, as a report stated that the government gave its nod to a proposal for setting up 12,000 MW grid-connected solar photovoltaic (PV) power projects with an estimated viability gap funding of Rs 8,580 crore.

The BSE Sensex ended at 36927.37, down by 47.86 points or 0.13% after trading in a range of 36898.80 and 37172.18. There were 20 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices were trading in green; the BSE Mid cap index rose 0.70%, while Small cap index was up by 0.73%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.51%, Auto up by 1.69%, Healthcare up by 1.41%, Consumer Discretionary Goods & Services up by 1.04% and Basic Materials up by 0.76%, while Utilities down by 1.09%, Energy down by 0.84%, Power down by 0.61%, Capital Goods down by 0.27% and Realty down by 0.08% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 4.39%, Bajaj Auto up by 2.91%, Tata Motors up by 2.41%, Tata Motors - DVR up by 2.17% and Coal India up by 1.82%. (Provisional)

On the flip side, Reliance Industries down by 1.74%, Power Grid down by 1.47%, HDFC down by 1.22%, Larsen & Toubro down by 1.09% and Indusind Bank down by 0.81% were the top losers. (Provisional)

Meanwhile, with an aim to meet additional expenses, the government has decided to raise additional Rs 36,000 crore through dated securities during the current financial year (FY19). The government will borrow additional Rs 36,000 crore through two tranches of Rs 18,000 crore each during March 11-15 and March 18-22. As per the calendar issued previously, the last tranche for borrowing through government bonds was to complete in the week ending March 8, 2019.

The finance ministry stated that in order to enable institutional and retail investors plan their investments efficiently and provide transparency and stability to the government securities market, an indicative calendar for issuance of government dated securities for the remaining period of the fiscal year 2018-19 (February 4 to March 31) has been prepared in consultation with the Reserve Bank of India (RBI).

The Ministry said the government, in consultation with the RBI, will continue to have the flexibility to bring about modifications in the calendar in terms of notified amount, issuance period, maturities and others. The government may also issue different types of instruments, including instruments having non-standard maturity and floating rate bonds (FRBs), depending upon the requirement of the government.

Besides, the Ministry added the government reserves the right to exercise the greenshoe option to retain additional subscription up to Rs 1,000 crore each against any one or more of the above security. Though, the exercise of the greenshoe option within one or more securities in an auction will be within the overall notified amount for the auction.

The CNX Nifty ended at 11051.70, down by 10.75 points or 0.10% after trading in a range of 11043.60 and 11118.10. There were 32 stocks advancing against 18 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 5.66%, Sun Pharma up by 4.22%, Eicher Motors up by 3.87%, Bajaj Auto up by 2.91% and Bharti Infratel up by 2.68%. (Provisional)

On the flip side, JSW Steel down by 2.38%, Larsen & Toubro down by 1.89%, Reliance Industries down by 1.70%, Power Grid down by 1.39% and HDFC down by 1.21% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC was down by 16.54 points or 0.33% to 5,062.51 and Germany’s DAX fell 59.25 points or 0.52% to 11,265.47, while UK’s FTSE 100 was up by 3.49 points or 0.05% to 7,176.58.

Asian markets ended mixed on Thursday, as investors shrugged off US President Donald Trump's State of the Union address and looking for progress in the US-China trade dispute, ahead of crucial talks in Beijing next week. Japanese shares ended lower despite SoftBank announcing a share buyback following the company's release of strong quarterly earnings. Meanwhile, markets in Taiwan, China and Hong Kong were closed for the Lunar New Year holidays.