Post Session: Quick Review

Indian equity benchmarks gave up most of their losses in last leg of trade to come off their intraday low points, but failed to erase all losses and ended with minor cut, tracking weakness in other Asian markets. It was a negative start to the markets, as traders remained pessimistic with the economic research wing of SBI stating that it is erroneous to come to a conclusion of heightened economic activity using the jump in currency in circulation (CIC). It estimated that cash in the economy at Rs 20.4 lakh crore, stressing the rural economy continues to be depressed. It pointed out to data from leading indicators, including passenger car sales, commercial vehicle sales and two wheeler sales, among others, which shows a dip in activity, to point out that the higher CIC does not suggest a jump in economic activity. Indices hit fresh intraday low in afternoon trade despite report stating that the government has set up an inter-ministerial committee headed by the finance minister to decide on exceptions and further inclusions of left-out farmers who fail to meet the existing eligibility criteria of the PM KISAN scheme. Moreover, weakness in the rupee also dampened the trading sentiment.

However, local stocks staged a strong recovery in late trade, tracking positive opening in European stocks. Traders found some support with Chief Economic Adviser K V Subramanian’s statement that the economic growth is expected to accelerate to 7.5% in next financial year (FY20), from 7.2% projected for the current financial year (FY19). He further stated in the last four years the GDP growth rate has been 7.3% that was highest across all government since liberalisation. Traders also took a note of a private report which stated that India and US pledged to further boost bilateral trade and investments, as key policymakers and industrialists of both the sides huddled for a commercial dialogue and CEO forum meeting.

On the global front, Asian markets ended in red on Friday, retreating from four-month highs after data out of China raised concerns over deflationary pressures building in the world’s second biggest economy. European markets were trading mostly in green. Back home, real estate sector stocks were in focus with Finance Minister Piyush Goyal’s statement that the government is considering giving relief to the real estate sector and the next GST Council meeting could take some steps to address their issues even as he asked the banks to meet the realty sector on stalled projects in two weeks.

The BSE Sensex ended at 35849.73, down by 26.49 points or 0.07% after trading in a range of 35510.97 and 36022.57. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index dropped 1.13%, while Small cap index was down by 0.71%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 2.71%, Power up by 2.24%, Oil & Gas up by 1.52%, Energy up by 1.34% and Telecom up by 1.23%, while Metal down by 2.32%, Healthcare down by 2.18%, Basic Materials down by 1.53%, Auto down by 1.15% and Consumer Discretionary Goods & Services down by 0.80% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 3.98%, Power Grid up by 3.77%, ONGC up by 2.42%, Bharti Airtel up by 1.51% and Coal India up by 1.41%. (Provisional)

On the flip side, Sun Pharma down by 3.84%, Tata Steel down by 3.07%, Vedanta down by 2.83%, Hero MotoCorp down by 2.45% and Bajaj Finance down by 1.85% were the top losers. (Provisional)

Meanwhile, Chief Economic Adviser K V Subramanian has said that the economic growth is expected to accelerate to 7.5% in next financial year (FY20), from 7.2% projected for the current financial year (FY19). He mentioned ‘We have done the projections. All the external agencies and internally our estimates are also 7.5% (2019-20). The nominal rate we are expecting is 11.5% and inflation of about 4%.’

He further stated in the last four years the GDP growth rate has been 7.3% that was highest across all government since liberalisation. This growth rate has been achieved amidst very low inflation. He also added that the significant reduction in inflation came on account of setting up of Monetary Policy framework that mandates the RBI to keep it within a particular band. Prior to 2014, the average inflation was in excess of 10%. Monetary Policy Committee, the interest rate setting body, has been given objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2 per cent, while supporting growth.

Besides, on fiscal deficit, he said the deficit has been secularly coming down and India is on the glide path to achieving the target set under the Fiscal Responsibility and Budget Management (FRBM) Act. The Budget pegs fiscal deficit to be at 3.4% of the GDP for FY20.

The CNX Nifty ended at 10732.05, down by 14.00 points or 0.13% after trading in a range of 10620.40 and 10785.75. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 3.88%, NTPC up by 3.85%, Power Grid up by 3.66%, Bharti Infratel up by 3.30% and GAIL India up by 3.13%. (Provisional)

On the flip side, JSW Steel down by 4.93%, Sun Pharma down by 4.12%, Tata Steel down by 3.17%, Dr. Reddys Lab down by 3.12% and Vedanta down by 2.93% were the top losers. (Provisional)

European markets were trading mostly in green; UK’s FTSE 100 increased 15.74 points or 0.22% to 7,212.75 and France’s CAC was up by 34.91 points or 0.69% to 5,097.43, while Germany’s DAX decreased 8.30 points or 0.07% to 11,081.49.

Asian markets ended in red on Friday in wake of mounted selling pressure following weak data from the US and China rekindled investor worries about a slowdown in the global economy. US President Donald Trump's insistence that border security justifies a state of emergency and skepticism over the latest round of US-China trade talks also kept investors nervous. Chinese shares ended lower after latest data raised deflation fears. Consumer prices in China were up 1.7 percent year on year in January, the National. That was shy of expectations for an increase of 1.9 percent, which would have been unchanged from the December reading. Factory inflation slowed for the seventh straight month on cooling demand. Producer prices were up 0.1 percent on year, shy of expectations for an increase of 0.5 percent and down from 0.9 percent in the previous month. Further, Japanese shares ended sharply down as a firm yen pulled down exporters, and falling US yields on the back of weak US data weighed on the financial sector.