Markets end lackluster trade on flat note

The last trading day of the week turned out to be a choppy session for key Indian equity benchmarks, with the both the larger peers, Sensex and Nifty, closing the trading session on flat note. The equity markets made a negative start of the day, with Moody’s statement that the fresh round recapitalisation of 12 state-run banks is positive as it will help them improve their core capital but a complete turnaround is still away due to the large quantum of legacy bad loans. It said these banks are far from a complete turnaround as large volumes of problem-loans will still continue to cap improvements in profitability and capitalisation, constraining their credit profiles. Domestic sentiments remained subdued after the release of the minutes of Reserve Bank of India (RBI) last policy meet, in which governor Shaktikanta Das argued the need to look at growth concerns.

However, further fall in markets remained capped, amid Niti Aayog’s note stating that the host of reforms undertaken by the government has transformed India into the fastest-growing major economy along with the macroeconomic stability not witnessed in the past. The street got some relief with the CriSidEx survey stating that micro and small enterprises (MSEs) are becoming more optimistic about their business prospects. The CriSidEx index rose to 128 in Q3FY19, the highest score since its inception. In comparison, the index was at 107 in Q3FY18. Adding some support, Commerce and Industry Minister Suresh Prabhu said that India and Russia are working to address and resolve trade and investment issues to facilitate and increase private sector cooperation between the countries. Meanwhile, Retirement fund body Employees' Provident Fund Organisation (EPFO) has announced an increase in interest rate to 8.65 percent from 8.55 percent on PF deposits for 2018-19, to its 6 crore subscribers.

On the global front, European markets were trading in green, as Eurozone's private sector expanded at the fastest pace in three months in February, led by stronger growth in services, while manufacturing contracted. The preliminary survey data from IHS Markit showed that the flash Composite Purchasing Managers' Index rose to 51.4 from 51 in January. Adding more optimism, Eurozone's inflation eased for a third straight month in January to its lowest level in nine months, thanks to slower increase in energy prices, while core inflation accelerated at a faster than estimated pace. The latest data from Eurostat confirmed that the consumer price index rose 1.4 percent year-on-year in January, in line with the flash estimate released on February 1. Asian markets ended mixed, as investors continued to closely watch high-level talks between US and Chinese trade negotiators in Washington, as the two sides face a March 1 deadline to avoid a further escalation in tariffs.

Back home, automobile stocks ended higher, despite India Ratings and Research’s (Ind-Ra) report that the automobile sales are expected to remain tepid in the first half of 2019-20. However, the agency is hopeful about growth in demand during the second half of the year, on the back of the upcoming implementation of BS-VI emission norms. Further, railway industry shares remained in focus, after the Vice President of India, M. Venkaiah Naidu initiated a series of railway projects including the inauguration of the much-awaited new railway line between Venkatachalem -Vellikallu and Obulavaripalle - Cherlopalli (part of Krishnapatnam - Obulavaraipalle rail line project) and laid the foundation stones for redevelopment of Nellore railway station and passenger amenities at all railway stations from Krishnapatnam to Rapuru station.

Finally, the BSE Sensex fell 26.87 points or 0.07% to 35,871.48, while the CNX Nifty was up by 1.80 points or 0.02% to 10,791.65.

The BSE Sensex touched a high and a low of 35,941.69 and 35,795.79, respectively and there were 22 stocks advancing against 08 stocks declining, while 1 stock remain unchanged on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.38%, while Small cap index was up by 0.77%.

The top gaining sectoral indices on the BSE were Metal up by 1.62%, Auto up by 1.55%, Realty up by 1.38%, Power up by 1.17% and PSU up by 1.12%, while Bankex down by 0.43%, Consumer Durables down by 0.18% and Energy down by 0.17% were the few losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.23%, Tata Motors up by 2.86%, Vedanta up by 2.86%, NTPC up by 2.27% and Mahindra & Mahindra up by 2.01%. On the flip side, Kotak Mahindra Bank down by 3.71%, Reliance Industries down by 1.11%, HDFC Bank down by 1.11%, Indusind Bank down by 0.56% and Bajaj Finance down by 0.45% were the top losers.

Meanwhile, the government has re-promulgated an ordinance to amend the companies law that seeks to plug critical gaps in corporate governance, ensure better compliance levels as well as further improve the ease of doing business. Recently, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the Promulgation of the Companies (Second Amendment) Ordinance 2019.

A bill to replace the Companies (Amendment) Ordinance, 2018, that was promulgated in November could not be passed during the last session of the current Parliament. The amendments have been brought in to address the need to impose civil liability for technical & procedural defaults of a minor nature & to plug gaps in the corporate governance & enforcement framework covering a wide range of issues.

As many as 16 minor offences have been re-categorised as ‘purely civil defaults’ which would help de-clog special courts. Besides, certain routine functions from the National Company Law Tribunal (NCLT) would be transferred to the central government. These include dealing with applications for change of financial year and conversion from public to private companies.

The CNX Nifty traded in a range of 10,801.55 and 10,758.40. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 5.19%, HPCL up by 3.83%, JSW Steel up by 3.23%, BPCL up by 3.18% and Vedanta up by 3.07%. On the flip side, Kotak Mahindra Bank down by 3.95%, GAIL India down by 1.57%, Reliance Industries down by 1.22%, HDFC Bank down by 1.18% and Bajaj Finance down by 0.84% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 14.72 points or 0.21% to 7,182.11, France’s CAC soared 13.87 points or 0.27% to 5,209.98 and Germany’s DAX was up by 22.77 points or 0.2% to 11,446.05.

Asian markets ended mixed on Friday as hopes for Chinese stimulus helped offset weak economic readings from the US and Europe. Investors continued to closely watch high-level talks between US and Chinese trade negotiators in Washington, as the two sides face a March 1 deadline to avoid a further escalation in tariffs. Japanese shares fell to snap a four-day winning streak as investors digested a set of weak US data. Japanese inflation picked up in January, but remained far below the Bank of Japan's target, a government report showed. Meanwhile, Chinese shares ended sharply higher after data showed growth in China's new home prices fell to a nine-month low in January, boosting stimulus hopes. Reports indicated that Chinese authorities could be getting ready to implement more extensive stimulus measures in a bid to encourage economic growth.