Post Session: Quick Review

After three consecutive days of robust rally, Benchmark indices ended flat with negative bias on Thursday, as investors remained cautious after data showing that Inflation based on wholesale prices rose to 2.93 percent in February over the previous month due to hardening of prices of primary articles, fuel and power. It was a firm start for the Indian indices, as traders took some encouragement with the Reserve Bank of India’s (RBI) statement that it will inject long-term liquidity worth $5 billion into the system through foreign exchange swap arrangement with banks for three years, in order to meet the durable liquidity needs of the system. Some support also came with report that the private companies in manufacturing sector posted a 24.9% growth in net profit in the October-December quarter of the current fiscal on annual basis, benefitting from lower tax provisions.

However, markets reversed their entire gains and traded flat in afternoon deals, as traders reacted negatively to Reserve Bank of India’s (RBI) report that private corporate investment plans have fallen for the seventh year in a row on account of economic slowdown, poor project appraisals and huge corporate leveraging. Traders also took a note of the chairman of RBI Committee on Digital Payments, Nandan Nilekani’s statement that India is still very far away from being a less-cash economy and security issues around digital payments system needed to be addressed to make the mode more acceptable.

On the global front, Asian markets ended mixed on Thursday, as investors reacted cautiously to mixed data from China. The country’s industrial output expanded at the slowest pace in 17 years, although retail sales and fixed asset investment grew by more than expected. European markets were trading in green, as investors monitored the latest flurry of corporate results and reacted to the latest Brexit amendment vote in the U.K. Back home, the food processing sector were in focus with report that Union Food Processing Minister Harsimrat Kaur Badal expects more than $28 billion worth of foreign direct investments (FDI) in the food processing sector in 2019. The ministry is eyeing the next edition of its flagship investment show World Food India, set to take place in November, 2019, to reach that level.
 

The BSE Sensex ended at 37742.30, down by 9.87 points or 0.03% after trading in a range of 37693.69 and 37907.78. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.33%, while Small cap index up by 0.08%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.14%, Healthcare up by 0.80%, Telecom up by 0.69%, Metal up by 0.61% and Consumer Durables up by 0.28%, while Auto down by 0.45%, IT down by 0.40%, Power down by 0.36%, Basic Materials down by 0.32% and Industrials down by 0.31% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 3.26%, Indusind Bank up by 2.62%, Sun Pharma up by 2.47%, Coal India up by 1.99% and Yes Bank up by 1.94%. (Provisional)

On the flip side, Power Grid down by 3.50%, HCL Tech. down by 2.04%, Hero MotoCorp down by 1.89%, Tata Motors - DVR down by 1.04% and ICICI Bank down by 0.97% were the top losers. (Provisional)

Meanwhile, in order to meet the durable liquidity needs of the system, the Reserve Bank of India (RBI) has decided to inject long-term liquidity worth $5 billion into the system through foreign exchange swap arrangement with banks for three years. The swap will be in the nature of a simple buy/sell foreign exchange swap from the RBI side.

Under the swap, a bank would sell US dollars to the RBI and simultaneously agree to buy the same amount of US dollars at the end of the swap period. The US Dollar amount mobilised through the auction, to be conducted on March 26, would also reflect in RBI's foreign exchange reserves for the tenor of the swap while also reflecting in RBI's forward liabilities.

The Central Bank said the market participants would be required to place their bids in terms of the premium that they are willing to pay to the RBI for the tenor of the swap, expressed in paisa terms up to two decimal places. Under the swap auction, minimum bid size would be $25 million and in multiples of $1 million thereafter.

The CNX Nifty ended at 11340.70, down by 1.00 points or 0.01% after trading in a range of 11313.75 and 11383.45. There were 28 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 3.68%, Indusind Bank up by 2.59%, Sun Pharma up by 2.19%, Bharti Airtel up by 2.15% and Yes Bank up by 2.11%. (Provisional)

On the flip side, Power Grid down by 3.65%, HCL Tech. down by 2.04%, Hero MotoCorp down by 1.91%, Ultratech Cement down by 1.49% and Tata Motors down by 1.43% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 34.31 points or 0.48% to 7,193.50, France’s CAC added 41.82 points or 0.79% to 5,348.20 and Germany’s DAX was up by 58.26 points or 0.5% to 11,630.67.

Asian markets ended mixed on Thursday after British lawmakers rejected a possible no-deal Brexit, forcing Prime Minister Theresa May to give MPs another chance to vote on delaying Brexit. Chinese data signaled further weakness in the world's second-biggest economy, but at the same time raised hopes for more policy support. Chinese shares ended lower as mixed economic readings rekindled growth worries. China's industrial output grew an annual 5.3 percent in the first two months of 2019, a government report showed. This marked the slowest pace of growth in 17 years and fell short of expectations for a score of 5.5 percent. At the same time, retail sales climbed 8.2 percent and fixed asset investment rose 6.1 percent in the same period, beating expectations. Meanwhile, Japanese shares ended largely unchanged after a slew of China data proved to be a mixed bag.