Post Session: Quick Review

Extending southward journey for second straight session, Indian equity benchmarks ended Monday’s trade with losses of around a percent, tracking a selloff in global market as fears lingered over a global economic slowdown. Key indices opened sharply lower and stayed in the negative terrain for whole trading session, as traders remain concerned ahead of the fiscal deficit and infrastructure output data for the month of February are slated for a release later in the week. Market participants shrugged off the Reserve Bank of India’s (RBI) report showing that India’s foreign exchange reserves surged by a whopping $3.602 billion to $405.638 billion in the week to March 15, driven by rise in foreign currency assets. Investors also ignored the Employees' Provident Fund Organisation (EPFO) data showing that net employment generation in the formal sector touched a 17-month high of 8.96 lakh in January. The addition in January was 131% higher as compared with 3.87 lakh EPFO subscribers added in the year-ago month.

Markets continued their weak run in the last leg of trade, as sentiment on the street weakened further with a private report stating that India's industrial production is expected to stay muted in the near term, owing to weak exports, rural distress, credit constraints and uncertainty over the election outcome. According to the report, the Index of Industrial Production (IIP) is likely to have grown by 3-3.2 per cent during February 2019. Investors’ sentiment was also pessimistic after Vice President of India M. Venkaiah Naidu called for a renewed focus on rural health care and cautioned that the quality of healthcare being delivered cannot be determined by the price being paid. 

On the global front, Asian markets ended lower on Monday, amid rising fears of an impending recession in the U.S. European markets were trading mostly in red, as Germany's private sector grew at its slowest pace in nearly six years, led by a sharp decline in manufacturing. The flash data from IHS Markit revealed that the composite output index fell to a 69-month low of 51.5 in March from 52.8 in February. The flash services Purchasing Managers' Index dropped to 54.9 in March from 55.3 in February, while the flash manufacturing PMI dropped more-than-expected to 44.7 in March from 47.6 In February. Back home, banking sector stocks ended lower despite report that the RBI has deferred the implementation of the new accounting norms, Ind AS, indefinitely, as necessary amendments to the relevant law are yet to be made.

The BSE Sensex ended at 37834.20, down by 330.41 points or 0.87% after trading in a range of 37667.40 and 38016.76. There were 7 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.02%, while Small cap index was down by 1.17%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.74%, PSU up by 1.15%, Power up by 0.46%, Utilities up by 0.41% and Energy up by 0.03%, while Telecom down by 2.24%, Realty down by 2.10%, Basic Materials down by 1.38%, Industrials down by 1.25% and TECK down by 1.18% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 4.82%, Coal India up by 2.80%, Power Grid up by 1.54%, NTPC up by 1.42% and Bajaj Finance up by 0.78%. (Provisional)

On the flip side, Vedanta down by 3.25%, Tata Motors down by 2.39%, Mahindra & Mahindra down by 2.13%, ICICI Bank down by 2.07% and Kotak Mahindra Bank down by 1.97% were the top losers. (Provisional)

Meanwhile, the government has surpassed its disinvestment target for the current fiscal ending March 31, 2019 (FY19) by Rs 5,000 crore. The divestment receipts have touched Rs 85,000 crore as against a target of Rs 80,000 crore for disinvestment for FY19. The Department of Investment and Public Asset Management (DIPAM) has crossed the disinvestment target for the second year in a row.

The fifth tranche of the Central Public Sector Enterprise Exchange Traded Fund (CPSE ETF) closed on March 22, clocking in Rs 9,500 crore. Also, Power Finance Corp completed the acquisition of the government’s 52.63% stake in Rural Electrification Corp for Rs 14,500 crore on the same day. This translated to Rs 24,000 crore worth of transactions realised in a day.

In the month of March, DIPAM had garnered Rs 1,000 crore from the strategic sale of Dredging Corp to a consortium of four ports and Rs 2,000 crore from the sale of enemy shares. The government has also completed two initial public offerings (IPOs) of Mazagon Docks and MSTC in March. As of February 28, the Centre had garnered Rs 56,473 crore.

In 2017-18, DIPAM had raised Rs 1 trillion compared to a budgeted target of Rs 72,500 crore. The bulk of that was realised from ONGC’s acquisition of Hindustan Petroleum. Besides, the government has fixed the disinvestment target for the next fiscal (FY20) at Rs 90,000 crore.

The CNX Nifty is currently trading at 11363.45, down by 93.45 points or 0.82% after trading in a range of 11311.60 and 11395.65. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were ONGC up by 5.09%, Indian Oil Corp. up by 5.00%, Coal India up by 3.04%, HPCL up by 2.63% and BPCL up by 1.62%. (Provisional)
On the flip side, Zee Entertainment down by 3.96%, Vedanta down by 3.25%, Bharti Infratel down by 3.24%, JSW Steel down by 2.82% and Tata Motors down by 2.37% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 decreased 6.90 points or 0.1% to 7,200.69 and France’s CAC decreased 1.23 points or 0.02% to 5,268.69, while Germany’s DAX increased 21.41 points or 0.19% to 11,385.58.

Asian markets ended lower on Monday due to heavy selling pressure as growing worries about growth and Brexit-related uncertainty weighed on investors' appetite for risk. With an inverted yield curve in the US stoking fears of a recession, investors ignored news that the Muller report did not find sufficient evidence against President Donald Trump. Chinese shares ended lower as investors looked forward to another round of US-China trade negotiations set to begin in Beijing this week. Further, Japanese shares ended down as an inverted yield curve suggested that a recession could be looming. A yield curve recession model by National Australia Bank is pointing to a 30-35 percent probability of a US recession occurring over the next 10-18 months.