Post Session: Quick Review

Indian equity benchmarks traded on an optimistic note throughout the day on Tuesday and Hectic buying activity in last hour of trade largely pushed the markets to close at day’s high. Markets snapped two sessions’ losing streak, with Sensex settling above crucial 38,250 mark, while Nifty ending just shy of 11,500 mark. Indices made a positive start, as local investors cheered with the finance ministry’s statement that the liquidity situation in the economy was comfortable, and it will improve further with the central bank’s move to infuse Rs 35,000 crore through the rupee-dollar swap arrangement, announced last week. Some support also came in with a report stating that India's share in the final consumption of consumer goods is expected to double by 2030 and the favourable demographics will soon take it ahead of China in regional market dynamics.

Though, indices gave up most of their gains in the afternoon session, as anxiety remained among the local traders with state-run India Meteorological Department’s (IMD) statement that its study of global models shows that there is little chance of a strong El Nino in 2019. A strong El Nino could have an adverse impact on India’s southwest monsoon that starts from June as almost 80 per cent of El Nino years have seen below normal rains. Some concern also came in with Employees State Insurance Corporation (ESIC) report that job creation fell by 6.91% in January to 11.23 lakh compared to 12.06 lakh in the same month last year.

However, key indices witnessed a sudden jump in last leg of trade, taking support from the Vice President of India, M. Venkaiah Naidu called for a renewed focus on agribusiness, value addition and diversification of agriculture to make farming much more sustainable, profitable and rewarding. The mood remained upbeat on strengthening of rupee against the dollar along with a recovery in the Asian markets. Meanwhile, the commerce ministry has introduced an online system for exporters to obtain export licence for restricted category goods, a move aimed at promoting paperless work and ease of doing business. 

On the global front, Asian markets ended mostly higher on Tuesday, while European markets were trading in green, as fears over a possible recession faded and investors concentrated on corporate news. Back home, telecom sector stocks were in focus with ICRA’s report stating that the Reliance Jio-induced pains for the telecom sector will continue with the industry slated to report decline in revenue for the third consecutive year. However, it said there is room for a minor recovery in the upcoming fiscal year 2019-20.

The BSE Sensex ended at 38255.58, up by 446.67 points or 1.18% after trading in a range of 37800.08 and 38273.90. There were 24 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 1.11%, while Small cap index was up by 0.65%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 2.37%, Energy up by 2.09%, Power up by 1.80%, Utilities up by 1.74% and PSU up by 1.35%, while IT down by 0.65%, TECK down by 0.45% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 3.74%, Vedanta up by 3.45%, NTPC up by 3.28%, Reliance Industries up by 3.20% and Yes Bank up by 3.08%. (Provisional)

On the flip side, Infosys down by 1.28%, ITC down by 0.46%, Bajaj Auto down by 0.42%, Larsen & Toubro down by 0.36% and TCS down by 0.34% were the top losers. (Provisional)

Meanwhile, welcoming the Central Bank’s rupee-dollar swap auction, the Finance Ministry has said that liquidity situation of the economy is comfortable and it will be boosted further by Rs 35,000 crore through the rupee-dollar swap window.

Department of Economic Affairs Secretary Subhash Chandra Garg has said that liquidity situation is comfortable now. He said the Reserve Bank of India’s (RBI) swap arrangement is a ‘sound move’. In order to meet the durable liquidity needs of the system, the 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 this swap, the central bank wants to buy dollars (around $5 billion, or Rs 35,000 crore) from banks and return these dollars at the end of three years (in 2022) for a ‘forward’ premium. This premium would be fixed through an auction on March 26. This typically means the RBI will be buying dollars from banks and selling ‘forward dollars’ for a premium.

The CNX Nifty ended at 11492.10, up by 137.85 points or 1.21% after trading in a range of 11352.45 and 11495.60. There were 39 stocks advancing against 11 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 4.43%, SBI up by 3.55%, Vedanta up by 3.48%, Reliance Industries up by 3.23% and Bajaj Finance up by 3.11%. (Provisional)

On the flip side, Tech Mahindra down by 2.61%, Indian Oil Corp. down by 1.64%, Infosys down by 1.15%, UPL down by 1.07% and Coal India down by 0.97% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 31.54 points or 0.44% to 7,209.12, France’s CAC rose 21.90 points or 0.42% to 5,282.54 and Germany’s DAX was up by 1.33 points or 0.01% to 11,347.98.

Asian markets ended mostly higher on Tuesday after the previous day's steep losses fuelled by concerns about the global economic growth and a possible recession in the US. Investors kept a close eye on Brexit developments after UK MPs temporarily sized control of the Brexit process from the British Prime Minister Theresa May, in a move that gives them control of Parliament's agenda on Wednesday. Japanese markets recovered from steep losses in the previous session as a weaker yen boosted shares of exporters. Though, Chinese shares extended their losses as investors remained concerned with a possible recession in the US and the next round of China-US trade talks.