Markets bid adieu FY19 on optimistic note

Key Indian bourses ended the last trading day of the financial year 2018-19 on a firm note, with Sensex and Nifty regaining crucial psychological levels of 38,600 and 11,600, respectively. After a jubilant start, the markets seemed choppy to trade with marginal gains, affected by Crisil Research’s report stating that India Inc’s revenue growth is likely to halve in the fourth quarter due to slump in commodity prices but fall in input costs will shore up profitability of end-user industries. Crisil expects on-year corporate revenue growth for the current quarter to print at 8-9%, down sharply from the average of 16.5% in the previous three quarters. But, trade remained positive throughout the day, buoyed by Commerce Minister Suresh Prabhu’s statement that India's merchandise and services export would touch $540-billion mark this fiscal. He said exports are growing at a healthy pace and shipments of goods would reach over $330 billion. Similarly, services exports would touch about $200 billion.

In noon deals, the markets added gains, following firm cues from global markets. Domestic sentiments were positive as Finance Commission Chairman N K Singh made a case for setting up a fiscal council as an institutional mechanism to monitor fiscal consolidation roadmap of the Centre and state governments. He also said fiscal federalism is a dynamic process and 'a Work in Motion'. The street took a note of the Vice President of India, M. Venkaiah Naidu’s statement that farmers were critical for the well-being of the nation and they play a huge role in ensuring and maintaining home grown food security in India. Further, the Vice President said that collective actions were needed to correct development strategies to include preservation of nature. Meanwhile, the commerce ministry has launched a blockchain-based coffee e-marketplace to help farmers integrate with markets so that they can realize fair prices for the commodity. The blockchain will reduce the number of layers between coffee growers and buyers and help farmers double their income.

On the global front, European markets were trading in green, as Eurozone's M3 money supply annual growth improved in February after slowing in the previous month. The figures from the European Central Bank showed that M3, a measure of broad money supply, grew 4.3 percent year-on-year in February following a 3.8 percent increase in January. In December, M3 rose 4.1 percent. Asian markets ended mostly higher, as investors digested a mixed bag of Japanese data. Retail sales dipped slightly in February from the previous month, while industrial output grew for the first time in four months and the jobless rate hit a nine-month low. Investors remained optimistic about the latest round of US-China trade talks.

Back home, banking stocks ended lower, even though credit rating agency Fitch Ratings in its latest report stated that non-performing loan (NPL) ratio of Indian banking sector improved during the first nine months of the current financial year, on the back of lower fresh slippages and better recoveries. As per the report, banking sector's NPL ratio decreased to 10.8% in 9MFY19 from 11.5% at fiscal year-end 2018. However, auto stocks gained, despite CRISIL’s report that the impact of muted demand is going to hit the revenue of final quarter (Q4) of the automobile industry hardest in the financial year 2019-2020. It is expected to be slowest in the last three fiscals to a marginal 1.8 percent. During the same quarter, industry saw a revenue growth of 7.3 per cent and 27 per cent in FY'17 and FY'18 respectively.

Finally, the BSE Sensex rose 127.19 points or 0.33% to 38,672.91, while the CNX Nifty was up by 53.90 points or 0.47% to 11,623.90.

The BSE Sensex touched a high and a low of 38,748.54 and 38,546.68, respectively and there were 19 stocks advancing against 12 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.99%, while Small cap index was up by 0.73%.

The top gaining sectoral indices on the BSE were Metal up by 2.33%, Basic Materials up by 2.10%, Healthcare up by 1.37%, Auto up by 1.22% and PSU up by 0.89%, while FMCG down by 0.14%, Bankex down by 0.04% and Utilities down by 0.04% were the few losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 3.20%, Tata Steel up by 2.73%, Mahindra & Mahindra up by 2.27%, Tata Motors up by 2.17% and ONGC up by 1.66%. On the flip side, Indusind Bank down by 2.08%, ITC down by 1.10%, Bajaj Auto down by 0.89%, Axis Bank down by 0.79% and NTPC down by 0.37% were the top losers.

Meanwhile, the Central Board of Direct Taxes (CBDT) has rung alarm bells and asked the Income Tax Department to go for a major assault as the direct tax collection target remains short of about 15 percent, as just few days left for the end of the financial year, i.e., March 31. As per to the internal estimate of the department, against the budget collection target of Rs 12,00,000 crore, only 85.1 percent of the target at Rs 10,21,251 crore has been collected as on March 23.

CBDT Member Neena Kumar has underlined the areas that are sluggish vis-a-vis direct tax collections obtained from personal, corporate and advance tax categories.  She also said that the minor head-wise analysis indicates worsening trend of negative growth in regular collections at (-) 6.9 percent as against (-) 5.2 percent in the last week. She also noted that this is an alarming situation which needs immediate attention.

Kumar further said “the CBDT has discussed strategies through various communications with you (senior officials) and it was expected that by this time your strategies would have succeeded resulting into improved collections. However, the figures of collection give a different account.” She also asked the department to take all possible actions urgently, especially with respect to recovery of arrear and current demand, so as to achieve the targets for collection.

The CNX Nifty traded in a range of 11,630.35 and 11,570.15. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 6.11%, Vedanta up by 3.79%, Grasim Industries up by 3.60%, UPL up by 3.12% and BPCL up by 3.10%. On the flip side, GAIL India down by 2.32%, Indusind Bank down by 2.20%, Eicher Motors down by 1.83%, Bajaj Auto down by 1.76% and Bharti Infratel down by 1.42% were the top losers.

European markets were trading in green; UK’s FTSE 100 gained 41.77 points or 0.58% to 7,276.10, France’s CAC soared 34.93 points or 0.66% to 5,331.47 and Germany’s DAX was up by 48.43 points or 0.42% to 11,476.59.

Asian markets ended mostly in green on Friday as investors remained hopeful that the US and China would ultimately reach a deal to end their protracted trade war. A rise in benchmark US bond yields also helped revive investors' appetite for riskier assets. Chinese shares led regional gains as the US delegation led by trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin arrived in Beijing on Thursday for the latest round of talks. Chinese Vice Premier Liu He is expected to travel to Washington next week, but any final deal to end the trade war is expected to be agreed only at a proposed summit between President Xi Jinping and US counterpart Donald Trump. Further, Japanese shares ended higher as investors reacted to a mixed bag of local economic data. Retail sales dipped slightly in February from the previous month, while industrial output grew for the first time in four months and the jobless rate hit nine-month low, separate reports showed.