Post Session: Quick Review

Indian equity benchmarks erased major chunk of gains in dying hour of trade to come off their intraday high points, but managed to close the session in green terrain, on the back of strong trend seen in other Asian markets. Domestic stocks started the first day of the fiscal year 2019-20 with decent gains, on expectations that the RBI may cut key lending rates by another 25 basis points on April 04, to boost economic activities amid fears of global slowdown impacting domestic growth prospects. Traders took some encouragement with the RBI’s data showing that India's foreign exchange reserves continued to surge for the third week in a row, adding $1.029 billion at $406.667 billion in the week to March 22. Traders remained energized with Chief Economic Advisor Krishnamurthy Subramanian’s statement that inflation has remained well under control during the Modi government’s tenure, providing relief to the middle class and the poor. Low prices, strong monetary policy framework by the Reserve Bank of India (RBI) and economic reforms have boosted the domestic consumption in the country.

Indices extended their gains to reach at fresh intraday high points in late afternoon session, taking support after the goods and services tax (GST) collections scaled record high of Rs 1.06 lakh crore in March, up from Rs 97,247 crore in the previous month, as compliance improved amid increased number of returns filed. Total number of summary sales return GSTR-3B filed for the month of February up to March 31, stood at 75.95 lakh. The collection in March 2019, has been highest since introduction of GST and also reflects a 15.6% growth over March 2018, collection of Rs 92,167 crore.

However, markets pared much of day’s gains after hitting new high at close, as profit-taking emerged at higher levels. Anxiety remained among the local traders with Controller General of Accounts (CGA) data stating that the country's fiscal deficit touched 134.2 per cent of the full-year revised budgeted estimate at the end of February 2019, mainly due to tepid growth in revenue collections. In absolute term, fiscal deficit for April-February 2018-19 was Rs 8.51 lakh crore as against the revised estimate (RE) of Rs 6.34 lakh crore for the entire year. Some cautiousness also came with the RBI’s data that the country's current account deficit widened to 2.5 per cent of GDP in third quarter of Financial year 2019 from 2.1 per cent a year ago, primarily on account of a higher trade deficit. In absolute terms, the CAD, or the gap between inflow and outflow of foreign exchange in the current account, was $16.9 billion in the October-December 2018 period, up from $13.7 billion in the year-ago period.

On the global front, Asian markets ended mostly in green on Monday, after encouraging economic reports from China. China’s official purchasing managers index showed that the country’s manufacturing sector rebounded strongly in March, to a six-month high of 50.5, from 49.2 in February. Later, the private Caixin China manufacturing purchasing managers index rose to 50.8 in March from 49.9 in February, expanding for the first time in four months. The readings helped ease worries that the world’s second-largest economy was significantly slowing down. European markets were trading in green, as UK manufacturing sector grew at the fastest pace in over a year in March, as stockpiling by businesses hit a record as they braced for Brexit disruptions. The survey data from IHS Markit showed that the CIPS purchasing managers' index, or PMI, for the manufacturing sector climbed to a 13-month high of 55.1 from 52.1 in February.

The BSE Sensex ended at 38819.59, up by 146.68 points or 0.38% after trading in a range of 38808.74 and 39115.57. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.36%, while Small cap index was up by 0.70%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.85%, IT up by 1.47%, Industrials up by 1.42%, Capital Goods up by 1.31% and TECK up by 1.28%, while Consumer Durables down by 0.84%, Realty down by 0.64%, Bankex down by 0.45%, Oil & Gas down by 0.27% and Power down by 0.20% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors - DVR up by 7.58%, Tata Motors up by 7.49%, Bharti Airtel up by 2.75%, Vedanta up by 2.48% and Maruti Suzuki up by 2.45%. (Provisional)

On the flip side, Indusind Bank down by 2.21%, Axis Bank down by 1.83%, Mahindra & Mahindra down by 1.60%, ONGC down by 1.54% and Power Grid down by 1.39% were the top losers. (Provisional)

Meanwhile, spreading more worries over fiscal stance, credit rating agency, India Ratings and Research (Ind-Ra) has said that declining household savings may lead to wider current account deficit (CAD) and rise in the interest rates.

According to the report, gross households’ financial savings net of financial liabilities surged at an annualised rate of 9.8% to Rs 11.29 lakh crore in FY18 from Rs 6.43 lakh crore in FY12, while net central government, state government and EBR borrowings increased at an annual growth of 10.7% to Rs 11.55 lakh crore in FY18 from Rs 6.28 lakh crore in FY12. Besides, during the same period, states' net borrowing grew at an annualised rate of 33% followed by extra-budgetary resources growing at 15.1% and that of the Centre at 0.5%.

The credit rating agency further noted that the ratio of gross household financial savings net of financial liabilities compared with net borrowings of the Centre and the states and their extra-budgetary resources slipped to 0.97x in FY18 from 1.02x in FY12 and 1.38x in FY16.

The CNX Nifty ended at 11655.60, up by 31.70 points or 0.27% after trading in a range of 11644.75 and 11738.10. There were 27 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 7.49%, Hindalco up by 5.28%, Bharti Airtel up by 2.97%, Wipro up by 2.71% and Maruti Suzuki up by 2.51%. (Provisional)

On the flip side, Zee Entertainment down by 3.37%, UPL down by 2.80%, Indian Oil Corp. down by 2.61%, Eicher Motors down by 2.59% and Indusind Bank down by 2.23% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 46.55 points or 0.64% to 7,325.74, France’s CAC increased 36.53 points or 0.68% to 5,387.06 and Germany’s DAX increased 142.79 points or 1.24% to 11,668.83.

Asian markets ended mostly in green on Monday as investors cheered signs of progress in high-level trade talks and positive manufacturing data from China. Beijing announced that it would continue to suspend additional tariffs on US vehicles and auto parts after April 1 as a gesture after Washington delayed tariff hikes on Chinese imports. A delegation led by Vice Premier Liu He will be in Washington this week for another round of talks. Chinese shares ended to its highest level since May 2018, as investors cheered signs of progress in trade talks and signals of an economic recovery. Underlying sentiment was boosted after official data showed China's factory activity in March unexpectedly grew for the first time in fourth months. The Caixin/ Markit PMI also showed the manufacturing sector in the world's second biggest economy returning to growth. Meanwhile, Japanese shares ended off their day's highs after a central bank survey showed Japan's business confidence hit a two-year low in the March quarter, underscoring renewed concerns surrounding global demand. Another private survey showed that manufacturing activity in the country contracted for a second straight month in March, with output down at the sharpest rate in nearly three years.