Post Session: Quick Review

Extending southward journey for second straight session, Indian equity benchmarks ended Thursday’s trade on pessimistic note, even as Reserve Bank of India (RBI) slashed repo rate by 25 bps to 6 percent as expected and kept the stance unchanged to Neutral. Key bourses made cautious start and traded flat as traders reacted negatively to a private report that Indian businesses are getting squeezed. As economic growth slows and inflation sinks they have little ability to raise prices without losing sales, and yet they are getting almost no relief from borrowing costs with lending rates remaining high. Markets added losses with another private report stated that India’s June-September monsoon, which delivers more than 70% of the country’s annual rainfall, is likely to be below normal this year as the El Nino weather pattern may impact rain.

Markets continued their weak run in the last leg of trade, and traded at day’s low points, as sentiments on the street weakened further with data showing that the country's services sector activity eased in March with slowest pace of output growth in six-months due to a slower expansion in new work, leading to weakest rate of hiring since last September. The seasonally adjusted Nikkei India Services Business Activity Index fell to 52 in March from 52.5 in February, indicating the slowest expansion since last September. Traders also got cautious after Reserve Bank Governor Shaktikanta Das said that even though the headline credit demand is growing at a healthy 14 percent, it is not broadbased while those to MSMEs have been muted so far. Das further said the RBI will continue to watch macroeconomic factors and will act timely on the same.

However, the markets managed to recover from day’s low points in last minutes of trade as traders found some solace with Commerce and Industry Minister Suresh Prabhu’s statement that India's exports are expected to reach $32.38 billion in March, the highest in any month so far, on account of healthy growth in sectors such as pharmaceuticals. He said that exports would cross $331 billion mark in the 2018-19 fiscal year. Some support also came with Vice President M Venkaiah Naidu’s statement India would continue to grow at a higher economic growth rate until 2021, while citing the World Bank estimates. World Bank estimates suggest that India would continue to grow at a high rate until 2021. 

On the global front, Asian markets ended mostly in green on Thursday after recent string of gains on optimism that the US and China are closer to a trade deal that would put an end to their ongoing trade war. European markets were trading mostly in red, as Germany's manufacturing orders decreased sharply in February, defying expectations for a modest increase. The preliminary figures from the Federal Statistical Office showed that factory orders dropped 4.2 percent month-on-month. January's decline was revised to 2.1 percent from 2.6 percent.

The BSE Sensex ended at 38703.59, down by 173.53 points or 0.45% after trading in a range of 38581.04 and 38939.35. There were 15 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.13%, while Small cap index was down by 0.28%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 0.71%, Auto up by 0.53%, Consumer Disc up by 0.32%, Realty up by 0.30% and Telecom up by 0.18%, while IT down by 1.55%, TECK down by 1.21%, Energy down by 1.15%, Oil & Gas down by 0.97% and Capital Goods down by 0.72% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 2.31%, Hero MotoCorp up by 2.03%, Bharti Airtel up by 1.71%, HDFC up by 1.40% and Asian Paints up by 1.37%. (Provisional)

On the flip side, TCS down by 3.19%, Yes Bank down by 1.92%, Indusind Bank down by 1.57%, Reliance Industries down by 1.46% and HCL Tech. down by 1.41% were the top losers. (Provisional)

Meanwhile, expressing hopes over growth of India’s exports, Commerce and Industry Minister Suresh Prabhu has said that the country’s exports are expected to reach $32.38 billion in March, the highest in any month so far, on account of healthy growth in sectors such as pharmaceuticals. He added that exports would cross $331 billion mark in the 2018-19 fiscal year.

He further said that for the first time, India has crossed $19 billion figure in pharma exports this fiscal. He said that the country's exports were declining for long time but now this year, they would have record exports. The figures in 2018-19 would be the highest ever at a time when there is a worst scenario in the world trade front.
The minister said that the outbound shipments are growing because of concerted efforts by the ministry in the last one year. He said ‘We created a matrix between every product and every geography. Secondly, we had done series of road shows’.  He noted that export potential was tapped in regions such as Africa and Latin America. He also held several meetings with then line ministries including food, agri, pharma and IT ministry to resolve issues hindering exports.

Prabhu said that India is recording a healthy growth in exports despite the fact that countries are putting barriers and following protectionist measures. Imposition of high customs duties by the US on certain steel and aluminium products triggered a trade war kind of situation. India's exports grew by 8.85% to $298.47 billion during April-February 2018-19. Since 2011-12, India's exports have been hovering at around $300 billion. During 2017-18, the overseas shipments grew by about 10% to $303 billion.

The CNX Nifty ended at 11603.85, down by 40.10 points or 0.34% after trading in a range of 11559.20 and 11662.55. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 3.28%, Indiabulls Housing Finance up by 3.26%, Ultratech Cement up by 2.46%, Tata Motors up by 2.38% and Britannia Industries up by 2.00%. (Provisional)

On the flip side, TCS down by 2.95%, HCL Tech. down by 2.70%, BPCL down by 2.56%, Hindalco down by 2.52% and Yes Bank down by 1.97% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 decreased 38.85 points or 0.52% to 7,379.43 and France’s CAC fell 14.18 points or 0.26% to 5,454.73, while Germany’s DAX increased 2.18 points or 0.02% to 11,956.58.

Asian markets ended mostly in green on Thursday after recent string of gains on optimism that the US and China are closer to a trade deal that would put an end to their ongoing trade war. Chinese shares ended higher as investors looked ahead to a meeting between US President Donald Trump and Chinese Vice Premier Liu He in Washington later today. Reports showed that Beijing will cut government- related fees and service charges to reduce costs for companies and individuals from July 1. Further, Japanese shares ended marginally higher, led by carmakers and cyclical shares. Though, the upside remained capped as services and private payrolls data added to recent worries about slowing growth. Meanwhile, Taiwan’s stock market closed on Thursday for the Children’s Day holiday.