Post Session: Quick Review

Indian equity benchmarks bounced back on Friday, after sliding in past two trading session. Sharp buying activity which took place during last leg of trade mainly drove the markets higher with key gauges ending just shy of 39,000 (Sensex) and 11,700 (Nifty) bastions. Benchmarks made an optimistic start and traded in fine fettle, as traders took encouragement with Finance Secretary Subhash Chandra Garg’s statement that the government is close of meeting fiscal deficit target of 3.4 per cent for 2018-19. The government in the interim Budget in February revised upward the fiscal deficit target to 3.4 per cent from 3.3 per cent of Gross Domestic Product (GDP) estimated earlier for the financial year ended March 31. Investors continued to take support with report that the Income Tax department said it added 1.07 crore new taxpayers while the number of ‘dropped filers' came down to 25.22 lakh in 2017-18, showing the positive impact of demonetisation.

However, markets trimmed some of their initial gains in early noon session, as market-men got anxious with Fitch Ratings kept India’s sovereign rating unchanged at the lowest investment grade of BBB- with a stable outlook. This is the 13th year in a row that Fitch has rated India at BBB-. But, key indices firmed up once again and hit fresh intraday high in late trade, as optimism remained among traders with Finance Minister Arun Jaitley’s statement that India’s growth has stabilised between 7-7.5 per cent and irrespective of global trends, domestic consumption is going to increase. He also said that if India can maintain its position as the fastest growing major economy in the world for the next 10 years, it could become a reasonably middle-income economy, reducing poverty to negligible levels. Local investors also took some support from Commerce and Industry Minister Suresh Prabhu’s statement that the proposed new industrial policy has been finalised and the new government very soon will announce that.

On the global front, Asian markets ended mixed on Friday as the latest round of U.S.-China trade talks ended without any meaningful conclusions. European markets were trading mostly in green. Back home, banking sector stocks were in focus with report that the RBI said it will hold further discussions with banks on linking interest rates on personal, home, auto and MSME loans with various benchmark rates, a move that would further delay issuance of final guidelines on the issue.

The BSE Sensex ended at 38951.20, up by 266.48 points or 0.69% after trading in a range of 38701.04 and 38958.60. There were 19 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.67%, while Small cap index was up by 0.74%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.18%, Basic Materials up by 1.69%, Realty up by 1.40%, IT up by 1.34% and TECK up by 1.26%, while Power down by 0.26%, Utilities down by 0.14% and FMCG down by 0.05% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 3.49%, Bajaj Finance up by 2.56%, Vedanta up by 2.46%, TCS up by 1.97% and Indusind Bank up by 1.49%.
On the flip side, Power Grid down by 1.36%, SBI down by 1.24%, Hero MotoCorp down by 0.74%, NTPC down by 0.59% and Sun Pharma down by 0.46% were the top losers. (Provisional)

Meanwhile, expressing optimism over fiscal position of the country, Finance Secretary Subhash Chandra Garg has said the government is close to meet fiscal deficit target of 3.4% for 2018-19. The government in the interim Budget in February revised upward the fiscal deficit target to 3.4% from 3.3% of Gross Domestic Product (GDP) estimated earlier for the financial year ended March 31. He said ‘some numbers are still to come. So, we will wait for a couple of days. There will always be some shortfall but sum and substance of that is what is the net impact on the deficit.’

Besides, direct tax collection was revised upward to Rs 12 lakh crore. The government had originally budgeted to collect Rs 11.50 lakh crore in 2018-19 from direct taxes, which included corporate tax and personal income tax. Likewise, in 2018-19, GST collection is pegged at Rs 6.43 lakh crore (Revised Estimate), which is lower than the targeted Rs 7.43 lakh crore (Budget Estimate). On the indirect tax front, customs collection in 2018-19 is pegged at Rs 1.30 lakh crore (RE).

Garg also said the financial sector in India has to be cognizant of the changes that are happening in the different elements of the economy. He outlined three main areas that need investment, these areas being infrastructure, digital economy and circular economy. He further said that the infrastructure sector in particular needs more investment and they need the top global government pools of sovereign and pension funds to invest in India. Digital infrastructure required non-traditional sources of finance such as private equity and venture capital funds.

The CNX Nifty ended at 11686.85, up by 88.85 points or 0.77% after trading in a range of 11609.50 and 11688.65. There were 37 stocks advancing against 13 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Steel up by 3.73%, Ultratech Cement up by 2.88%, Bajaj Finance up by 2.75%, Hindalco up by 2.61% and JSW Steel up by 2.54%. (Provisional)

On the flip side, Power Grid down by 1.56%, Britannia down by 1.48%, SBI down by 1.31%, Zee Entertainment down by 1.22% and NTPC down by 0.70% were the top losers. (Provisional)

European markets were trading mostly in green; UK’s FTSE 100 increased 5.43 points or 0.07% to 7,407.37 and France’s CAC rose 9.73 points or 0.18% to 5,473.53, while Germany’s DAX was down by 2.31 points or 0.02% to 11,985.70.

Asian markets ended mixed on Friday after US President Donald Trump touted prospects for an ‘epic’ trade deal with China, but failed to announce a date and place for a Trump/Xi summit. Chinese state media Xinhua reported quoting Vice Premier Liu He that a new consensus has been reached between the two sides on the text of a trade agreement. Investors also looked ahead to the all-important US jobs report due later in the day, with traders looking for stabilization in payrolls, following the weakest reading since 2017. Employment is expected to jump by 180,000 jobs in March after inching up by just 20,000 jobs in February. The unemployment rate is expected to hold at 3.8 percent. Japanese markets hit a one-month high, with shares of companies relying on Chinese demand leading the surge on hopes for a US-China trade deal. Investors shrugged off data showing that Japan's household spending rose less than expected in February and real wages fell unexpectedly. Meanwhile, the markets in Taiwan, China and Hong Kong were closed for the Tomb Sweeping Day holiday.