Late flourish helps markets to end higher

Late hour flourish helped the equity markets to end the last trading day of the week on higher note, with Sensex and Nifty reclaiming their crucial psychological levels of 38,800 and 11,650, respectively. Markets made a positive start of the day, aided by Finance Secretary Subhash Chandra Garg’s statement 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. Some optimism also came after the Central Board of Direct Taxes (CBDT) said that it added 1.07 crore new taxpayers in financial year 2018 (FY18) as compared to 86.16 lakh new ITR filers added during financial year 2017 (FY17), showing the positive impact of demonetization. CBDT stated that demonetization had a phenomenal positive impact on the widening of tax base and direct tax collections.

Key indices added gains in last leg of the trade, tracking firm European markets. Trading sentiments got boost as Finance Minister Arun Jaitley said that India’s growth has stabilised between 7-7.5% 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. Adding some comfort among investors, Commerce and Industry Minister Suresh Prabhu said that the proposed new industrial policy has been finalised and the new government very soon will announce that.  The market participants paid no heed towards reports showing that 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-.

On the global front, European markets were trading mostly in green, as Germany's industrial production rose in February after stagnating at the start of the year. The preliminary figures from the Federal Statistical Office showed that industrial production grew a price, seasonally and calendar adjusted 0.7 percent. January's originally reported decline of 0.8 percent was revised to zero percent. Asian markets ended in green, after US President Donald Trump said the US and China are making progress in trade talks and something very monumental could be announced in next four weeks.

Back home, banking sector stocks remained in focus, amid reports 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. Agriculture related stocks remained in limelight with a report stating that India has issued a combined 650,000 tonne import quota for pulses for the fiscal year to March 2020, allowing overseas purchases of protein-rich pulse varieties that are a staple of Indian cuisine.

Finally, the BSE Sensex gained 177.51 points or 0.46% to 38,862.23, while the CNX Nifty was up by 67.95 points or 0.59% to 11,665.95.

The BSE Sensex touched a high and a low of 38,958.60 and 38,701.04, respectively and there were 16 stocks advancing against 14 stocks declining, while 1 stock remained unchanged on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.63%, while Small cap index was up by 0.72%.

The top gaining sectoral indices on the BSE were Metal up by 2.03%, Basic Materials up by 1.56%, Realty up by 1.35%, IT up by 1.14% and TECK up by 1.05%, while Power down by 0.35%, Utilities down by 0.19%, FMCG down by 0.13% and PSU down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.36%, Vedanta up by 2.38%, Bajaj Finance up by 2.20%, TCS up by 1.84% and Indusind Bank up by 1.68%. On the flip side, SBI down by 1.46%, Power Grid down by 1.36%, Hero MotoCorp down by 0.78%, NTPC down by 0.70% and Sun Pharma down by 0.67% were the top losers.

Meanwhile, Commerce and Industry Minister Suresh Prabhu stated that the proposed new industrial policy has been finalised and the new government very soon will announce that. However, he said that his ministry has sent the final proposal of the policy to the Cabinet for approval, but it was not taken up for consideration.

The new industrial policy aims at boosting manufacturing sector growth, promote foreign technology transfer and attract overseas investments. It also aims at promoting emerging sectors and modernising existing industries. That apart, it will look to reduce regulatory hurdles, cut paper work and support emerging and new sectors. The ministry would be setting up an elaborate machinery including a steering committee for effective implementation of the policy. This will be the third industrial policy after the ones released in 1956 and 1991. It will replace the industrial policy of 1991 which was prepared in the backdrop of the balance of payment crisis.

Talking about increasing foreign direct investment (FDI) into India, Prabhu emphasized on the need to have a proper strategy to attract overseas inflows in greenfield as well as brownfield projects. He said 'We are trying to bring in more FDI. FDI will come either in greenfield area or it could be through acquisition. So, we must prepare a strategy on both... We should target those companies that can invest because they have investable surplus and same time, we must have a matching sectoral strategy wherein inbound investments can be absorbed.”

The CNX Nifty traded in a range of 11,689.65 and 11,609.50. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.74%, Ultratech Cement up by 3.04%, Bajaj Finance up by 2.75%, Hindalco up by 2.73% and Vedanta up by 2.62%. On the flip side, Power Grid down by 1.50%, Britannia down by 1.44%, Zee Entertainment down by 1.33%, SBI down by 1.27% and Dr. Reddy’s down by 0.66% were the top losers.

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.