Last hour buying lifts equity indices higher

Last hour buying lifted Indian equity indices higher on Tuesday, with Sensex and Nifty closing above their crucial psychological levels of 38,900 and 11,650, respectively. After a cautious start, the markets remained volatile for most part of the session, as Industry body Internet and Mobile Association of India (IAMAI) said the draft e-commerce policy may be inimical to the government's efforts of building a trillion-dollar digital economy by 2022, and is likely to severely bring down FDI flows in the sector. The association was also of the view that the process of making the policy itself was less than inclusive and open as compared to recent national-level policies like the National Digital Communications Policy 2018. Traders were also pessimistic with a report that Indian economy may be moving towards a slowdown as the country has off-late witnessed a drop in several key economic indicators. After a fall in auto sales, a shortfall in collection of direct taxes among others, now household savings in the country too have declined.

However, in the last leg of the trade, key indices gained traction to settle near their intraday high points, tracking firm European markets. The market participants took encouragement with the World Bank’s latest report stating said that India's Gross Domestic Product (GDP) growth is expected to accelerate moderately to 7.5% in the fiscal year 2019-20 (FY20), supported by continued investment strengthening, particularly private-improved export performance and resilient consumption. It added that the real GDP growth is estimated at 7.2% in 2018-19. Its data for the first three quarters suggested that growth has been broad-based. Industrial growth accelerated to 7.9%, making up for a deceleration in services. Meanwhile, agriculture growth was robust at 4%. Adding enthusiasm among investors, Prime Minister Narendra Modi sought another term to set on track the transformation of the country as a developed nation by 2047 when India completes 100 years of Independence.

On the global front, European markets were trading in green, as Dutch industrial production rose in February after falling in the previous two months. The Central Bureau of Statistics reported that industrial production rose 0.5 percent year-on-year in February, reversing a 0.6 percent fall in January. In December, production fell 4.3 percent. Besides, Hungary's exports and imports rose in February leading to an increase in the trade surplus. As per preliminary data from the Hungarian Central Statistical Office, the trade surplus grew by EUR 49 million year-on-year to EUR 891 million. Asian markets ended in green, as investors shrugged off the US threat of tariffs on a range of products and looked ahead to a slew of key events this week for direction. The ECB policy meeting, an EU summit on Brexit and the US Federal Reserve's release of the minutes from its March meeting are all scheduled for Wednesday.

Back home, stocks related to the auto industry ended higher, after Society of Indian Automobile Manufacturers (SIAM) urged the government to cut Goods and Services Tax (GST) on passenger vehicles and two-wheelers from 28% to 18%.  It fears that with the increase in prices, the demand for their products will be impacted. Presently, automobiles attract peak GST rate of 28% with additional cess ranging from 1% to 15%, depending on the length, engine size and type. Oil companies stocks remained in focus, amid reports that Indian refiners are holding back from ordering Iranian oil for loading in May pending clarity on whether Washington will extend a waiver from US sanctions against the OPEC-member.

Finally, the BSE Sensex gained 238.69 points or 0.62% to 38,939.22, while the CNX Nifty was up by 67.45 points or 0.58% to 11,671.95.

The BSE Sensex touched a high and a low of 38,978.99 and 38,598.72, respectively and there were 26 stocks advancing against 05 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index rose 0.15%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Realty up by 1.40%, Auto up by 1.21%, Bankex up by 1.09%, Metal up by 0.97% and PSU up by 0.72%, while Telecom down by 0.83% and Consumer Durables down by 0.40% were the only losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 4.08%, Tata Motors - DVR up by 3.17%, Tata Motors up by 2.67%, ICICI Bank up by 2.52% and Bajaj Auto up by 2.19%. On the flip side, Asian Paints down by 3.54%, Infosys down by 0.95%, Bharti Airtel down by 0.76%, Bajaj Finance down by 0.48% and ONGC down by 0.35% were the top losers.

Meanwhile, the World Bank in its latest report has said that India has retained its top spot on remittances, with its diaspora sending a whopping $79 billion back home in 2018 as against $65.3 billion in 2017 and $62.7 billion in 2016.

As per the report, China became second with remittances at $67 billion, followed by Mexico ($36 billion), the Philippines ($34 billion), and Egypt ($29 billion). The World Bank further said that remittances to South Asia grew 12% to $131 billion in 2018, outpacing 6% growth in 2017.

Besides, the report found that remittances to low-and middle-income countries reached a record high of $529 billion in 2018, an increase of 9.6% over the previous record high of $483 billion in 2017, while Global remittances, which include flows to high-income countries, reached $689 billion in 2018, up from $633 billion in 2017.
The CNX Nifty traded in a range of 11,683.90 and 11,569.70. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.50%, Wipro up by 4.19%, Tata Motors up by 3.22%, Coal India up by 2.70% and ICICI Bank up by 2.60%. On the flip side, Indiabulls Housing Finance down by 3.19%, Asian Paints down by 3.11%, Bharti Airtel down by 1.17%, Infosys down by 0.84% and UPL down by 0.64% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 22.08 points or 0.3% to 7,473.97, France’s CAC rose 18.44 points or 0.34% to 5,490.22 and Germany’s DAX was up by 22.24 points or 0.19% to 11,985.64.

Asian markets ended mostly higher on Tuesday as investors watched for Brexit developments and corporate earnings. Investors looked ahead to developments in Britain’s contentious move toward leaving the European Union, a mid-week meeting by the European Central Bank and the release of minutes from the latest US Federal Reserve meeting. Japanese shares ended a choppy session higher as investors braced for a slew of earnings announcements. Though, Chinese shares ended lower on profit taking as investors awaited more clarity in trade negotiations with Washington.