Post Session: Quick Review

Indian equity benchmarks witnessed a bloodbath for second straight session on Monday and ended at day’s low point, weighed down by muted global cues, rise in crude oil prices, growth concerns, and mixed March quarter results. Key indices opened in red and stayed in the negative terrain for whole trading session, as traders remain concerned about a private report that business sentiments continue to decline for the country's financial and macro-economic conditions in the second quarter of the year compared to the same period a year before. As per the report, Composite Business Optimism Index stands at 78.4 during Q2 2019 as against 85.0 during Q2 2018 marking a 7.7% decline. Traders took note of Arvind Panagariya’s statement that India must focus on growth of labour-intensive sectors to create decent jobs for the masses as well as give serious thought to privatising the public sector banks (PSBs), emphasized that the reform process must be completed in the coming five years.

The indices further extended losses and hit fresh intraday low in late trade, as sentiment on the street weakened further as India has again missed the target of becoming an electricity-surplus nation by a whisker as its peak power deficit stood at 0.8 percent and the overall energy deficit remained 0.6 percent in the financial year 2019. Investors’ sentiment was also pessimistic amid reports that National transporter Indian Railways account for nearly three-fifths of 344 central sector projects that are facing huge cost overrun due to delay in implementation for various reasons. The latest flash report of the Statistics and Programme Implementation Ministry (MOSPI) for December 2018 showed that total cost overrun of 205 delayed railway projects is whopping Rs 2.21 trillion. Investors overlooked a report that India’s growth trajectory holds immense potential for global stakeholders to establish energy, infrastructure and technology collaboration with the country.

On the global front, Asian markets ended mixed on Monday in the absence of fresh cues from Wall Street and European markets, which were closed for the Good Friday holiday. Back home, majority of gems & jewellery stocks ended lower with GJEPC data report indicating that owing to the factors like credit crunch, delays in goods and services tax (GST) refunds, and high import duties on polished diamond, India’s gems & jewellery exports fell 3.12% during 2018-19 (FY19).

The BSE Sensex ended at 38641.52, down by 498.76 points or 1.27% after trading in a range of 38585.65 and 39158.22. There were 7 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.57%, while Small cap index was down by 1.46%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 0.56%, TECK up by 0.48% and Telecom up by 0.24%, while Oil & Gas down by 3.25%, Energy down by 2.78%, Realty down by 2.60%, Bankex down by 2.01% and Metal down by 1.87% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 1.41%, TCS up by 0.74%, Infosys up by 0.59%, NTPC up by 0.52% and HCL Tech. up by 0.17%. (Provisional)
On the flip side, Yes Bank down by 6.74%, Indusind Bank down by 4.06%, Reliance Industries down by 2.79%, ICICI Bank down by 2.64% and HDFC down by 2.35% were the top losers. (Provisional)

Meanwhile, in order to create decent jobs for the masses as well as give serious thought to privatising the public sector banks (PSBs), Arvind Panagariya, who had served as the first Vice Chairman of the NITI Aayog from January 2015 to August 2017, has said that India must focus on growth of labour-intensive sectors. He also highlighted that the reform process must be completed in the coming five years.

Highlighting the priority areas, he said that India needs a clear focus on the growth of labour-intensive sectors such as apparel, footwear, furniture, kitchenware and other light manufactures to create decent jobs for the masses. He said ‘We need firms in these sectors that are globally competitive and capture the space in export markets that China has been quitting due to its high wages. This requires flexible labour and land laws and an ecosystem that is yet friendlier to large firms’.

Panagariya explained that one way to achieve this is to create Shenzhen-style Coastal Employment Zones (in China) that create zones of 500 square kilometers or more along the coast that are characterized by highly entrepreneur-friendly regime with respect to land, labour and international trade. He added ‘Eventually, we must extend this regime to other parts of the country as well’. He stressed that it is also time that ‘we gave a serious thought to privatising PSBs’. He also emphasised on the need for major reforms in the area of education, saying the Right to Education Act has wholly ‘neglected quality’.

The CNX Nifty ended at 11593.75, down by 159.05 points or 1.35% after trading in a range of 11583.95 and 11727.05. There were 13 stocks advancing against 37 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 1.34%, Wipro up by 1.14%, Infosys up by 0.52%, NTPC up by 0.52% and Tech Mahindra up by 0.52%. (Provisional)

On the flip side, Indiabulls Housing Finance down by 8.88%, Yes Bank down by 6.88%, BPCL down by 6.14%, Indusind Bank down by 4.16% and Indian Oil Corp. down by 4.00% were the top losers. (Provisional)

Asian markets ended mixed on Monday in the absence of fresh cues from Wall Street and European markets, which were closed for the Good Friday holiday. Chinese shares ended lower amid speculation the government may slow down monetary easing. Meanwhile, Japanese market ended up, supported by gains in financial, automobile and chemical sections. Hong Kong’s market remained closed for the Easter Monday holiday.