Post Session: Quick Review

Snapping three-straight day of closing high, Indian equity benchmarks ended Wednesday’s trade on a pessimistic note with losses of over half a percent, as investors booked profit ahead of the expiry of derivative contracts for the month of May due tomorrow. Sharp selling activity which took place during final hours of trade dragged the markets lower, with Sensex and Nifty slipping below their crucial 39,500 and 11,900 levels, respectively. Markets traded in red since the beginning, following feeble global cues. Traders remain concerned about the Department for Promotion of Industry and Internal Trade’s (DPIIT) latest data showing that foreign direct investment (FDI) in India declined for the first time in the last six years in 2018-19, falling by 1 per cent to $44.37 billion as compared to $44.85 billion in 2017-18. According to the data, FDI inflows in telecommunication, construction development, pharmaceuticals and power sectors declined significantly in 2018-19. Decline in foreign inflows could put pressure on the country's balance of payments and may also impact the value of the rupee.

In the final hour of trading, key bourses added more losses and traded near day’s low points, as some cautions also prevailed in the markets ahead of GDP number that will be released later this week. The market participants failed to take support with a global study showing that India has moved up one place to rank as the world’s 43rd most competitive economy on the back of its robust economic growth, a large labour force and its huge market size, while Singapore has toppled the US to grab the top position. Traders also overlooked a report that India can attract FDI to a ratio of 1.5 percent to 2 percent of its GDP by further improving on ease of doing business and building infrastructure. It also said that the country is in favourable position to attract foreign firms planning to relocate their manufacturing bases due to trade tension between the US and China.

On the global front, Asian markets ended mostly in red on Wednesday, as investors fretted over the outlook for world growth with trade tensions between Washington and Beijing showing no signs of abating. European markets were trading in red, as France's economic growth eased slightly in the first quarter after revision. Back home, shares of oil marketing companies (OMCs) were in focus after rating agency, Crisil in its latest report has said thinner spreads and rising under-recoveries are expected to shave the operating profit margins of oil marketing companies (OMCs) by 1.5-1.7 per cent in current financial year (FY20), even as crude prices remain elevated and volatile.

The BSE Sensex ended at 39535.61, down by 214.12 points or 0.54% after trading in a range of 39420.50 and 39767.93. There were 11 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.72%, while Small cap index was down by 0.51%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 0.67%, TECK up by 0.39%, Consumer Durables up by 0.26%, while Metal down by 1.98%, Auto down by 1.54%, PSU down by 1.40%, Basic Materials down by 1.32% and Industrials down by 1.13% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 2.35%, TCS up by 1.54%, HCL Tech. up by 1.03%, Hindustan Unilever up by 0.37% and Power Grid up by 0.34%. (Provisional)

On the flip side, SBI down by 3.36%, Tata Steel down by 2.77%, Tata Motors - DVR down by 2.57%, ICICI Bank down by 2.50% and Maruti Suzuki down by 2.42% were the top losers. (Provisional)

Meanwhile, the Department for Promotion of Industry and Internal Trade (DPIIT) in its latest data has showed that foreign direct investment (FDI) in India declined for the first time in the last six years in 2018-19, falling by 1% to $44.37 billion as compared to $44.85 billion recorded in 2017-18. Last time it was in 2012-13 when foreign inflows had registered a contraction of 36% to $22.42 billion compared to $35.12 billion in 2011-12. Since 2012-13, the inflows had been continuously growing and reached a record high in 2017-18.

As per the data, FDI inflows in telecommunication, construction development, pharmaceuticals and power sectors declined significantly in 2018-19. FDI in telecommunication dropped to $2.67 billion in 2018-19 from $6.21 billion in 2017-18, in construction development to $213 million ($540 million), in pharmaceuticals to $266 million ($1 billion) and in the power sector to $1.1 billion ($1.62 billion). However, sectors that recorded a growth in FDI includes services ($9.15 billion), computer software and hardware ($6.41 billion), trading ($4.46 billion), and automobile ($2.62 billion).

The country wise, Singapore has replaced Mauritius as the top source of foreign investment into India in the FY19, accounting for $16.22 billion inflows. India has received $8 billion FDI from Mauritius. The other major investors in the country includes Japan, the Netherlands, the UK, the US, Germany, Cyprus, the UAE and France. FDI is important as India would require huge investments in the coming years to overhaul its infrastructure sector to boost growth. Decline in foreign inflows could put pressure on the country's balance of payments and may also impact the value of the rupee.

The CNX Nifty is currently trading at 11867.55, down by 61.20 points or 0.51% after trading in a range of 11836.80 and 11931.90. There were 18 stocks advancing against 32 stocks declining on the index. (Provisional)

The top gainers on Nifty were Sun Pharma up by 2.31%, Bharti Infratel up by 2.29%, TCS up by 1.79%, GAIL India up by 1.61% and Britannia Industries up by 1.37%. (Provisional)

On the flip side, JSW Steel down by 4.28%, SBI down by 3.21%, Tata Steel down by 2.77%, Cipla down by 2.73% and Zee Entertainment down by 2.58% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 104.96 points or 1.44% to 7,163.99, France’s CAC fell 98.89 points or 1.86% to 5,213.80 and Germany’s DAX was down by 175.74 points or 1.46% to 11,851.31.

Asian markets ended mostly in red on Wednesday as investors reacted to falling US Treasury bonds yields, reflecting worries over an economic slowdown. Trade worries deepened after reports suggested that China could be considering restricting the export of rare earth minerals, which are crucial for the US technology industry. Though, Chinese shares closed a tad higher, shrugging off concerns over slowing growth and the standoff in Sino-US trade talks.