Post Session: Quick Review

Indian equity benchmarks traded with volatility, but in green terrain, throughout the day and finally ended with marginal gains on Wednesday, on the back of buying by participants along with fall in crude oil prices. With this, the markets snapped a two-session losing run. Markets made optimistic start and traded slightly higher in early deals, taking support from a report that the finance ministry is working on one more booster dose to give a leg-up to the economy that has hit over six-year low of 5 per cent. As per the report, the blue print for the stimulus is ready that would be announced by Finance Minister Nirmala Sitharaman in the next few days. Some support also came with Minister of Commerce and Industry and Railways Piyush Goyal’s statement that government is planning to launch a National Logistics Policy to reduce trade costs. He added that all transport sectors of railways, civil aviation, roads and shipping would work towards bringing logistics costs below 10%.

However, further gains got restricted as anxiety spread among the traders with report that India's goods and services tax (GST) panel is unlikely to approve lowering the tax for the auto and allied components sector this week, as a study has warned of major revenue losses. Some concerns also came in with global rating agency Moody's stating that reduction in the risk weight on consumer credit by the Reserve Bank of India is credit negative as it may lead to increased exposure by lenders to this loan segment. Traders also took note of Niti Aayog chief executive Amitabh Kant’s statement that structural reforms in agriculture and exports are needed to bring growth rate back to higher levels. He also said the fundamentals of the economy are intact which will help the government take back the economy to the higher growth trajectory soon despite the global slowdown.

On the global front, Asian markets ended mixed on Wednesday as investors remained on the sidelines ahead of an expected reduction in US borrowing costs by the Federal Reserve. European markets were trading in green. Back home, power stocks were in focus as India Ratings & Research maintained a stable-to-negative outlook on the power sector for the remaining FY20, despite an increase in electricity demand and a rise in thermal plant load factor (PLF). IT services stocks too were in focus with rating agency ICRA’s statement that growth of IT services companies is expected to remain in 6-8 per cent range in US dollar terms in 2019-20, even as the profitability of these firms declined in the first quarter on account of higher employee expenses.

The BSE Sensex ended at 36567.44, up by 86.35 points or 0.24% after trading in a range of 36465.92 and 36712.99. There were 19 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.37%, while Small cap index was up by 0.31%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.46%, Metal up by 1.35%, Oil & Gas up by 1.23%, PSU up by 1.11% and Utilities up by 0.90%, while Telecom down by 0.21% and Auto was down by 0.05% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 3.88%, Vedanta up by 2.92%, SBI up by 2.32%, Tech Mahindra up by 1.61% and Bajaj Finance was up by 1.29%. (Provisional)

On the flip side, ONGC down by 2.00%, Yes Bank down by 1.61%, Bharti Airtel down by 1.02%, Sun Pharma down by 1.00% and HDFC Bank was down by 1.00% were the top losers. (Provisional)

Meanwhile, in order to give a leg-up to the economy that has hit over six-year low of 5 per cent, the finance ministry is working on one more booster dose. The blue print for the stimulus is ready that would be announced by Finance Minister Nirmala Sitharaman in the next few days. Recently, the government had announced a slew of measures in three dosages which include a special window for real estate, export incentives, bank consolidation and sops for micro, small and medium enterprises (MSMEs) and the automobile sector.

The first set of announcements included rollback of the enhanced surcharge imposed on foreign portfolio and domestic investors in Budget 2019-20. Sitharaman had in her maiden Budget raised the surcharge on income tax paid by super-rich individuals. The surcharge, levied on top of the applicable income tax rate, was hiked from 15 per cent to 25 per cent for those with a taxable income of Rs 2-5 crore, and to 37 per cent for those earning more than Rs 5 crore. This increased the effective tax rate for these two groups by 3.12 per cent and 7 per cent to 39 per cent and 42.74 per cent, respectively.

Some 40 per cent of foreign portfolio investors (FPIs) automatically came under the higher tax rate as they have been investing as a non-corporate entity, such as trust or association of persons (AOPs), which in the income tax law is classified as an individual for the purpose of taxation. It was followed by announcement with regard to consolidation of 10 public sector banks (PSBs) into four. Besides, the government announced a slew of measures to boost exports and the real estate sector.

The CNX Nifty ended at 10848.65, up by 31.05 points or 0.29% after trading in a range of 10804.85 and 10885.15. There were 33 stocks advancing against 17 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Steel up by 3.70%, BPCL up by 3.59%, Vedanta up by 3.16%, GAIL India up by 2.77% and SBI up by 2.35%. (Provisional)

On the flip side, Britannia Industries down by 2.88%, Indiabulls Housing Finance down by 2.81%, Coal India down by 2.61%, ONGC down by 1.97% and Eicher Motors down by 1.57% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 11.94 points or 0.16% to 7,332.34, France’s CAC increased 6.87 points or 0.12% to 5,622.38 and Germany’s DAX increased 10.71 points or 0.09% to 12,383.32.

Asian markets ended mixed on Wednesday as investors awaited the US Federal Reserve's latest decision on monetary policy later in the day at which officials are expected to cut interest rates again. Meanwhile, Chinese shares ended up as investors looked for progress in Sino-US trade talks scheduled to start in Washington on Thursday. Seoul shares ended higher by easing crude oil prices after Saudi Arabia said more than half of the country's daily crude oil production that was knocked out by an attack had been recovered and that production capacity at its targeted plants would be fully restored by the end of the month.