Post Session: Quick Review

Indian equity benchmarks traded with volatility throughout the day and finished Thursday’s session with gains of around half a percent, backed by strong global equities. This was the second consecutive day of rise for the domestic markets. The Sensex scaled lifetime high and Nifty settled above important psychological level of 12,000. Markets started the day on optimistic note as traders took encouragement with Cabinet clearing the structure of the proposed exclusive alternate investment fund (AIF) for the real estate sector with an initial corpus of Rs 25,000 crore, more inclusive terms and a commitment to continue to provide more budget funds, in addition to the initial Rs 10,000 crore, as and when demand arises. Some support also came with Petroleum Minister Dharmendra Pradhan’s statement that the government is on track to meet the target of cutting India's oil import dependence by 10 percent by 2020.

However, markets reversed all of their gains and witnessed some selling in afternoon deals, as traders turned cautious with the International Monetary Fund (IMF) stating that the Indian government needs to become more ‘transparent’ on the fiscal numbers as it is a ‘laggard’ among the G20 peers on this front. Though, the selling proved short-lived as markets regained traction in the last leg of trade, taking support from Prime Minister Narendra Modi’s statement that India is taking several steps to create an enabling ecosystem for investors. Separately, in order to protect the interests of farmers and boost agriculture exports, Niti Aayog Vice-Chairman Rajiv Kumar has called for a review of regulations under the Essential Commodities Act (ECA).

On the global front, Asian markets ended mostly higher on Thursday, while European markets were trading in green, after China said it had agreed with the United States on a plan to gradually remove each other's tariffs, fuelling hopes they can resolve a trade war that has roiled the global economy. Back home, oil and gas sector were in focus after Union Minister Dharmendra Pradhan said India will see a huge $100 billion investment in creating oil and gas infrastructure by the year 2024 as the world's third-largest energy consumer steps up spending to meet growing demand.

The BSE Sensex ended at 40669.80, up by 200.02 points or 0.49% after trading in a range of 40421.07 and 40676.61. There were 16 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.69%, while Small cap index was up by 0.55%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.06%, Energy up by 0.97%, Telecom up by 0.96%, Consumer Durables up by 0.79% and Realty up by 0.75%, while PSU down by 0.83%, Oil & Gas down by 0.69%, Capital Goods down by 0.54%, Utilities down by 0.51% and Auto down by 0.21% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 3.22%, Indusind Bank up by 2.81%, Reliance Industries up by 2.00%, ITC up by 1.82% and Asian Paints up by 1.76%. (Provisional)

On the flip side, Yes Bank down by 3.71%, ONGC down by 2.31%, Hindustan Unilever down by 1.88%, Tata Motors down by 1.69% and Tata Motors - DVR down by 1.68% were the top losers. (Provisional)

Meanwhile, amid concerns over fiscal deficit slippages, the International Monetary Fund (IMF) has said that the Indian government needs to become more ‘transparent’ on the fiscal numbers as it is a ‘laggard’ among the G20 peers on this front. The government has been missing its budgeted fiscal targets for the past few years and there is a need for a ‘credible fiscal consolidation’ which is more ambitious as well, and added that this is more so as government has not addressed how it will make up for the massive Rs 1.45 trillion tax giveaways in the form of corporate tax cuts.

IMF’s deputy director Anne-Mary Gulde said fiscal transparency should be increased. It is fairly difficult for the private sector to get the full picture on fiscal standing. She also said India is somewhat lacking in a programme on G20 data initiative on fiscal transparency where comparative countries have all made greater progress. She said there is also a need for more credible fiscal consolidation as such a move will help reduce the relatively high level of debt and free up financial resources for the private sector. She highlighted that fiscal stimulus is not possible to revive the sagging growth due to the relatively high level of public debt compared to the emerging economy peers.

Welcoming the steep corporate tax cuts to get the levies at par with competition, she rued that so far little has been done to offset the revenue impact of the same. She said ‘we feel that the revenue impact needs to be considered going forward and compensated for...we would urge that fiscal policy be formulated against more realistic background to give a more clear direction to private sector expectations’. She said ‘we see structural challenges and a weak cyclical position; we need to look at policies that address the cyclical weakness which will also address the structural challenges going forward’ and called for urgent reform measures in the labour, land and factor markets to revive and sustain growth.

The CNX Nifty ended at 12017.80, up by 51.75 points or 0.43% after trading in a range of 11946.85 and 12021.40. There were 29 stocks advancing against 21 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 4.16%, Sun Pharma up by 3.19%, Indusind Bank up by 2.73%, Hindalco up by 2.31% and JSW Steel up by 1.91%. (Provisional)

On the flip side, UPL down by 7.03%, Yes Bank down by 3.49%, GAIL India down by 3.40%, ONGC down by 2.21% and BPCL down by 2.19% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 30.05 points or 0.41% to 7,426.70, France’s CAC rose 13.06 points or 0.22% to 5,879.80 and Germany’s DAX was up by 111.25 points or 0.84% to 13,291.14.

Asian markets ended mostly higher on Thursday on expectations that China's latest push for more tariff rollbacks won't derail progress toward the ‘phase one’ agreement. Japanese shares ended slightly higher, although some gains were capped as heavyweight Softbank Group posted its first quarterly loss in 14 years. Meanwhile, Chinese shares ended unchanged amid worries over possible delays in a first-phase US-China trade deal.