Post Session: Quick Review

Indian equity benchmarks traded jubilantly throughout the day on Thursday and ended with decent gains of over one and half percent, mirroring strength in Asian peers amid no further escalation in US-Iran tensions. Nifty settled above crucial 12,200 mark, while Sensex ended just shy of 41,450 mark. Domestic equity indices witnessed a gap-up start and traded with healthy gains, as traders took support with the Industry body Ficci stating that the government should infuse capital in the economy without worrying about the fiscal deficit target as the GDP growth is estimated to slip to 11-year low of 5% during 2019-20. Ficci President Sangita Reddy said the 5% GDP growth estimate for the current financial year is on expected lines as the economic expansion in the first half of the year has been moderate. 

Key indices continued their rally to reach at fresh intraday high points in last leg of trade, on the back of softening crude oil prices coupled with smart recovery in the rupee value against dollar. Buying across sectors barring information technology (IT) shares - led by realty, auto and banking shares – also pushed the markets higher. The market participants also took a note of India Ratings and Research stating that the country will have to increase its labour productivity growth to 6.3 percent to attain 8 percent economic growth. The labour productivity growth in FY19 was 5.2 percent.

On the global front, Asian markets ended higher on Thursday, while European markets were trading in green, after the United States and Iran backed away from further military escalation and investors returned to riskier assets on firmer hopes of a Sino-U.S. trade deal. U.S. President Donald Trump imposed more sanctions on Iran, quelling fears of military retaliation and defusing a crisis that sparked a rush to safe-haven investments. Back home, majority of banking stocks ended higher with report that the banking sector is going to see good recoveries from non-performing assets in the third and fourth quarters of the current fiscal (FY20), helped by resolution of some large stressed accounts. It said the time taken for resolution of bad loans is also likely to reduce going ahead with a stronger resolution mechanism. Besides, Textiles sector was in focus after Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said free trade agreements (FTAs) with Australia, Canada, and the European Union will help boost the country's textile exports. He also said the government should pursue FTAs with these countries as they hold huge potential for India's exports.

The BSE Sensex ended at 41446.29, up by 628.55 points or 1.54% after trading in a range of 41175.72 and 41482.12. There were 26 stocks advancing against 4 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 1.48%, while Small cap index was up by 1.52%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.71%, Auto up by 2.61%, Bankex up by 2.28%, Industrials up by 2.14% and Consumer Discretionary Goods & Services up by 2.10%, while IT down by 0.06% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 3.86%, Indusind Bank up by 3.34%, Mahindra & Mahindra up by 3.15%, SBI up by 3.14% and Maruti Suzuki up by 2.75%. (Provisional)

On the flip side, TCS down by 1.62%, HCL Technologies down by 0.93%, NTPC down by 0.58% and Sun Pharma down by 0.02% were the top losers. (Provisional

Meanwhile, the World Bank in its latest edition of the Global Economic Prospects has stated that growth in India is projected to decelerate to 5% in financial year (FY) 2019/20, which ends March 31, amid enduring financial sector issues. But, it also said that growth is likely to recover to 5.8% in the following financial year. It added that key risks to the outlook include a sharper-than-expected slowdown in major economies, a re-escalation of regional geopolitical tensions, and a setback in reforms to address impaired balance sheets in the financial and corporate sectors.

In India, the World Bank said tighter credit conditions in the non-banking sector are contributing to a substantial weakening of the domestic demand in the country. It also said activity was constrained by insufficient credit availability, as well as by subdued private consumption. It added that India’s economic activity slowed substantially in 2019, with the deceleration most pronounced in the manufacturing and agriculture sectors, whereas government-related services sub-sectors received significant support from public spending. GDP growth decelerated to five percent and 4.5% in the April-June and July-September quarters of 2019, respectively, the lowest readings since 2013.

On the global front, the report said the global economic growth is forecast to edge up to 2.5% in 2020 as investment and trade gradually recover from last year's significant weakness, but downward risks persist. The US' growth is forecast to slow to 1.8% this year, reflecting the negative impact of earlier tariff increases and elevated uncertainty. The Euro area's growth is projected to slip to a downwardly revised 1% in 2020 amid weak industrial activity. It added that with the growth in emerging and developing economies likely to remain slow, policymakers should seize the opportunity to undertake structural reforms that boost broad-based growth, which is essential to poverty reduction.

The CNX Nifty ended at 12215.40, up by 190.05 points or 1.58% after trading in a range of 12132.55 and 12224.05. There were 43 stocks advancing against 7 stocks declining on the index. (Provisional)

The top gainers on Nifty were JSW Steel up by 5.79%, Bharti Infratel up by 5.69%, Tata Motors up by 5.40%, ICICI Bank up by 3.74% and Indusind Bank up by 3.37%. (Provisional)

On the flip side, TCS down by 1.56%, Coal India down by 1.17%, HCL Technologies down by 0.82%, Britannia Industries down by 0.62% and GAIL India down by 0.36% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 49.43 points or 0.65% to 7,624.36, France’s CAC rose 23.15 points or 0.38% to 6,054.15 and Germany’s DAX was up by 154.80 points or 1.16% to 13,474.98.

Asian markets ended higher on Thursday amid easing concerns surrounding the Middle East conflict. US President Donald Trump said there were no casualties from Iran's Wednesday attack on US forces in Iraq, and indicated the US would hit Iran with new sanctions, but not respond militarily. Japanese shares ended up as the safe-haven yen retreated on easing Middle East worries. Further, Chinese shares ended higher as investors drew optimism from data showing China's consumer prices increased at a steady pace in December, the National Bureau of Statistics said in a report. Consumer prices advanced 4.5 percent year-on-year in December, the same rate as seen in November. Inflation was forecast to rise to 4.7 percent. On the other hand, producer prices fell 0.5 percent annually after easing 1.4 percent a month ago. That marked the sixth month of contraction as manufacturers struggled with weak demand amid the trade war.