Post Session: Quick Review

Indian equity benchmarks ended at fresh record closing highs on Tuesday. The start of the day was on a positive note, as the Ministry of Finance has released the 9th weekly instalment of Rs 6,000 crore to the States. Out of this, an amount of Rs 5,516.60 crore has been released to 23 States and an amount of Rs 483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. Traders also got some relief after Union minister Nitin Gadkari said that the Micro, Small and Medium Enterprises Ministry is contemplating fresh plans and laws to find a solution of the receivables issue as outstanding dues are creating working capital problem for the sector. The MSME and Road Transport minister acknowledged that the receivables issue continues to be a major problem.

Key indices cut some of their early gains but managed to trade in green terrain for the whole trading session, taking support with report of UN stating that the India's economy could prove to be the ‘most resilient’ in the subregion of South and South-West Asia over the long term, the positive but lower economic growth post COVID-19 pandemic and the country's large market will continue to attract investments. The growth, however, was mainly driven by India, which accounted for 77 percent of the total inflows and received $51 billion in 2019, up 20 percent from the previous year. Besides, Reserve Bank of India (RBI) paper stated that maintaining the inflation target at 4 percent is appropriate for India as targeting a lower rate could impart deflationary bias to the monetary policy. It said under the current dispensation, the RBI has been mandated by the government to maintain retail inflation at 4 percent with a margin of 2 percent on either side.

On the global front, European markets were trading higher following a rally in U.S. stocks on Monday. Asian markets ended mixed on Tuesday, as consumer confidence in South Korea tumbled in December, the Bank of Korea said on Tuesday after its Composite Consumer Sentiment Index (CCSI) came in with a score of 89.8 - down sharply from 97.9 in November. Consumer sentiment regarding current living standards was three points lower than in November at 86, and that concerning the future outlook for living standards was five points lower at 89. Sentiment related to future household income was three points lower than in November at 93, and that concerning future household spending was five points lower at 99.

The BSE Sensex ended at 47613.08, up by 259.33 points or 0.55% after trading in a range of 47361.90 and 47714.55. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.07%, while Small cap index was up by 0.16%.(Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 1.41%, IT up by 0.65%, TECK up by 0.50%, Consumer Durables up by 0.13% and FMCG up by 0.10%, while Metal down by 1.32%, Power down by 0.81%, Energy down by 0.67%, Basic Materials down by 0.36% and Healthcare down by 0.30% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 5.41%, Axis Bank up by 2.06%, Tech Mahindra up by 1.95%, HDFC up by 1.92% and ICICI Bank up by 1.68%. On the flip side, Nestle down by 1.74%, NTPC down by 1.69%, Power Grid down by 1.02%, Dr. Reddy’s Lab down by 0.91% and Reliance Industries down by 0.70% were the top losers. (Provisional)

Meanwhile, in order to meet the GST compensation shortfall, the Ministry of Finance has released the 9th weekly instalment of Rs 6,000 crore to the States. Out of this, an amount of Rs 5,516.60 crore has been released to 23 States and an amount of Rs 483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

The amount released this week was the 9th instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 5.1508%. So far, an amount of Rs 54,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7488%.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India has also granted additional borrowing permission equivalent to 0.50 % of Gross States Domestic Product (GSDP)to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources.

The CNX Nifty ended at 13932.60, up by 59.40 points or 0.43% after trading in a range of 13859.90 and 13967.60. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indusind Bank up by 5.30%, Axis Bank up by 2.03%, Tech Mahindra up by 1.96%, HDFC up by 1.72% and ICICI Bank up by 1.67%. On the flip side, Coal India down by 1.85%, NTPC down by 1.84%, Nestle down by 1.80%, Hindalco down by 1.79% and Tata Motors down by 1.56% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 119.00 points or 1.83% to 6,621.11, France’s CAC increased 30.06 points or 0.54% to 5,618.44 and Germany’s DAX was up by 100.87 points or 0.73% to 13,891.16.

Asian markets ended mixed on Tuesday following Wall Street's record highs overnight as US President Donald Trump’s signing of long-awaited $2.3 trillion corona virus pandemic aid bill increased optimism for an economic recovery. While a post-Brexit trade deal between European Union and the United Kingdom also supported market sentiment. Japanese stocks ended higher, led by gains scored by major exporters due to weaker yen. Further, Hong Kong shares finished higher as gains in shares of Alibaba Group Holding led a rebound in tech stocks following a sharp sell-off in previous sessions.