LIV: Benchmarks end with half a percent gains on Friday
Indian equity benchmarks ended the Friday’s trade with a gain of around half a percent with frontline gauges recapturing their crucial 27,950 (Sensex) and 8,450 (Nifty) levels. Sentiments remained buoyed on continued hopes of rate cut by the Reserve Bank at its policy review early next month. Some support came with government’s decision of relaxing FDI norms for NRIs, PIOs and OCI. Government has decided that non-repatriable investments by NRIs, OCIs and PIOs will be treated as domestic investments and will not be subject to foreign direct investment caps.
Also, the Reserve Bank of India has trebled the limit on trade-linked remittances to Rs 15 lakh from the earlier Rs 5 lakh. It has also allowed overseas banks to enter into swaps with other overseas banks besides domestic banks to facilitate disbursals of rupee loans by overseas lenders. Bulls also turned boisterous after finance minister highlighted the achievements of the government on completion of first year in the office. Finance Minister claimed that there was more enthusiasm in India after Modi assumed office on May 26, 2014 and that the stability returned to the economy in last one year.
On the global front, European shares steadied around the previous session's three-week highs on Friday, with investors focusing on speeches from leading central bankers due later in the day for hints about the market's near-term direction. European Central Bank President Mario Draghi and Bank of England Governor Mark Carney, along with other central bankers, will be addressing an ECB Forum in Portugal later in the day. Asian markets ended mostly in the green, led by rise in Chinese benchmark which hit fresh seven-year highs on Friday and notched up their biggest weekly gain in two months as the market continued to rally on hopes of more stimulus from the government after a private survey showed more weakness in the vast manufacturing sector.
Back home, appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 63.53 per dollar at the time of equity market closing against the Thursday’s close of 63.63 on the Interbank Foreign Exchange. Meanwhile, stocks related to fast moving consumer goods space remained on buyers’ radar on report that the Southwest Monsoon has reportedly further advanced and arrived over Sri Lanka. Additionally, upstream oil companies edged higher after the oil ministry set interim rules that exempt state-run upstream companies from giving any discount on crude and refined fuel sales if global oil prices average up to $60 a barrel this quarter.
On the flip side, banking stocks which soared after the Reserve Bank of India (RBI) extended the timeframe to spread over the shortfall arising out of sale of bad assets to 31 March 2016 concluded lower on profit-booking. The index also took a hit for the worst after SBI shares slipped over 2% even after the bank reported better than expected 23.1% growth in Q4 net profit at Rs 3742 crore from Rs 3040.7 crore in corresponding quarter last quarter and improvement in its asset quality.
The NSE’s 50-share broadly followed index Nifty rose by around forty points and ended above the psychological 8,450 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by around one hundred and fifty points to finish above the psychological 27,950 mark. Broader markets too traded in-line with benchmarks and ended the session slightly in the green. The market breadth remained in favor of advances, as there were 1,197 shares on the gaining side against 1,518 shares on the losing side while 119 shares remain unchanged.
Finally, the BSE Sensex soared by 148.15 points or 0.53% to 27957.50, while the CNX Nifty gained 37.95 points or 0.45% to 8,458.95.
The BSE Sensex touched a high and a low of 28071.16 and 27828.61, respectively. The BSE Mid cap index was up by 0.12%, while Small cap index up by 0.06%.
The top gainers on the Sensex were HDFC up by 2.51%, TCS up by 2.42%, Sun Pharma up by 2.29%, ONGC up by 1.53% and Larsen & Toubro up by 1.04%. On the flip side, SBI down by 2.38%, Hindalco down by 1.30%, Vedanta down by 0.67%, Wipro down by 0.66% and Tata Power down by 0.59% were the top losers.
The gaining sectoral indices on the BSE were IT up by 0.91%, Healthcare up by 0.86% Capital Goods up by 0.78%, Oil & Gas up by 0.60% and TECK up by 0.60% while, Consumer Durables down by 0.68%, Bankex down by 0.42%, Realty down by 0.25%, Metal down by 0.18% and INFRA down by 0.04% were the losing indices on BSE.
Meanwhile, Commerce and Industry Minister Nirmala Sitharaman has said the government will consider repealing the 51 percent FDI policy in multi-brand retail, while no proposal would be entertained for opening supermarkets in India by foreign players. The union cabinet minister has said that “I will go back to the Cabinet and say should we delete one document...I am not going to entertain any proposal in multi-brand retail.” She also said 'we will ensure FDI in e-commerce does not become a back door for FDI into multi-brand retail'.
Recently, the Department of Industrial Policy and Promotion (DIPP) in its consolidated FDI policy retained the previous UPA government's decision to allow foreign retailers to open multi-brand stores with 51 percent ownership. Though, Finance Minister Arun Jaitley had said the BJP was 'never' in favour of allowing foreign direct investment in multi-brand retail and a recent government notification only published the extant policy on it.
The ruling BJP during its poll campaign had said that “Barring the multi-brand retail sector, FDI will be allowed in sectors wherever needed for job and asset creation, infrastructure and acquisition of niche technology and specialised expertise.”
On the contrary Arvind Subramanian, the chief economic adviser in the finance ministry had said that though it’s a political call but as a purely technical and economic analysis, it is a desirable way to proceed.
The CNX Nifty touched a high and low of 8,489.55 and 8,420.60 respectively.
The top gainers on Nifty were TCS up by 2.59%, HDFC up by 2.47%, Sun Pharmaceuticals Industries up by 1.91%, HCL Technologies up by 1.55% and Lupin up by 1.39%. On the flip side, Idea Cellular down by 3.08%, State Bank of India down by 2.88%, UltraTech Cement down by 2.79%, Hindalco Industries down by 1.73% and Vedanta down by 1.44% were the top losers.
Most of European Markets were trading in the red; Germany's DAX was down by 0.46% and France's CAC down by 0.32% while UK's FTSE was up by 0.34%.
The Asian markets closed mostly in green on Friday, with Hong Kong and mainland shares surging on hopes that the latest disappointing Chinese economic data will spur the country’s leaders to announce further stimulus measures. The Bank of Japan board voted as expected to keep monetary policy steady, with Takahide Kiuchi repeating his call for a lower bond buying target in a singular note of dissent. Kiuchi wants the BoJ to cut the level of purchases from 80 trillion yen annually set in October last year to about 45 trillion yen. The board however did say that private consumption domestically has been resilient and exports are picking up, though downside risks remain from weak growth in Europe. The overall economic assessment was revised stronger slightly. The BoJ also stated that the economy is expected to continue recovering moderately, slightly different from last month’s outlook that it will continue its moderate recovery trend.
Singapore’s industrial output in April is forecast to have fallen from a year earlier, after a recent survey of purchasing managers showed that the city-state’s factory activity hit a two-year low. Singapore’s Consumer Price Index in April probably fell from a year earlier for the sixth straight month, likely dragged down by lower housing costs. The all-items Consumer Price Index (CPI) was seen easing 0.1% from a year earlier. Japan’s All Industries Activity Index fell to a seasonally adjusted -1.3%, from 0.2% in the preceding month whose figure was revised up from 0.1%.
