Indian equity markets concluded the week on a sluggish note as the benchmarks showcased an unenthusiastic performance on Friday and settled with moderate cuts of around two tens of a percent. Sentiments remained subdued with the minutes of the RBI's April 6 policy meeting suggest that the next move of the central bank will likely be a hike in key policy rates. All members expressed concern about stickiness in core inflation and believed that the disinflationary effect of demonetisation will be transient. The minutes of the MPC meeting was made public yesterday. Further, investors continued to keep an eye on developments in France following news that a policeman was shot dead in Paris in a suspected terrorist attack just days before the presidential election. The polls show a nail-bitingly close race between four candidates, setting the stage for heightened volatility. Investors ultimately expect victory from the centrist Emmanuel Macron but are fretting over the likelihood of a strong showing by either far-Right candidate Marine Le Pen or far-Left candidate Jean-Luc Mélenchon. Both Marine Le Pen and Jean-Luc Melenchon, say they want to tear up agreements that bind together the 28 European Union nations. A victory of either could drive a 5 to 10% selloff of European equities. Other contenders seen as more supportive of EU membership include Francois Fillon, a conservative former prime minister, and Emmanuel Macron, a former banker and economy minister. On the domestic front, inventor sentiments got undermined after deputy governor of RBI, SS Mundra said that the Indian government and the Reserve Bank of India had not yet reached an agreement on a new plan to clean up the record troubled debt accumulated at the country's lenders. Meanwhile, sugar stocks edged higher after the Uttar Pradesh government asked sugar mills to clear cane dues of farmers within next 14 days, while assuring their delegation that it will give all facilities to establish new mills in the state.
On the global front, Asian stocks ended the week on a positive note, amid renewed hopes of tax reform in the US after Treasury Secretary Steven Mnuchin indicated that the Trump administration plans to unveil a major tax reform plan very soon. The Japanese yen weakened and crude prices rose after four days of losses, further supporting sentiment heading toward the Sunday presidential election in France. The outcome is too close to call, although polls show centrist candidate Emmanuel Macron with a narrow lead. Further, Chinese shares ended slightly higher but posted their worst weekly loss this year on concerns over cooling growth and tightening regulatory scrutiny. Meanwhile, shares on Wall Street looked set to open marginally higher, with the main indexes having closed between 0.75% and 0.9% higher on rising expectations for first-quarter corporate profits.
Back home, the local benchmarks got off to a rollicking opening, tracking positive trend seen in other Asian markets after Wall Street rallied with Nasdaq hitting record high on strong US corporate earnings. Thereafter, the indices traded around the psychological 29,500 (Sensex) and 9,150 (Nifty) levels through the morning trades. But the optimism soon started showing signs of easing in late hours of trade and profit booking in few sectors and drifting European markets weighed down the local bourses by the end of session. Eventually, the NSE's 50-share broadly followed index - Nifty plunged by around quarter percent to settle above the crucial 9,100 support level, while Bombay Stock Exchange's Sensitive Index - Sensex took fifty-seven points cut and closed below the psychological 29,400 mark. However, the broader markets showed some resilience and settled on a positive note, outperforming their larger peers by quite a margin. The market breadth remained optimistic, as there were 1449 shares on the gaining side against 1422 shares on the losing side, while 143 shares remained unchanged.
Finally, the BSE Sensex declined 57.09 points or 0.19% to 29365.30, while the CNX Nifty was down by 17 points or 0.19% to 9,119.40.
The BSE Sensex touched a high and a low of 29584.34 and 29259.42, respectively and there were 7 stocks on gainers side as against 23 stocks on the losers side on the index.
The broader indices ended in green; the BSE Mid cap index gained 0.02%, while Small cap index was up by 0.25%.
The top gaining sectoral indices on the BSE were Realty up by 2.37%, Telecom up by 0.75%, Energy up by 0.75%, Utilities up by 0.31% and Power up by 0.28%, while FMCG down by 0.97%, Healthcare down by 0.76%, Metal down by 0.59%, Basic Materials down by 0.47% and Auto down by 0.41% were the top losing indices on BSE.
The top gainers on the Sensex were HDFC Bank up by 2.38%, Reliance Industries up by 2.22%, NTPC up by 1.83%, Asian Paints up by 0.43% and Larsen & Toubro up by 0.39%. On the flip side, Sun Pharma down by 2.41%, Cipla down by 1.84%, ITC down by 1.81%, Adani Ports & SEZ down by 1.72% and Power Grid down by 1.44% were the top losers.
Meanwhile, Commerce and Industry Minister Nirmala Sitharaman said that frequent fluctuation in currencies across the world, not just the Indian rupee, has become a new normal. She also said that the value of the currency is only one factor and exporters in India have learnt to take into account currency fluctuation while planning their consignments.
For enhancing export competitiveness, the minster has stated that it is not just the currency which gives the competitiveness but there are some other factors like infrastructure, raw material cost, energy supplies and state restrictions which are equally essential for exporters. Adding further, she said that rising of the local currency against the US dollar makes export uncompetitive as per unit realization comes down. She also highlighted that the exchange rate alone cannot be the one cause for export competitiveness and the volatility in currencies across the world has been the new normal in the last few years.
Sitharaman further said that strengthening of the Indian rupee is also a reflection on the performance of the economy and noted that since January, the domestic currency has strengthened by over 5 per cent against the US dollar. She added that a section of exporters too has expressed anxieties that rupee appreciation can impact their margins at a time when export has seen a growth.
Meanwhile, the export growth touched over five year high of 27.6 per cent in March on the back of better performance of petroleum and engineering sector, though the expansion during financial year 2016-17 stood at only 4.7 per cent. During the last financial year, exports aggregated at $274.64 billion. In March, outward shipments were at $29.23 billion.
The CNX Nifty traded in a range of 9,183.65 and 9,088.75. There were 15 stocks in green as against 36 stocks in red on the index.
The topgainers on Nifty were Bharti Infratel up by 2.99%, Reliance Industries up by 2.59%, HDFC Bank up by 2.50%, NTPC up by 2.02% and Tech Mahindra up by 1.65%. On the flip side, Sun Pharma own by 2.66%, Wipro down by 2.45%, Bank of Baroda down by 2.39%, Adani Ports & SEZ down by 1.93% and Grasim down by 1.86% were the top losers.
The European markets were trading mostly in red; UK’s FTSE 100 decreased 9.83 points or 0.14% to 7,108.71, France’s CAC decreased 27.12 points or 0.53% to 5,050.79, while Germany’s DAX increased 6.97 points or 0.06% to 12,034.29.
Asian equity markets ended mostly in green on Friday after a strong session in the US that reflected solid corporate earnings and renewed expectations for tax cuts and fiscal stimulus from the Trump administration. US Treasury Secretary Steven Mnuchin indicated on Thursday that the Trump administration is close to bringing forward a major tax reform plan ‘very soon’, regardless of the outcome of a healthcare overhaul bill. The Japanese yen weakened and crude prices rose after four days of losses, further supporting sentiment heading toward the Sunday presidential election in France. The outcome is too close to call, although polls show centrist candidate Emmanuel Macron with a narrow lead. Investors also kept an eye on other developments in France after a French policeman was shot dead in Paris and two others were wounded in a suspected terrorist attack. Japanese shares ended higer as bets that US tax reforms are gaining traction and comments from a Federal Reserve official affirming that three Fed rate hikes this year remain appropriate helped weaken the yen against the dollar. Further, Chinese shares ended marginally higher but posted their worst weekly loss this year on concerns over cooling growth and tightening regulatory scrutiny.
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