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EQUITY
Post Session: Quick Review
Apr-18-2019

Local equity markets took a breather from gains on four straight trading sessions and ended in red zone on Thursday, as investors remained cautious ahead of quarterly results of key bluechips. Domestic indices made a slightly positive start, as traders took some support with report that investments through participatory notes (P-notes) in domestic capital market rose to Rs 78,110 crore at the end of March, amid positive market sentiments. As per the latest SEBI data, the total value of P-note investments in Indian markets -- equity, debt, and derivatives -- stood at Rs 78,110 crore till March-end. But markets soon entered into red terrain, as traders turned cautious with former Reserve Bank of India Governor Raghuram Rajan’s statement that protectionism does not really help preserve jobs and offers little defence against the job-destroying effects of automation and Artificial Intelligence, asserting that industrial and developing nations cannot afford to ignore the democratic reaction from those left behind by globalisation and technological change.

Key indices were hold on to losses in late trade with private report indicating that unemployment rate in India has doubled in eight years to 2018 as 50 lakh lost jobs in last two years beginning with demonetisation in November 2016. Some anxiety also came amid a private report stating that the first quarter of 2019 recorded 110 merger and acquisition deals worth $ 12.5 billion (about Rs 86,500 crore), a 33 per cent fall in value terms as against the year-ago period, due to factors such as global economic conditions and uncertainty around Brexit. However, further fall in the domestic markets got restricted as some optimism remained among the investors with report that the issuance of government-fully serviced bonds (GoI-FSBs) rose to Rs 64,192 crore in the year ended March 2019 as compared to Rs 15,095 crore during the last fiscal. These borrowings are estimated to have accounted for 0.34 percent of GDP for FY19 as compared to 0.09 percent of GDP for FY18.

On the global front, Asian markets ended mostly lower on Thursday, adopted a cautious stance ahead of the Good Friday and Easter holidays. European markets were trading mostly in green, as Eurozone trade surplus increased in February to its highest level in nearly a year. The figures from Eurostat showed that the seasonally adjusted trade surplus rose to EUR 19.5 billion from EUR 17.4 billion in January. The surplus was the biggest since March 2018, when it was EUR 20.4 billion. Back home, steel industry stocks were in focus, with report that steel demand in India is expected to grow above 7 per cent in the current as well as next year. In 2020, the demand is projected to grow 1 per cent to 1,752 MT.

The BSE Sensex ended at 39093.62, down by 182.02 points or 0.46% after trading in a range of 39083.16 and 39487.45. There were 7 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.93%, while Small cap index was down by 1.04%. (Provisional)

The few gaining sectoral indices on the BSE were Energy up by 1.87%, Oil & Gas up by 0.75% and Consumer Durables up by 0.12%, while Realty down by 2.59%, Telecom down by 1.55%, Power down by 1.41%, Metal down by 1.35%, Bankex down by 1.28% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 2.69%, Tata Motors up by 2.10%, Tata Motors - DVR up by 1.71%, Asian Paints up by 0.65% and TCS up by 0.64%. (Provisional)

On the flip side, Yes Bank down by 4.07%, Vedanta down by 3.75%, Indusind Bank down by 3.06%, Tata Steel down by 1.81% and SBI down by 1.73% were the top losers. (Provisional)

Meanwhile, with positive market sentiments, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped to Rs 78,110 crore at the end of March. According to Securities and Exchange Board of India (SEBI) data, total value of P-note investments in Indian markets including equity, debt and derivatives, at March end climbed to Rs 78,110 crore from Rs 73,428 crore at the end of February.

Of the total, P-notes holdings in equities at March-end were at Rs 56,288 crore, while in debts and derivatives were at Rs 20,999 crore and Rs 119 crore respectively. Besides, the quantum of FPI investments via P-notes declined to 2.3% during the period under review from 2.4% in the preceding month. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly after going through a due diligence process.

Prior to this, investment via P-notes were on declining trend as in December it was Rs 79,513 crore then it fell to Rs 75,693 crore in January and Rs 73,428 crore in February. Earlier, in July 2017, SEBI had notified stricter norms stipulating a fee of $1,000 on each instrument to check any misuse for channelising black money. It had also prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes.

The CNX Nifty ended at 11744.25, down by 42.90 points or 0.36% after trading in a range of 11738.50 and 11856.15. There were 17 stocks advancing against 32 stocks declining on the index. (Provisional)

The top gainers on Nifty were Reliance Industries up by 3.07%, JSW Steel up by 2.92%, Tata Motors up by 2.21%, BPCL up by 1.76% and Wipro up by 1.26%. (Provisional)

On the flip side, Indiabulls Housing Finance down by 4.26%, Yes Bank down by 4.07%, Hindalco down by 3.77%, Vedanta down by 3.57% and Zee Entertainment down by 3.22% were the top losers. (Provisional)

European markets were trading mostly in green; France’s CAC increased 20.33 points or 0.37% to 5,583.42 and Germany’s DAX rose 61.01 points or 0.5% to 12,214.08, while UK’s FTSE 100 was down by 7.11 points or 0.1% to 7,464.21.

Asian markets ended mostly lower on Thursday as investors adopted a cautious stance ahead of the Good Friday and Easter holidays. Chinese shares ended lower as investors booked some profits after recent strong gains amid signs of economic stabilization. Further, Japanese shares settled down as treasuries climbed alongside the yen and a Nikkei report said Canon would cut its earnings forecast. Meanwhile, investors looked to signs of progress in US-China trade talks.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

3,250.20
-12.92
-0.40

Hang Seng

29,963.26
-161.42
-0.54

Jakarta Composite

6,507.22
25.68
0.40

KLSE Composite

1,619.73

-1.17

-0.07

Nikkei 225

22,090.12
-187.85
-0.84

Straits Times

3,347.58
-1.06
-0.03

KOSPI Composite

2,213.77
-32.12
-1.43

Taiwan Weighted

10,962.02
-35.24
-0.32



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