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Post Session: Quick Review
Feb-19-2019

Benchmark indices ended lower on Tuesday due to selling witnessed in IT and TECK stocks. However, key indices witnessed a positive opening, as traders were taking encouragement with the Reserve Bank of India (RBI) in its board meeting on February 18 deciding to transfer Rs 28,000 crore as interim dividend to the government for the period of July to December 2018. The interim surplus has been decided after a limited audit review and after applying the Economic Capital Framework. Adding to the optimism, the RBI said it would inject Rs 12,500 crore into the system through purchase of government securities on February 21 to increase liquidity. The purchase will be made through open market operations (OMOs).

The benchmark indices pared their day's gains and turned negative in late trade, on the back of a surge in global crude oil prices. Traders turned pessimistic with S&P Global Ratings stating that rated Indian corporates are likely to see slowdown in revenue growth over the next 12-24 months. It also said that India's central government elections this year may pose additional risks for Indian corporates. A change of administration may trigger expansionary government spending that pushes up borrowing costs or raises inflation. Traders also took a note of Finance Minister Arun Jaitley’s statement that India needs fewer and mega banks which are strong because in every sense, from borrowing rates to optimum utilisation, the economies of scale as far as banking sector is concerned are of great help.

On the global front, Asian markets ended mixed on Tuesday, while European markets were trading in red, as market participants anxiously waited for details from the latest round of U.S.-China trade talks. Back home, Pharma stocks ended lower despite rating firm India Ratings and Research’s statement that domestic pharmaceutical sector's outlook will remain stable on the back of an expected recovery in margins, improved cash generation and growth in the domestic market.

The BSE Sensex ended at 35339.47, down by 158.97 points or 0.45% after trading in a range of 35287.16 and 35776.04. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index fell 0.52%, while Small cap index was up by 0.29%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.49%, Realty up by 1.40%, Basic Materials up by 0.99%, Capital Goods up by 0.81% and Telecom up by 0.79%, while IT down by 2.02%, TECK down by 1.62%, Power down by 0.31%, Energy down by 0.19% and Utilities down by 0.18% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Vedanta up by 3.07%, Larsen & Toubro up by 1.59%, ONGC up by 1.39%, ICICI Bank up by 1.37% and Mahindra & Mahindra up by 1.35%. (Provisional)

On the flip side, TCS down by 3.11%, Indusind Bank down by 2.51%, Infosys down by 2.07%, NTPC down by 2.01% and Hero MotoCorp down by 1.82% were the top losers. (Provisional)

Meanwhile, in order to increase liquidity into the market, the Reserve Bank of India (RBI) said it would inject Rs 12,500 crore into the system through purchase of government securities on February 21, 2019. The purchase will be made through open market operations (OMOs).

The central bank in its release said based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, it has decided to conduct purchase of government securities under OMOs for an aggregate amount of Rs 125 billion on February 21, 2019.

The eligible participants should submit their offers in electronic format on the RBI core banking solution (E-Kuber) system on February 21. The result of the auction will be announced on the same day and payment to successful participants will be made on the following day. Recently, RBI had injected Rs 20,000 crore into the system through OMOs in January 2019.

OMOs are financial tools to either inject or suck out liquidity from the system. When the liquidity is tight, money is pumped into the market by purchase of government securities. While in the case of surplus, the excess money is sucked out by selling of government bonds.

The CNX Nifty ended at 10600.45, down by 40.50 points or 0.38% after trading in a range of 10585.65 and 10722.85. There were 26 stocks advancing against 24 stocks declining on the index. (Provisional)

The top gainers on Nifty were Vedanta up by 3.21%, Grasim Industries up by 2.79%, BPCL up by 2.24%, Zee Entertainment up by 1.90% and JSW Steel up by 1.76%. (Provisional)

On the flip side, Wipro down by 3.30%, Indusind Bank down by 2.97%, TCS down by 2.96%, Adani Ports &SEZ down by 2.55% and Infosys down by 2.23% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 39.12 points or 0.54% to 7,180.35, France’s CAC fell 19.70 points or 0.38% to 5,148.84 and Germany’s DAX was down by 16.77 points or 0.15% to 11,282.43.

Asian markets ended mixed on Tuesday amid renewed geopolitical and trade tensions after China accused the United States of fueling cybersecurity fears. The Chinese government on Monday accused the US is attempting of trying to curtail its technology development by putting pressure on allies to shun networks supplied by Huawei Technologies. Chinese shares ended on a flat note as investors awaited the outcome of a new round of talks between the United States and China taking place in Washington. Besides, Japanese shares hit fresh two-month highs, with defensive stocks rising as trade talks between the US and China continue in Washington.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,755.65
1.29
0.05

Hang Seng

28,228.13
-118.88
-0.42

Jakarta Composite

6,494.67
-3.15
-0.05

KLSE Composite

1,706.56

13.82

0.82

Nikkei 225

21,302.65
20.80
0.10

Straits Times

3,259.80
-6.17
-0.19

KOSPI Composite

2,205.63
-5.26
-0.24

Taiwan Weighted

10,152.26
6.98
0.07
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