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EQUITY
Post Session: Quick Review
Feb-20-2019

Indian equity benchmarks bounced back and broke 8-day losing streak on Wednesday, helped by metal and oil & gas stocks. Intense buying in late trade helped the markets to end session at day’s highest points, with Senesx settling above crucial 35,750 mark, while Nifty ended just shy of 10,750 mark. It was a strong start for the indices which got a boost on cues from Asian markets as well. Sentiment remained upbeat with Care Ratings’ report that signalling an end to the liquidity crisis that NBFCs have been facing since last September, corporate bond issuances by them have risen by 30% in January, reflecting renewed confidence among both issuers as well as investors. The street was also finding support with the government's statement that the revised Gross Domestic Product (GDP) figures for the demonetisation year was not cooked up and, in fact, the growth rates are likely to go up further due to the GST. On January 31, the government revised the GDP growth rates by 110 basis points (bps) from 7.1% to 8.2% for 2016-17, the year of demonetisation, and by 50 bps from 6.7% to 7.2% for fiscal 2017-18.

Buying got intensified during final hours of trade, as sentiments were buoyed with the Cabinet approved a new electronics policy which aims to create a $400 billion electronic manufacturing ecosystem by 2025 and generate 1 crore jobs in the country. The National Electronics Policy 2019 proposes to boost mobile manufacturing in the country to 1 billion units worth $190 billion of which 600 million units worth $110 billion will be exported from the country. Traders were also encouraged with Union Minister of Commerce & Industry and Civil Aviation, Suresh Prabhu cleared a proposal aiming at simplifying the process of exemptions for Start-ups under Section 56 (2) (viib) of Income Tax Act, which will encourage investments in Start-Ups. Traders even overlooked reports that Foreign Direct Investment (FDI) equity inflows to India from April to December 2018 declined by seven per cent. The latest figures released by the Department for Promotion of Industry and Internal Trade (DPIIT) showed that India managed to attract almost $33.5 billion from April to December 2018.

On the global front, Asian markets ended in green on Wednesday. European markets were trading in green, amid rising hopes the world's two largest economies could soon secure a trade deal to end a protracted dispute. Back home, oil & gas sector stocks ended higher after the government approved new rules for bidding out oil and gas blocks as it reverted back to a two-decade-old system of awarding areas based on exploration work commitment, granted marketing and pricing freedom to yet to be developed discoveries and allowed ONGC to induct private firms in existing fields. Airline stocks such as SpiceJet and InterGlobe Aviation gained after the Directorate General of Civil Aviation (DGCA) data indicating that the domestic air passenger count gone up by 9.10% in the month of January 2019. Domestic airlines flew 125.08 lakh passengers in January 2019, as against 114.65 lakh passengers carried in the same month of last year.

The BSE Sensex ended at 35765.85, up by 413.24 points or 1.17% after trading in a range of 35469.49 and 35797.11. There were 28 stocks advancing against 3 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 1.03%, while Small cap index was up by 0.90%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 3.14%, Basic Materials up by 2.44%, Oil & Gas up by 2.39%, PSU up by 2.04% and Utilities up by 1.97%, while there were no losers on the BSE sectoral front. (Provisional)

The top gainers on the Sensex were Vedanta up by 4.87%, Tata Steel up by 4.27%, ONGC up by 4.14%, NTPC up by 3.15% and Sun Pharma up by 2.33%. (Provisional)
On the flip side, Hero MotoCorp down by 0.54%, Hindustan Unilever down by 0.28% and Indusind Bank down by 0.14% were the top losers. (Provisional)

Meanwhile, in order to incentivize compliance with law and to extend greater Ease of Doing Business, the Union Cabinet has given green signal to the promulgating an ordinance for companies law amendments. A bill to replace the Companies (Amendment) Ordinance, 2018, that was promulgated in November could not be passed during the last session of the current Parliament. Hence, the government has decided to promulgate the Companies (Second Amendment) Ordinance, 2019.

The amendments have been brought in to address the need to impose civil liability for technical and procedural defaults of a minor nature. Further, the changes have been made to plug gaps in the corporate governance and enforcement framework covering a wide range of issues. As many as 16 minor offences have been re-categorised as ‘purely civil defaults’ which would help de-clog special courts.

Besides, certain routine functions from the National Company Law Tribunal (NCLT) would be transferred to the central government. These include dealing with applications for change of financial year and conversion from public to private companies. A total of 29 sections were amended and two new sections were inserted through the earlier ordinances, which were promulgated on November 2, 2018 (Ordinance 9 of 2018) and on January 12, 2019 (Ordinance 3 of 2019).

The CNX Nifty ended at 10746.15, up by 141.80 points or 1.34% after trading in a range of 10646.40 and 10752.70. There were 45 stocks advancing against 4 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing Finance up by 5.91%, Vedanta up by 4.77%, Tata Steel up by 4.55%, Adani Ports &SEZ up by 4.30% and ONGC up by 3.99%. (Provisional)

On the flip side, Hero MotoCorp down by 0.41%, Dr. Reddys Lab down by 0.38%, Zee Entertainment down by 0.29% and Hindustan Unilever down by 0.10% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 6.37 points or 0.09% to 7,185.54, France’s CAC added 4.06 points or 0.08% to 5,164.58 and Germany’s DAX was up by 41.82 points or 0.37% to 11,351.03.

Asian markets ended in green on Wednesday, with encouraging US earnings and hopes for a US-China trade deal boosting sentiment. Chinese shares closed higher after US President Donald Trump told reporters the US-China trade talks are ‘going very well’ and added that an early March deadline to reach a deal could be postponed. Trump claimed China is ‘trying to move fast’ so that an increase in tariffs on Chinese goods currently set to take effect does not happen. Further, Japanese shares hit fresh nine-week high, with automakers and heavyweight SoftBank Group pacing the gainers despite the release of weak exports data. Report showed exports in Japan fell the most in more than two years in January as machinery goods orders fell sharply.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,761.22
5.57
0.20

Hang Seng

28,514.05
285.92
1.01

Jakarta Composite

6,512.78
18.11
0.28

KLSE Composite

1,726.18

19.62

1.15

Nikkei 225

21,431.49
128.84
0.60

Straits Times

3,278.38
18.58
0.57

KOSPI Composite

2,229.76
24.13
1.09

Taiwan Weighted

10,272.46
120.20
1.18


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