HL: Markets end red on fourth day in a row

Markets today ended on a negative note as it reacted to President Trump’s proposed policy on imposing a duty on steel and aluminum with S&P BSE Sensex Metal indices losing more than 3.30%. The S&P BSE Sensex dropped 300 points while the Nifty lost 99.50 points at the end of day’s trading.

“The week started on a weak note as key benchmark indices in India opened the day in negative territory and continued to witness selling pressure, through the day. Investors' sentiment was hit after a private survey showed a deterioration in India's services sector last month. Weakness in global stocks gave further fillip to the lackluster domestic sentiment as investors digested the latest growth forecast for China and remained to vary over uncertain Italian election results”, said Karthikraj Lakshmanan, Senior Fund Manager-Equities at BNP Paribas Mutual Fund.

The BSE Sensex dropped 0.88% to close at 33,746.78 while the Nifty concluded at 10,358.85 losing 0.95% at the end of the trading session.

SunPharma, TC, Tech Mahindra, NTPC, and UPL were among the top gainers and Tata Motors, Hindalco Industries Limited, Aurobindo Pharma, Tata Steel and Bajaj Auto were among major losers. The BSE Midcap lost 0.95% to conclude at 16,442.89 and the BSE Smallcap ended at 18,077.69 to conclude the day’s session 1.09% lower.

“The seasonally adjusted Nikkei India services purchasing managers' index (PMI) dropped to 47.8 in February, from 51.7 in January, indicating a deterioration in India’s services sector. It is also important to note that 50 is considered to be the dividing line between growth and contraction”, added Karthikraj Lakshmanan.

Metal, Oil and Gas, Auto, Telecom, industrials, Energy and Basic Materials are among major sectors which witnessed drop and the S&P BSE Metals sector witnessed a fall of 3.30%. The drop was against the news of proposed hike in a tariff of steel by 25% and aluminum by 10%  by President Donald Trump. According to Mr. Lakshmanan, the resumption of the Budget session of the parliament contributed to the volatility in the markets.

 At the end of the trading session, the net value pulled out by the foreign investors was Rs 366.6 Cr while the net value withdrawn by the domestic investors was Rs 154.2  Cr. The pull out by the Foreign Institutional Investor (FII) for the month of February is almost Rs. 12,500 cr.

Among the global markets, Shanghai Composite closed positive while Hang Seng and Nikkei closed green, at the time of writing this piece FTSE 100  was trading green and DAX was trading red.

Meanwhile, among in the precious metal section, gold gained 0.17% to close at Rs 30,499. At the end of the day, the yield on 10-year benchmark Government securities was 7.7762 and crude oil prices gained 0.20% to end at Rs. 4,003.

“After witnessing better than expected GDP data for Q3FY18, domestically, the focus of the markets in immediate near term will be on passage of Budget in parliament session, GST council meeting and implementation of e-way bill as well as advance tax collection figures by mid-March”, said Teena Virmani, Vice President – Research at Kotak Securities Ltd. The data released by the Central Statistics Office (CSO) show 7.2% of growth in Q3 (Oct-Dec). This makes India the fastest growing economy in the World overtaking China. The GDP growth estimate for 2017-18 has been revised upwards to 6.6% from 6.5% in January 2018.