After opening the day in the green, share markets in India witnessed positive trading activity, tracking the Karnataka state elections. The markets were decidedly positive in the morning session as the polls showed a decisive BJP victory. However, they soon gave away a 400-point gain as the Congress and allies chipped away at the BJP seats. Volatile election activity meant the stock markets closed the day flat. Sectoral indices were mixed, with stocks in the IT sector and stocks in the metal sector leading the gains, while stocks in the realty sector lost the most.
At the closing bell, the BSE Sensex stood lower by 13 points (down 0.1%) and the NSE Nifty closed lower by 5 points (down 0.1%). The BSE Mid Cap index ended the day down 0.8%, while the BSE Small Cap index ended the day down by 0.7%.
Asian stock markets finished mixed. As of the most recent closing prices, the Hang Seng was down by 1.2% and the Shanghai Composite was up by 0.6%. The Nikkei 225 was down by 0.2%. Meanwhile, European markets too were trading mixed. The FTSE 100 was up by 0.2%, The DAX, was down by 0.1% while the CAC 40 was up by 0.1%.
The rupee was trading at Rs 67.90 against the US$ in the afternoon session. Oil prices were trading at US$ 71.36 at the time of writing.
In news about the economy, India's GDP is set to grow by 7.7% in the January - March quarter, according to a Nomura report.
According to the Japanese financial services major, despite the moderation in March, industrial production growth averaged 6.2% in the January-March period, up from 5.9% in the previous quarter.
According to official data, industrial output growth fell to a five-month low of 4.4% in March due to decline in capital goods production and deceleration in mining activity and power generation. The report states that the uptick in industrial growth is an indicator for recovery in the economy. The report further noted that India is expected to witness cyclical recovery led by both investment and consumption. However, factors like rising oil prices as well as tighter financial conditions are expected to drag down growth rates.
Industrial growth as measured by the Index of Industrial Production (IIP) in 2017-18 too decelerated to 4.3% from 4.6% in the previous fiscal.
The Indian economy grew 6.6% in the last fiscal as it battled the lingering effects of demonetization in 2016. Teething issues related to the implementation of GST, which hampered operations of small and medium-sized enterprises and exporters, also contributed to growth moderation.
GDP Growth Getting Back on Track
Nomura's growth forecast for this period is optimistic compared to that of the Reserve Bank and the International Monetary Fund (IMF) which projected India to grow 7.4%, and Asian Development Bank and Fitch which estimated growth at 7.3% over the financial year.
If the internal bottlenecks are not alleviated, a subdued private investment would put downside pressures on India's potential growth.
India's GDP grew by 7.2% in Q3 FY18. Cement, electricity, coal, and steel, the bedrock of the economy, all witnessed robust growth.
India also surpassed China as the world's fastest-growing economy. Rest assured, we'll keep a close eye on this trend.
Moving on to news from stocks in the steel sector. Tata Steel share price was among the top gainers on the bourses today after the National Company Law Tribunal (NCLT) approved the company's bid for the debt-ridden Bhushan Steel.
The tribunal dismissed a plea filed by the employees of Bhushan Steel opposing Tata Steel's bid and imposed a fine of Rs 100,000. engineering major Lasen &Toubro Ltd, one of the operational creditors of
The Committee of Creditors (CoC) for Bhushan Steel had approved Rs 325 billion deal along with 12.27% equity in Bhushan Steel offered by Tata Steel in March.
The resolution plan also proposes to pay back Bhushan Steel's operational creditors to the extent of Rs 10 billion and another Rs 2 billion on a pro rata basis spread over one year, depending upon the vitality to running the business.
According to the resolution plan, Tata Steel has also proposed to pay arrears of salary due to the employees of Bhushan Steel and ensure a continuation of employment.
Tata Steel was the first to become a successful higher bidder under the Insolvency and Bankruptcy Code. The other resolution applicants in the insolvency process were Bhushan Steel employees and JSW Steel.
Notably, Bhushan Steel was a part of Reserve Bank of India's (RBI) list of twelve companies which it had identified for immediate resolution.
Bhushan Steel's admitted financial debt stood at Rs 560.5 billion as on 1 February 2018,
Following the news, Tata Steel share price ended the day up by 2.3%.
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