GDP Grows At 7%, Market On The Backfoot As Sensex Slips 70 Points

India’s economy expanded by 7 per cent in the third quarter of this financial year, belying fears that note ban would have severely impacted economic activity.

The Central Statistics Office (CSO) has retained the growth projection for the current fiscal at 7.1 per cent, as projected in the first advance estimate in January.

Meanwhile, the CSO has also marginally revised upwards the GDP estimates for the first and the second quarters to 7.2 per cent and 7.4 per cent.

It was feared that demonetisation effected in the middle of the third quarter (November 9, 2016) would have adverse bearing on various segments of the economy.

The Reserve Bank of India and other agencies like IMF and OECD had lowered GDP projections arguing that the note ban would have short-term impact on the Indian economy.

Market remained on the backfoot for the second straight session on Tuesday ahead of release of GDP data as the Sensex slipped another 70 points to 28,743.

Investors waited for the December quarter GDP data to find out if demand took a knock following Prime Minister Narendra Modi’s surprise decision to recall high-value currency notes in November last year.

The growth numbers are scheduled to be released after market hours. The 30-share index, which had lost 80.09 points in the previous session, fell further by 69.56 points or 0.24 per cent to 28,743.32 after shuttling between 28,876.54 and 28,721.12.

The broader NSE Nifty eased by 17.10 points, or 0.19 per cent to close at 8,879.60. It moved between 8,914.75 and 8,867.60 intra-day.

Caution is in the air as market players tracked the much-awaited US President Donald Trump’s address to the Congress later in the day, which can throw light on tax reforms and infrastructure spending.

Another record closing on the Wall Street on Friday and a firm trend in Asia kept mood positive.

Idea Cellular managed to close higher after falling nearly 6.5 per cent in early trade following reports that Providence Equity Partners is likely to exit the telecom firm by selling its 3.33 per cent stake.

However, some action was witnessed in broader markets, with the smallcap index rising by 0.59 per cent and mid-cap 0.14 per cent.

Stocks of automobile companies such as Bajaj Auto, Hero MotoCorp, Maruti Suzuki and Tata Motors saw selling activity and lost up to 1.56 per cent ahead of monthly sales figures for February to be released on Wednesday.

Coal India, NTPC, TCS, ICICI Bank, ITC Ltd, ONGC, Axis Bank, PowerGrid and HDFC were other laggards.

However, buying in select stocks such as Bharti Airtel, Asian Paints, Adani Ports, M&M, Lupin, Sun Pharma, Tata Steel, SBI and Infosys capped the downside.

Foreign capital outflows also affected market sentiment.

Foreign funds net sold shares worth of Rs 145.55 crore yesterday, as per provisional data.

Other Asian markets ended mixed as key indices like Hong Kong and Singapore fell while Japan’s Nikkei and the Shanghai index moved up.

In Europe, London’ FTSE, Paris CAC 40 and Frankfurt lost in their early session.

In the domestic market, 20 scrips out of the 30-share Sensex ended lower.

Oil and gas fell 1.34 per cent, followed by PSU, FMCG, IT and auto. Realty, capital goods, metal and power went up by up to 1.44 per cent.

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