Post Session: Quick Review

The Indian markets after a choppy trade finally ended in red on Thursday, consolidating after a splendid rally of last session. Amid the Greece crisis traders opted to take a breather and stayed on sidelines lacking any major cues from the domestic front. Major benchmarks which had slipped in red in very early trade bounced back taking support from Finance Minister Arun Jaitley’s statement that India is no longer satisfied being in the 6 to 8 percent growth. It wants to transcend to another level and aim for 8 to 10 percent growth. Also, with Skymet maintaining a normal monsoon forecast, predicting July rainfall to be 104 percent of Long Period Average. It has also said that July rains may get bumper harvest.  However, the trade remained choppy with no clear picture of Greece crisis in sight and traders took opportunities to book profit at every high points.  

On the global front, while most of the Asian indices ended in green, Chinese market showed its usual volatility and lost another around 4% for the day, a three-month low, despite the nation easing its margin-trading rules along with equity-transaction fees, as regulators failed stanch a sell-off. The European markets made a positive start with a survey showing more Greeks going against the government’s call to vote against creditors’ terms for more aid. Greek Prime Minister Alexis Tsipras has written to international creditors saying Greece could accept their last bailout offer if some conditions were changed. Meanwhile, in Frankfurt, the European Central Bank maintained its emergency support for Greek lenders following Greece’s failure to repay $1.7 billion to the IMF.

Back home, the volatility increased in the second half of the trade, finally dragging the markets in red, selling intensified in the last moments , which dragged the benchmarks from their crucial psychological levels of 28000 (Sensex) and 8450 (Nifty). The broader markets managed to retain their gains and the BSE Midcap and Small cap indices both ended with gains of about half a percent each. On sectoral front Oil & Gas, auto and tech stocks along with FMCG and banking managed to make a green close, while rest others ended in red. FMCG pack was strengthened by the surge in Nestle India stocks after UK Food Standards Agency (FSA) gave a clean chit to Nestle for Maggi manufactured in India saying levels of lead in the product are well within the EU permissible levels. Banking stocks which seemed extending their last session jubilation after Minister of State for Finance Jayant Sinha said the government is currently examining the funds requirement of public sector banks over the next 3 years and promised required capital support as part of a comprehensive package to strengthen them, too lost their way and ended flat. There was some buzz in the non sectoral gauge of agriculture after the Union Cabinet approved the Pradhan Mantri Krishi Sinchayi Yojana and a National Policy for Skill Development & Entrepreneur ship. Through the Rs 50,000 crore Krishi Sinchai Yojana, the government over the next five years will focus on improving irrigation in non rain-fed areas as well as strive to improve water efficiency through the country. Jain Irrigation was up by about 5%, Shakti Pumps was up by 2%, Finolex Industries surged by over 8% and Raj Irrigation Pipes was up by around 2%.

The BSE Sensex ended at 27945.80, down by 75.07 points or 0.27% after trading in a range of 27906.35 and 28115.96. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices outperforming the benchmarks ended in green; the BSE Mid cap index was up by 0.49%, while Small cap index added 0.57%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.86%, Auto up by 0.44%, TECK up by 0.30%, FMCG up by 0.28%, PSU up by 0.11%, while Metal down by 0.62%, IT down by 0.41%, INFRA down by 0.34%, Realty down by 0.19%, Capital Goods down by 0.13% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 2.00%, Bharti Airtel up by 1.74%, Bajaj Auto up by 1.68%, Hero MotoCorp up by 0.75% and Axis Bank up by 0.56%. On the flip side, Tata Motors down by 1.98%, Hindalco down by 1.72%, Cipla down by 1.29%, ONGC down by 1.18% and Vedanta down by 1.11% were the top losers. (Provisional)

Meanwhile, global rating agency Fitch lowered India's economic growth projections to 7.8 percent for the current fiscal from 8 percent on pickup in demand and said that the country’s business environment is relatively weak compared with peers and will take time to turn around. In its Global Growth Outlook report, it said that Fitch continues to expect an acceleration in Indian growth, but there are some indications that it may be somewhat slower than previously expected.

In its report the rating agency has cited that capital expenditure has not yet picked up, rural and export demand is weak, and the translation of monetary policy loosening into lower bank lending rates is limited. Downside risks to growth relate, for instance, to below-average rainfall during this year’s monsoon season, although the first three weeks of June recorded 16 per cent above-average rainfall.

Though, the rating agency maintained the expectation for an increase in growth, it lowered its real GDP growth forecasts for India to 7.8 percent and 8.1 percent from 8.0 percent and 8.3 percent for FY16 and FY17, respectively. It said that India’s GDP growth will surpass China’s this year for the first time since 1999, and accelerate to 8 per cent in 2016 and 8.1 per cent in 2017 before settling back to 8.0 per cent in 2017-18. It added that “The implementation of structural reforms and resulting pick-up in investment remain key themes for India's growth outlook, and recent data confirm the strengthening demand.”

Regarding global economy, it said that emerging Asia will continue to experience relatively high rates of growth over the medium term as economic prospects remain starkly divergent across emerging markets. It expects that growth should improve steadily through to 2017 for emerging Asia excluding China on aggregate.

The CNX Nifty ended at 8444.90, down by 8.15 points or 0.10% after trading in a range of 8433.20 and 8479.25. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bosch up by 4.43%, Idea Cellular up by 2.10%, Bharti Airtel up by 2.05%, Mahindra & Mahindra up by 1.98% and Kotak Mahindra Bank up by 1.92%. On the flip side, Tata Motors down by 1.82%, Hindalco down by 1.77%, Tech Mahindra down by 1.41%, Vedanta down by 1.39% and Cipla down by 1.35% were the top losers. (Provisional)

European Markets after a positive start were trading mixed, UK’s FTSE 100 was up by 4.18 points or 0.06% to 6,612.77, while Germany’s DAX declined by 10.49 points or 0.09% to 11,170.01and France’s CAC was down by 6.77 points or 0.14% to 4,876.42.

Asian markets closed mostly in green on Thursday, while Shanghai stocks closed lower after another volatile day despite regulators relaxing margin trading rules. The World Bank urged China to accelerate reform of its state-dominated financial sector, warning that failure to address the issue could end three decades of stellar performance for the world’s second-largest economy. A quarterly survey of Bank of Japan showed that more Japanese households feel they are better off than a year ago and are spending more in anticipation that their income will rise, in a sign that improved consumption will underpin a moderate economic recovery. An index measuring households’ sentiment concerning current economic conditions improved for two straight quarters in June, with more than half of the respondents citing rising family income. The upbeat mood came despite rising living costs and expectations of higher prices ahead. Japan’s Monetary Base fell to 34.2%, from 35.6% in the preceding month. Credit ratings agency Moody’s reported that South Korean banks were at risk from a growing number of so-called marginal companies with an extremely high debt burden at a time of worsening profitability in key sectors.