Post Session: Quick Review

Indian markets showed consolidation on Friday after posting big gains in the previous session, the benchmarks after giving up their early gains kept gyrating near the neutral line, moving in and out for most part of the day. Some bounce back was seen in the latter part of the day but it got sold out, with traders opting a cautious approach ahead of the weekend, still benchmarks managed to end the session in green. In early trade markets got a boost with government's move to introduce a composite foreign investment cap by clubbing all forms of overseas investments to define sectoral limits. And also on the Asian Development Bank (ADB) retaining its India GDP growth projection for 2015-16 at 7.8 percent in its supplement to the Asian Development Outlook (ADO) 2015, even though it cautioned that delay in reforms relating to land acquisition and GST could hamper growth. But markets lost their ground on some scrip specific selling in financial and auto. Also, once again there was some cautiousness emanating from Greece, with IMF Managing Director Christine Lagarde stating that the institution will participate in the third bailout only if the program is 'complete', adding that Greek plan is 'categorically' not viable and the country is in need of a debt reduction.

On the global front, after the surge in US markets, the Asian markets followed the trend and most of them ended higher with Chinese markets once again surging by over three percent after a report that banks pledged $322 billion to support equities. The Japanese markets too after dilly-dallying ended with modest gains. The European equity gauges made a modestly green start, heading for the first weekly advance this month. Meanwhile, German lawmakers will pass their verdict on Greece’s bailout package later today, if approved it will pave the way for creditors to start talks with Greece.

Back home, the mildly volatile session of trade finally ended on a positive note, with traders coming into holiday mood ahead of festival Eid. The trade turned cautious with IMD releasing its latest data that the monsoon rain was 6 per cent below normal. Though, it said a larger part of the country received excess/normal rainfall from June 1 to July 15.  In that period, the country received 280 mm of rainfall as compared to normal precipitation of 298.9 mm, 6% less than the normal limit. All regions in the country, except Northwest India-- which has recorded 12% more rainfall than its normal limit--,witnessed deficient rainfall. Back on street, the broader markets though outperformed the benchmarks, some of the sectoral indices witnessed profit taking and ended with losses. On the other hand IT, tech, power and healthcare sector extended their jubilation, while banking pack which was the major participant of last session’s rally, remained in somber mood from the very beginning with most of the stocks ending in red following reports the government's decision to move to a composite foreign investment cap for various sectors, will not benefit banking sector.

The BSE Sensex ended at 28463.31, up by 17.19 points or 0.06% after trading in a range of 28417.46 and 28576.32. There were 19 stocks on gainers side against 11 stocks on the decliners side on the index. (Provisional)

The broader indices outperformed the benchmarks; the BSE Mid cap index was up by 0.20%, while Small cap index ended up by 0.44%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.92%, TECK up by 0.99%, Power up by 0.96%, IT up by 0.93%, FMCG up by 0.67%, while Realty down by 0.50%, Metal down by 0.45%, Bankex down by 0.38%, PSU down by 0.24%, Oil & Gas down by 0.01% were the losing indices on BSE.(Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 1.88%, BHEL up by 1.59%, Lupin up by 1.54%, Infosys up by 1.53% and ITC up by 1.38%. On the flip side, HDFC down by 2.32%, Coal India down by 1.62%, Axis Bank down by 1.26%, Hindustan Unilever down by 1.07% and Wipro down by 0.57% were the top losers.(Provisional)

Meanwhile, following recommendation made by the Technical Committee on Facilities and Services to the Exporters, chaired by Shri G. Padmanabhan, the Reserve Bank India (RBI) has allowed banks to factor export receivables on a non-recourse basis, so as to enable exporters to improve their cash flow and meet their working capital requirements.

RBI in its notification has said that Authorised Dealer Category - I (AD Category- I) banks may take their own business decision to enter into export factoring arrangement on non-recourse basis. They should ensure that their client is not over financed. Accordingly, they may determine the working capital requirement of their clients taking into account the value of the invoices purchased for factoring. The invoices purchased should represent genuine trade invoices.

It further stated that in case the export financing has not been done by the Export Factor, it may pass on the net value to the financing bank/institution after realising the export proceeds. Additionally, AD bank, being the Export Factor, should have an arrangement with the Import Factor for credit evaluation and collection of payment

The banking regulator added that  after factoring, the Export Factor may close the export bills and report the same in the Export Data Processing and Monitoring System (EDPMS) of the Reserve Bank of India. In case of single factor, not involving Import Factor overseas, the Export Factor may obtain credit evaluation details from the correspondent bank abroad.  KYC and due diligence on the exporter shall be ensured by the Export Factor.

The CNX Nifty ended at 8613.85, up by 5.80 points or 0.07% after trading in a range of 8593.15 and 8642.95. 32 stocks ended in green against 16 stocks in red, while 2 stocks remained unchanged on the index.(Provisional)

The top gainers on Nifty were Tech Mahindra up by 1.98%, Mahindra & Mahindra up by 1.82%, ITC up by 1.81%, BHEL up by 1.61% and Ultratech Cement up by 1.42%. On the flip side, Asian Paints down by 2.74%, HDFC down by 2.34%, Coal India down by 1.54%, Ambuja Cement down by 1.42% and Axis Bank down by 1.26% were the top losers.(Provisional)

European Markets were trading mixed; France’s CAC was up by 10.53 points or 0.21% to 5,132.03, while Germany’s DAX decreased 21.81 points or 0.19% to 11,694.95 and UK’s FTSE 100 was down by 9.97 points or 0.15% to 6,786.48.

Asian markets closed mostly in green on Friday, while markets in many regional trading centers were closed today to mark the ‘Eid’ holidays, including Singapore, Malaysia and Indonesia. Japan will set aside roughly $32 billion in next fiscal year’s state budget for measures to boost the economy’s productivity, underscoring Prime Minister Shinzo Abe’s resolve to end nearly two decades of deflation. The move will be part of Abe’s strategy to lift Japan's long-term growth potential and reflate the economy so that expected rises in tax revenue will help rein in the country’s massive public debt. Indonesia’s central bank governor stated that the country’s rupiah currency is slightly weaker than it should be. He added that at this time the rupiah is slightly undervalued. The rupiah is one of emerging Asia’s worst-performing currencies this year having lost about 7 percent.