Post Session: Quick Review

The Indian markets after making a positive start completely lost the momentum and ended lower by about half a percent on Monday. The local markets that were looking in full command bucking the global trend, witnessed sudden sharp sell-off in the final hours that dragged the markets in red. Traders were concerned about the political logjam in the parliament, as both the houses were adjourned once again and it was announced that Joint committee report on Land Bill will be tabled in winter session of Parliament, with Just four more working days left in the ongoing monsoon session of Parliament. Traders got concerned for the fate of GST Bill, meanwhile Finance Minister Arun Jaitley said that governments spending more than their means could lead to capital flight and loss in value of currency. Markets overlooked, Union Minister of State for Labour Bandaru Dattatreya’s statement, expressing confidence that the process of investment in equities by Employees Provident Fund Organisation (EPFO), would give higher returns with the investments by EPFO being made with a long-term perspective.

On the global front, the Asian markets showed a mixed trend and some of the indices ended in red after Chinese data highlighted a deepening slowdown in demand in the world's industrial powerhouse, though the Chinese market itself ended in green on hopes of more stimulus measures. The Japanese market too ended in green, despite nation’s consumer confidence tumbling in July to the lowest in six months, raising the risk of weakness in spending that could weigh on the economy this quarter. The European markets too made a weak start led by decline in banks and energy shares, as US payrolls data fueled bets the Federal Reserve will raise rates this year.

Back home, markets turned a bit choppy in the second half after the weak opening of the European markets and Nifty that had reclaimed its 8600 level in early deals and was heading towards its highest close in last three weeks, suddenly took a u-turn and turned for the worst to end near day’s low, due to profit taking in metals, oil & gas and power sector stocks. Oil stocks especially PSU oil marketing companies that have been gaining on slump in international crude prices, turned lower after oil minister Dharmendra Pradhan stated that the government has capped the subsidy payout on kerosene at Rs 12 per litre and domestic cooking gas (LPG) at Rs 18 per kg. There is under-recovery of Rs 14.95 per litre for kerosene and Rs 167.18 on sale of every 14.2-kg subsidised LPG cylinder. The non sectoral gauge of sugar continued to remain in action despite the turnaround in the market after Commerce Minister Nirmala Sitharaman said that the government is trying to talk to different countries for clearing accumulated sugar produced in India, Shree Renuka Sugars and Bajaj Hindusthan ended up by around 2%, while EID Parry ended higher by over a percent.

The BSE Sensex ended at 28101.72, down by 134.67 points or 0.48% after trading in a range of 28017.85 and 28417.59. There were just 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices too lost their pace and ended in red; the BSE Mid cap index was down by 0.02%, while Small cap index lost 0.41%.(Provisional)

The gaining sectoral index on the BSE was Realty up by 0.83%, while INFRA down by 1.08%, Metal down by 1.04%, Oil & Gas down by 0.94%, Consumer Durables down by 0.92%, PSU down by 0.88% were the top losing indices on BSE.(Provisional)

The top gainers on the Sensex were BHEL up by 1.79%, Hero MotoCorp up by 1.24%, Maruti Suzuki up by 1.08%, Bajaj Auto up by 0.87% and SBI up by 0.60%. On the flip side, ONGC down by 2.76%, Tata Motors down by 2.48%, Mahindra & Mahindra down by 2.35%, Hindalco down by 1.92% and Vedanta down by 1.89% were the top losers.(Provisional)

Meanwhile, a CII ASCON survey that tracks the growth of industrial and services sectors, in its poll for the April-June quarter, based on responses collected from sectoral industry associations, has revealed a slight improvement in growth trends in production over the year-ago period. It has said that the economy is showing signs of a turnaround, albeit moderately, on the back of continued policy actions, implementation and enhanced business and consumer confidence.

The CII ASCON survey which tracks the Industry performance based on the feedback received from and affiliated associations of CII, industry divisions representing about 3500 companies, has shown growth improvement both on a quarter on quarter and a year-on-year basis. Responses were segregated in four broad categories - Excellent (growth in excess of 20%); High (growth in the range of 10-20%); Moderate (0-10%) and Negative (less than 0%). Accordingly, the share of sectors recording excellent growth of around 20 per cent in the latest quarter has surged up to 16.1 per cent against 7.1 per cent recorded in the year-ago period. Though, the share of sectors witnessing a high growth rate of 10 to 20 per cent has reduced significantly to 9.7 per cent in the same period from 14.3 per cent last year.

Also, the share of sectors reporting moderate growth has declined marginally to 51.7% as compared to 51.8% in the year-ago period. Moreover, the number of sectors recording negative growth has fallen from 26.9% in the first quarter last year to 23.6% this year.

The industry associations which participated in the poll encompass wide range of sectors comprising of small, medium and large enterprises. In most of the cases, these account for approximately 70% of the total industry output in respective sectors.

The survey's respondents have expressed their optimism in a further improvement in the near-term growth outlook helped by continued policy actions, implementation and enhanced business and consumer confidence.

The CNX Nifty ended at 8502.90, down by 61.70 points or 0.72% after trading in a range of 8497.80 and 8621.55. There were 13 stocks on gainers side against 37 stocks on the losers side on the index.(Provisional)

The top gainers on Nifty were BHEL up by 2.12%, Hero MotoCorp up by 1.43%, Maruti Suzuki up by 1.06%, TCS up by 0.94% and Bajaj Auto up by 0.85%. On the flip side, ONGC down by 3.13%, Mahindra & Mahindra down by 2.61%, Tata Motors down by 2.59%, Hindalco down by 2.33% and Cairn India down by 2.28% were the top losers.(Provisional)

European Markets were trading mixed, France’s CAC was up by 3.73 points or 0.07% to 5,158.48, Germany’s DAX increased by 11.77 points or 0.1% to 11,502.60, while the UK’s FTSE 100 lost 58.73 points or 0.87% to 6,659.76.

The Asian markets closed mostly in red on Monday, while Shanghai Composite closed in green on expectations Beijing will maintain its market support by buying shares. Producer prices in China fell to a near six-year low in July while consumer inflation remained subdued, signaling the world’s second-largest economy was still facing deflationary pressures and that Beijing has room to further support the sluggish economy. The producer price index (PPI) fell 5.4 percent from a year earlier, compared with an expected 5.0 percent decline. It was the worst reading since October 2009 and the 40th straight month of price falls. Chinese CPI rose to an annual rate of 1.6%, from 1.4% in the preceding month. Chinese Trade Balance fell to 43.03B, from 46.54B in the preceding month. Japan’s Bank Lending rose to a seasonally adjusted annual rate of 2.6%, from 2.5% in the preceding quarter. Japan’s Current Account rose to a seasonally adjusted 1.30T, from 1.64T in the preceding month.