Post Session: Quick Review

It was a disappointing day of trade for the Indian markets when the benchmarks after a positive start followed by a surge to highest point of the day, slumped to close modestly in red. There were mild recovery attempts in the final hours but they were sold off quickly and BSE Sensex after crossing the 28,000-mark in the opening hours, slipped more than 200 points intraday as investors started booking profit on previous rises. Nifty too lost ground after reclaiming its 8500 bastion.  Some concern grew in the market with global rating agency Moody's Investors Service cut its forecast for India’s economic growth to around 7 percent this year from 7.5 percent because of lower-than-expected rainfall in the ongoing monsoon season. Though, the rating agency maintained its forecast of around 7.5 percent increase in gross domestic product (GDP) for 2016, but pointed to risks ahead that include delays in the government’s reform plans. It also said that economic activity will continue to strengthen on the back of a gradual implementation of reforms that foster domestic and foreign investment. Meanwhile, to check money laundering through stock markets, top stock exchange BSE has asked its members to report on a monthly basis details of the STRs (Suspicious Transaction Reports) submitted to the government's Financial Intelligence Unit (FIU). BSE has also asked members to report the cumulative number of STRs filed with the FIU as on March 31, 2015.

On the global front, while the US markets bounced back from the lows of the day, most of the Asian markets witnessed sell-off, as Chinese shares slumped again. China’s currency weakened even though the People’s Bank of China kept its reference rate for the yuan relatively stable. Meanwhile, the Chinese cities where home prices rose, exceeded those where they declined for the first time in 16 months in July. The European markets made a modestly higher start after German Chancellor Angela Merkel said she’s confident the International Monetary Fund will join Greece’s third bailout and signaled willingness to consider debt relief to help make it happen.

Back home, there was profit taking in some blue-chips and PSU banking stocks that led the markets lower for the day. Weakness in the regional peers too weighed down the sentiments, with Chinese Shanghai Composite plunging by over 6 percent. Traders even overlooked the report that India and the United Arab Emirates (UAE) agreed that the investment institutions of UAE will strive to raise their investments in India by setting up UAE-India Infrastructure Investment Fund. The infrastructure fund aims to finance infrastructure development in India and will target a corpus of $75 billion. Though, the trade turned choppy in the second half but the Coffee stocks kept buzzing on a report that the government is weighing foreign direct investment in plantation sector. A proposal to this effect is under consultation of the commerce and industry ministry. The move will bring in foreign players with efficient technology, and ramp up coffee production in the country, thereby boosting India's coffee exports. Tata Coffee surged by around 7 percent, CCL Products rose nearly 4 per cent, Tata Global Beverages was higher by over 2 percent, while Mcleod Russel India was up by around half a percent. On the other hand some of the power companies came under pressure on a report of CAG that there is scope for bringing down electricity tariffs in the national capital. The observation was made by the CAG in a report in which it stated that power discoms in Delhi had inflated their dues to be recovered from consumers by almost Rs 8,000 crore. Reliance Infrastructure was down by over a percent, while Tata Power ended lower by about a percent.

The BSE Sensex ended at 27838.05, down by 40.22 points or 0.14% after trading in a range of 27747.40 and 28040.73. There were 7 stocks on gainers side against 23 stocks on the decliners side on the index. (Provisional)

The broader indices outperforming the benchmarks ended in green; the BSE Mid cap index was up by 0.38%, while Small cap index surged by 0.86%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.61%, Consumer Durables up by 1.22%, TECK up by 0.93%, Capital Goods up by 0.74%, Auto up by 0.60%, while Metal down by 2.03%, PSU down by 0.55%, INFRA down by 0.55%, Realty down by 0.37% and Power down by 0.23% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 2.04%, Tata Steel up by 2.03%, SBI up by 1.92%, TCS up by 1.91% and Infosys up by 1.79%. On the flip side, GAIL India down by 4.60%, Coal India down by 4.38%, Cipla down by 2.81%, Vedanta down by 2.28% and Lupin down by 2.14% were the top losers. (Provisional)

Meanwhile, inviting investor from United Arab Emirates (UAE), Prime Minister Narendra Modi has said that India has an investment opportunity of $1 trillion, in sectors like infrastructure, energy, real estate etc., and urged UAE’s businessmen to come to invest in India and together make the 21st century ‘Asia’s Century’. Modi further stated that his government would take all necessary steps to address concerns of the businessmen from UAE and erase “deficit of 34 years”, he also assured to send commerce Ministry to try and find solutions to the problems faced by some UAE investors. He also stated that his government has got some problems in legacy and his immediate priority would be to kickstart the things which were stalled by the 'indecisiveness and lethargy' of the past governments.

Besides, Prime Minister has said all major global institutions agree that India is the world’s fastest growing economy and it has enormous development potential. He also said that UAE’s power and India’s potential can make the dream of an Asian Century a reality. Furthermore, He pointed several sectors including insurance, railways, defence manufacturing that have been opened up for foreign investment in India.

UAE’s investors have said they want steps like single window clearance and cited cumbersome and complex processes for doing business in India. Furthermore, they underlined the government needs to be a strategic partner to create a conducive business environment for the investors who need safety of their investments. To these, Modi assured that these problems will be resolved. The issue assumes significance as a number of investors, including some from the Middle-East region; have in the past faced problems on account of taxation and policy related issues.

Listing out investment areas, Modi highlighted that India needs technology, speed and quality construction when it comes to housing. Low-cost housing is very important for Indian.  In the agriculture sector, India needs cold storage network and warehousing network where UAE businesses have another advantage.

The CNX Nifty ended at 8466.25, down by 11.05 points or 0.13% after trading in a range of 8433.60 and 8525.75. There were 19 stocks in green against 31 stocks in red on the index.(Provisional)

The top gainers on Nifty were BPCL up by 3.57%, Tata Steel up by 2.29%, TCS up by 2.22%, Maruti Suzuki up by 2.16% and Tech Mahindra up by 2.09%. On the flip side, GAIL India down by 4.56%, Coal India down by 4.28%, NMDC down by 3.74%, Cairn India down by 2.69% and Cipla down by 2.60% were the top losers.(Provisional)

European markets after a green start have given up their gains, UK’s FTSE 100 declined by 37.3 points or 0.57% to 6,513.00, Germany’s DAX lost 22.21 points or 0.2% to 10,918.12 and France’s CAC was lower by 20.54 points or 0.41% to 4,964.29.

The Asian markets closed mostly in red on Tuesday, with Shanghai Composite dropping more than 6% as investors appeared to show a delayed reaction to news that China’s market regulator would allow market forces to play a greater role in determining stock prices. Chinese home prices rose in July for a third consecutive month, fuelled by improved sales and market sentiment, suggesting the property market is slowly recovering in a rare counterpoint to a growing list of grim economic indicators. Average new home prices rose 0.3 percent in July versus June slightly slower than June’s 0.4 percent rise. Even a mild recovery in one of the country’s key sectors would provide a valuable boost for an economy heading towards its weakest growth in 25 years. Property sales bottomed out during the first half of 2015 after declining for more than a year, propped up by a barrage of government support measures since last September, including a series of interest rate cuts and lower down payment requirements. Indonesia posted a surprisingly large trade surplus in July at $1.33 billion from a revised $528 million in June. Exports in July were $11.41 billion, down 19.23 percent from a year earlier, while imports were $10.08 billion, down 28.44 percent.