Post Session: Quick Review

The Indian markets shrugging off the muted global trend reversed intraday losses to post decent gains on Wednesday, on the back of fresh buying in beaten down bluechips. BSE Sensex was up over 100 points, while the 50-share Nifty reclaimed its crucial psychological level of 8,500 intraday. Equity trade got supported with rupee wiping off its initial losses due to fresh capital inflows and on the back of dollar's weakness against other currencies overseas. Earlier rupee after a day of break depreciated to hit a fresh two-year low against dollar. Rate sensitives overlooked Finance Minister Arun Jaitley’s statement, who making a case for interest rate cut stating that RBI will take note of the declining inflation and take a decision accordingly.

Global trends remained weak, while the US markets made modestly lower closing overnight after weak numbers from retail giant Wal Mart, the Asian markets too ended mostly in red, though the most significant was the sudden slump in the Chinese market and its subsequent recovery on expectations of fresh government support. Later the European markets too made a soft start on concern that the selloff in emerging markets is spreading. Meanwhile, the German parliament appeared set to back a third bailout for Greece after Chancellor Angela Merkel lobbied lawmakers in a bid to stem a revolt within her caucus against the aid package.

Back home, markets though recovered in early trade and scaled intraday high, but witnessed a choppy trade till last, with benchmarks paring some of the gains by the end. The local markets got major boost with Chinese stocks reversing sharp declines to end higher after the central bank injected more funds into the financial system for a second day in a bid to calm panicky markets. On the domestic front it was day of sectoral action and the PSU banks that have surged recently on announcement of government’s rejuvenation plan ‘rainbow’, turned the biggest loser on profit taking. Allahabad Bank, Canara Bank, Bank of Baroda, Union Bank, Andhra Bank, State Bank of India and Punjab National Bank, all ended with sharp cuts in range of 2-5%. The Coffee stocks that moved higher in last session, witnessed profit taking after the government said there was no “immediate plan” to permit foreign direct investment in the country's coffee and rubber plantation sector. Tata Coffee was down by 2%, while Tata Global Beverages, Mcleod Russel and CCL all lost around a percent each. On the other hand Pharma sector stocks were in action, after the government assured the pharma industry of “every possible help” in resolving its issues related to exports and said efforts would be made to expedite work on different proposals to realise the full potential of the sector.SPARC moved higher by 8%, Cipla gained 2%, Lupin was up by 2% and Auro Pharma gained 3%.

The BSE Sensex ended at 27944.44, up by 112.90 points or 0.41% after trading in a range of 27721.25 and 28021.39. There were 18 stocks in green against 12 stocks in red on the index. (Provisional)

The broader indices though pared most of the gains but managed to end with touch of green; the BSE Mid cap index was up by 0.01%, while Small cap index ended higher by 0.19%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.22%, IT up by 0.69%, Capital Goods up by 0.44%, TECK up by 0.42%, Auto up by 0.36%, while Metal down by 1.21%, Realty down by 1.16%, PSU down by 1.03%, Bankex down by 0.25%, Oil & Gas down by 0.14% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma Inds. up by 4.40%, Lupin up by 2.56%, Wipro up by 1.87%, Hero MotoCorp up by 1.82% and Cipla up by 1.77%. On the flip side, Hindalco down by 3.25%, SBI down by 2.10%, Coal India down by 1.59%, Axis Bank down by 0.88% and NTPC down by 0.82% were the top losers. (Provisional)

Meanwhile, moving a step further in the policy of improving the ease of doing business in the country, the government will soon finalise three new important laws - the litigation policy, the bankruptcy code and an arbitration law. Finance Minister Arun Jaitley stated that the litigation policy is more or less ready, after being cleared by a small informal group of ministers. The bankruptcy code was to be ready by the end of July and it's going to be ready any of these days. The arbitration law is already cleared by Cabinet and it will be introduced in Parliament. So, all the three are ready.

Jaitley further stated that when legal reforms are involved, it's not merely between the litigant or the industry at one hand and the government on the other, but there is a third agency which is the courts. Therefore, courts not being a part of the legislative process, are only interpreters of the legislative decisions.

India is ranked at 142th position in terms of ease of doing business among the 189 nations that the World Bank ranks. In 2015, of the 10 parameters that the World Bank considers while giving final cumulative rankings, India improved on only one, protecting minority investors, while it came close to the bottom in two categories. It stood a wretched 184th in the category “Dealing with Construction Permits,” and 186th in “Enforcing Contracts.”  According to World Bank getting construction permits in India involved an average of 25 procedures that took 186 days, and cost 28 per cent of the warehouse value. Enforcing contracts took 46 procedures and 1420 days - nearly four years. Getting electricity took 106 days and registering a property took 47 days.

India plans to improve its position in terms of ease of doing business to 50th by 2017.  World Bank President Jim Yong Kim had in July last year said India could jump 50 spots by just implementing the Gujarat model of reforms. According to the World Bank report, the overall ease-of-doing-business ranking tells only part of the story, and so do changes in rankings.

The CNX Nifty ended at 8493.90, up by 27.35 points or 0.32% after trading in a range of 8425.95 and 8520.45. There were 27 stocks on gainers side against 23 stocks on the decliners side on the index. (Provisional)

The top gainers on Nifty were Sun Pharma Inds. up by 4.30%, ACC up by 4.23%, Lupin up by 3.02%, Wipro up by 2.40% and HCL Tech. up by 1.90%. On the flip side, Hindalco down by 3.09%, SBI down by 2.25%, Coal India down by 1.85%, Bank Of Baroda down by 1.83% and PNB down by 1.52% were the top losers. (Provisional)

The European markets were in red, Germany’s DAX declined by 122.41 points or 1.12% to 10,793.51, UK’s FTSE 100 lost 58.63 points or 0.9% to 6,467.66 and France’s CAC was down by 46.62 points or 0.94% to 4,924.63.

The Asian markets closed mostly in red on Wednesday as concerns about the impact of the weaker yuan weighed on the market. Asian lenders are seeing their loan books rapidly deteriorate across the region as China’s slowing economy dampens trade and hurts companies that had borrowed heavily from the banks. China has injected nearly $100 billion from its foreign exchange reserves into two policy banks, which lend based on government directives, to help spur the country’s sluggish economy. The injection suggests the central bank is trying to guide funds to go to the real economy, like exports and infrastructure construction. China’s economy, the world’s second-largest, expanded 7.4 percent last year, its weakest since 1990, and has slowed further this year, growing 7.0 percent in each of the first two quarters.  Japan’s export growth slowed in July on reduced shipments of cars and electronics to Asia in a sign that the global demand outlook may be losing its luster. The 7.6 percent annual increase in exports in July was bigger than the median estimate for 5.5 percent annual growth expected, but still slower than June’s robust 9.5 percent year-on-year rise. Slowing export growth in July suggests overseas demand in third quarter may not be strong enough to help Japan’s gross domestic product recover from an annualized 1.6 percent contraction in April-June as exports slumped and consumers cut back spending, raising questions about the need for more official economic stimulus. Japan’s All Industries Activity Index rose to a seasonally adjusted 0.3%, from -0.5% in the preceding month.