Post Session: Quick Review

The last day of the month characterized the nature of the whole month, with markets witnessing volatility throughout ahead of the quarterly GDP data. April-June gross domestic product data which is due to be announced after the market hours are likely to come at 7.4 per cent, just below 7.5 per cent in January-March. Though, the early gains in the markets were induced by hopes that upbeat data will give the central bank enough ammunition to cut interest rates at its next policy meeting on Sept. 29. The rupee weakness for the second straight session on sustained month-end dollar demand, too weighed down the sentiments. The major indices after a mildly soft start kept on moving in and out of the red zone throughout the session, traders were also concerned about Prime Minister Narendra Modi’s announcement that the government will not re-promulgate the controversial ordinance on land acquisition.

The global cues remained weak, with most of the Asian markets snapping the session in red while the Chinese market was down from the beginning despite reports that China’s securities regulator asked brokerages to step up their support for share prices by contributing 100 billion yuan ($15.7 billion) to the nation’s market rescue fund and increasing stock buybacks; the Japanese market too suffered cuts of over a percent after Japan’s factory output contracted a worse-than-expected 0.6 per cent on-month in July. The European stocks too made a soft start, heading for their worst month in four years, as the Federal Reserve indicated it’s ready to increase rates.

Overcoming a sluggish start, the Sensex rose nearly 100 points at its day's high before succumbing to selling pressure. Markets lost the plot completely in the second half and there was hardly any serious attempt to move back in green. Uncertainties over US Fed rate hike, after Fed Vice Chairman Stanley Fischer, speaking at the central bank' conference in Jackson Hole, Wyoming, said recent volatility in global markets could ease and possibly pave the way for a rate hike,  also concerns about China kept traders wary. Some cautiosness was also due to the progress of the monsoon as a strengthening El Nino weather pattern is likely to trim rainfalls in August-September, raising fears of the first drought in six years. Traders were not looking very convinced with RBI governor Raghuram Rajan’s statement that China slowdown won't hit India too much. Finance Minister Arun Jaitley too has said that the world needs other engines to carry the growth process. And in a slowdown environment in the world, an economy which can grow at 8-9 percent, like India, certainly has viable shoulders to provide the support to the global economy. Back on street, the broader markets that were posing some resistance in early trade too gave up by last and ended with cuts of about a quarter percent. On sectoral front, the power sector was one of the worst performers followed by realty, capital goods and auto. On the same time, the pharma gauge remained in jubilant mood since beginning and healthcare pack ended with gains of around two percent for the day.

The BSE Sensex ended at 26283.09, down by 109.29 points or 0.41% after trading in a range of 26215.16 and 26504.73. There were 14 stocks in green against 16 stocks in red on the index.(Provisional)

The broader indices too made a red closing; the BSE Mid cap index was down by 0.23%, while Small cap index lost 0.20%.(Provisional)

The gaining sectoral indices on the BSE were HC up by 1.98%, Metal up by 0.60%, Oil & Gas up by 0.27%, PSU up by 0.06%, while Power down by 1.54%, Realty down by 1.34%, INFRA down by 1.31%, Capital Goods down by 1.08%, Auto down by 0.77% were the top losing indices on BSE.(Provisional)

The top gainers on the Sensex were Cipla up by 3.52%, Dr. Reddys Lab up by 3.38%, Lupin up by 3.34%, GAIL India up by 2.55% and Vedanta up by 2.54%. On the flip side, BHEL down by 3.18%, Hindalco down by 2.14%, Bharti Airtel down by 1.99%, ONGC down by 1.79% and Tata Steel down by 1.68% were the top losers.(Provisional)

Meanwhile, in a major setback to the economic reform agenda, Prime Minister Narendra Modi has announced that the government will not re-promulgate the controversial ordinance on land acquisition which expires on August 31, 2015.  The government had issued the ordinance three times so far, as the land bill could not be passed in Parliament due to stiff resistance by most of the opposition parties as well as some of its allies. The bill, which seeks to amend the act of 2013, is currently being scrutinised by a joint committee of Parliament, to which it was referred by Rajya Sabha during Budget session in the wake of strong opposition by several parties.

Modi stated that he has decided that ordinance on land acquisition bill should be allowed to expire. He further stated that it means restoration of the situation that prevailed before his government took over, however he declared readiness to incorporate any suggestion in the bill on it which is pending in Rajya Sabha to benefit the farmers and said that “I have always said that, in the dispute related to the land acquisition law, the government is open minded.”

He said that lot of doubts have been created over the land bill and fear instilled among farmers even though states had suggested amendments to the act of 2013 for the benefit of villages and villagers. Insisting that the voice of farmers matters the most to him, the Prime Minister said, “the government has an open mind on Land Acquisition Bill, about which there is a lot of controversy. I have said it again and again that I am ready to accept any suggestion for the benefit of farmers.” Though, the bill on land acquisition is still alive in Rajya Sabha and the government is awaiting the report of the joint committee of Parliament on it and some are still hopeful, not giving up on making it easier to acquire land needed to kick-start hundreds of billions of dollars in stalled projects.

The CNX Nifty ended at 7971.00, down by 30.95 points or 0.39% after trading in a range of 7947.95 and 8043.60. There were 22 stocks on gainers side against 28 stocks on decliners’ side on the index.(Provisional)

The top gainers on Nifty were Cipla up by 3.66%, Lupin up by 3.45%, Dr. Reddys Lab up by 2.81%, GAIL India up by 2.75% and BPCL up by 2.67%. On the flip side, Power Grid Corpn. down by 3.51%, BHEL down by 3.28%, Bharti Airtel down by 2.33%, Ultratech Cement down by 2.18% and ACC down by 2.16% were the top losers.(Provisional)

European markets were showing a mixed trend, UK’s FTSE 100 was up by 55.91 points or 0.9% to 6,247.94, while Germany’s DAX declined by 113.77 points or 1.1% to 10,184.76 and France’s CAC lost 45.44 points or 0.97% to 4,629.69.

The Asian markets closed mostly in green on Monday, while they ended their worst monthly performance in more than three years in August, as shares struggled to recover from a global selloff sparked by worries about China. Malaysia stock exchange was closed on account of ‘National Day’ holiday. China’s central bank is highly likely to ease monetary policy again by the end of this year, as it seeks to support a rapidly cooling economy and calm financial markets. The People’s Bank of China cut interest rates and lowered the amount of reserves banks must hold for the second time in two months, acting amid pressure from a global stock market rout and massive outflows from its markets. The outstanding amount of China’s dollar-denominated Qualified Foreign Institutional Investor (QFII) programme inched up to $76.7 billion as of August 28, from $76.6 billion at the end of July. The QFII scheme was created by China to allow foreigners to invest in Chinese capital markets. Japanese industrial production fell to a seasonally adjusted -0.6%, from 1.1% in the preceding month while Japanese Housing Starts fell to a seasonally adjusted 7.4%, from 16.3% in the preceding quarter. South Korean Industrial Production fell to a seasonally adjusted annual rate of -3.3%, from 1.4% in the preceding month whose figure was revised up from 1.2%.