Post Session: Quick Review

Tuesday’s session turned out to be a choppy for Indian equity markets with frontline gauges ending with marginal losses, as traders opted to book some of the profit after two sessions of continuous rally. Markets traded in very tight band throughout the session as investors remained on sidelines ahead of Thursday’s British vote, as well as Federal Reserve chief Janet Yellen’s two-day testimony before Congress starting later in the day, she might offer clues on the timing of the next US interest rate increase. Besides, rupee depreciation too dampened markets sentiment. The rupee weakened by twenty paise to trade at 67.51 against the US dollar at the time of equity markets closing due to fresh buying of the American currency by banks and importers.

However, losses remained capped with market participants getting some support with report of good advancement of monsoon, which after a delay is now romping its way through central and north India, allowing farmers to finally begin sowing. Latest Foreign Direct Investment (FDI) regime for a host of important sectors including defence, civil aviation and pharmaceuticals too capped the downside. Global cues too remained supportive with most of the Asian counters ending in green terrain on growing expectations that British voters will opt to remain in the European Union in this week’s referendum. However, European counters were trading mostly in red after a sharp rally in the previous session, with the market coming under pressure following a drop in mining and energy shares.

Back home, Commerce and Industry Minister Nirmala Sitharaman stated that the government is monitoring the developments of Britain's exit from the European Union. While on Goods and Services Tax (GST), she said that the finance minister is talking to all the political parties. Tamil Nadu has certain issues as that is a manufacturing state and they have some natural reservations and ‘I expect that the Tamil Nadu Chief Minister will support the GST’.

On the sectoral front, banking counters witnessed selling after the finance ministry in its quarterly revision on interest rates on small savings schemes kept the rates unchanged for Q2 September 2016. The government now announces revision in interest rates on small saving schemes on quarterly basis as against the earlier practice of annual revision. Telecom stocks too edged lower after TRAI said most of the telecom operators have shown improvement in network performance although Airtel, Vodafone, Reliance, Aircel and Idea need to better their call drop rate performance in Delhi-NCR. On the flip side, auto stocks traded with traction on hopes that above normal monsoon would drive demand for two-wheelers and tractors among others. Pharma, defence and airlines stocks remained on buyers’ radar after government opened the floodgates to foreign direct investment.

The NSE’s 50-share broadly followed index -- Nifty -- slipped by around twenty points but managed to hold its crucial 8,200 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- declined by over fifty points to finish below the psychological 26,850 mark. However, broader markets outperformed benchmarks and ended the session with a gain of around one third of a percent.

The market breadth remained in the favour of advances, as there were 1,312 shares on the gaining side against 1,291 shares on the losing side, while 201 shares remained unchanged. (Provisional)

The BSE Sensex ended at 26812.78, down by 54.14 points or 0.20% after trading in a range of 26754.60 and 26925.64. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.12%, while Small cap index gained 0.36%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 0.58%, Consumer Durables up by 0.39%, Oil & Gas up by 0.34%, Consumer Discretionary Goods & Services up by 0.28% and Energy was up by 0.17%, while Utilities down by 0.78%, Power down by 0.70%, Bankex down by 0.65%, Healthcare down by 0.40% and Capital Goods down by 0.39% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 1.38%, Mahindra & Mahindra up by 0.73%, Wipro up by 0.73%, Tata Motors up by 0.67% and HDFC up by 0.38%. On the flip side, NTPC down by 1.75%, Axis Bank down by 1.65%, Adani Ports &Special down by 1.57%, Asian Paints down by 1.18% and SBI down by 1.07% were the top losers. (Provisional)

Meanwhile, after the government allowed 100% foreign direct investment (FDI) in single brand retail, civil aviation, defence, airports, pharmaceuticals, food products and animal husbandry, the US India Business Council (USIBC), has said that the widened scope of FDI norms in this sector will provide a fillip to the potential of the US-India bilateral trade.

USIBC President Mukesh Aghi stated that, 'We applaud the liberalisation of FDI to 74 per cent in brownfield investments under the automatic route in the pharmaceutical sector, while also allowing investments beyond 74 per cent and up to 100 per cent through government approval.' He added that, allowing up to 74% FDI in pharmaceutical sector through the automatic rout will encourage investment to move swiftly into India and will further promote and expand healthcare access in India.

These reforms include accelerated infrastructure investment, greater openness to FDI, less red tape, and a revised bankruptcy code. USIBC President said, 'We had stated earlier that $45 billion is only a starting point for American companies to invest in India. With these newly announced reforms, FDIs, technology transfers, and jobs are likely to increase substantially.”

The CNX Nifty ended at 8219.90, down by 18.60 points or 0.23% after trading in a range of 8202.15 and 8257.25. There were 15 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 2.16%, Hindalco up by 2.02%, ONGC up by 1.73%, Tata Motors - DVR up by 1.42% and Mahindra & Mahindra up by 1.18%. On the flip side, Tata Power down by 2.33%, Aurobindo Pharma down by 2.30%, NTPC down by 1.72%, Adani Ports & Special down by 1.72% and Tech Mahindra down by 1.71% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 decreased 19.77 points or 0.32% to 6,184.23 and Germany’s DAX was down by 1.07 points or 0.01% to 9,960.95, while France’s CAC was up by 8.6 points or 0.2% to 4,349.36.

Asian equity markets ended mostly higher on Tuesday on optimism Britain will vote to stay in the European Union, as investors awaited an economic report by the head of the US Federal Reserve. Two opinion polls on Monday showed 'Remain' camp regaining some momentum; while the online poll by YouGov gave Leave a 51/49 advantage. Japanese shares rose on Tuesday in choppy trade, as a weakening yen supported sentiment. However, Chinese shares gave up early gains to close lower after a late bout of selling emerged in small-cap stocks.