Barometer indices unable to pickup pace; end on a flat note

It was another lackadaisical performance from the Indian benchmark indices on Thursday, as they failed to gain ground and settled marginally above the neutral line. The key indices oscillated in an extremely tight range through the session as market participants remained on the sidelines lacking conviction amid the persistent worries over global financial stability. The sentiments took support from positive developments from the Southwest monsoon rains that showed a marginal rise of one per cent with a good amount of precipitation in several parts of the country for the period between June 1 and July 6, 2016. Also, Food Minister Ram Vilas Paswan said pulse production could increase by 18 per cent to 20 million tonnes this crop year on better monsoon which would help bring down retail prices and ease some pressure from inflation. Some support also came with the newly appointed Minister of State for Finance Santosh Gangwar’s statement that the government is confident of getting the much-delayed GST Bill passed in the upcoming Monsoon session of Parliament, beginning later this month. However, gains remained capped with the US stating that India’s growth rate target of 7.5% seems 'overstated' due to 'depressed investor sentiment' stemming from its failure to implement crucial market reforms, but it lauded Reserve Bank governor Raghuram Rajan for his 'monetary stewardship'.

On the global front, Asian stock markets ended mixed on Thursday as investor took some breath after an upbeat U.S. economic report help to ease concerns over global turmoil related to Britain’s vote to leave the European Union. Minutes from the Federal Reserve's June board meeting suggested that board members last month were increasingly worried about the outlook for the US economy and the possible consequences of Britain's vote on EU membership. Comments from Fed Governor Daniel Tarullo on inflation and unemployment also reinforced expectations the Fed will not hike rates this year. Further, Japanese shares fell for the third straight session as renewed strength in the yen kept investors nervous, while Chinese shares erased early losses to end on a flat note. Meanwhile, all major European stock markets traded with firm gains in early deals with CAC-40, DAX and FTSE-100 up over a percent each.

Back home, the Indian equity indices made cautious start despite positive close of US markets overnight, as investors preferred staying on the sidelines as they lacked conviction for the strength of the market. Thereafter, the indices kept oscillating in a narrow range through the day’s trade. Finally, the NSE’s 50-share broadly followed index Nifty, settled with single digit gains above the crucial 8,300 support level, while Bombay Stock Exchange’s Sensitive Index Sensex added over thirty points and closed above the psychological 27,200 mark. On the BSE sectoral space, the FMCG counter remained the top gainer in the space with around a percent gains followed by the Power and Banking pockets which gained around quarter a percent. On the flipside, IT counter languished at the bottom of the table with large cuts of over one and half a percent, while the Capital Goods, Metal and Auto sectors settled with moderate cuts of over half a percent. The market breadth remained optimistic as there were 1546 shares on the gaining side against 1207 shares on the losing side, while 148 shares remained unchanged.

Finally, the BSE Sensex gained 34.62 points or 0.13% to 27201.49, while the CNX Nifty was tad higher by 1.95 points or 0.02% to 8,337.90.

The BSE Sensex touched a high and a low 27288.22 and 27146.95, respectively. The broader indices made a mixed closing; the BSE Mid cap index ended down by 0.41%, while Small cap index was up by 0.04%.

The top gaining sectoral indices on the BSE were FMCG up by 0.92%, Power up by 0.30%, Bankex up by 0.24% and Realty up by 0.20%, while IT down by 1.63%, TECK down by 1.58%, Capital Goods down by 0.79%, Metal down by 0.66% and Auto down by 0.52% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 6.25%, Hindustan Unilever up by 3.03%, Dr. Reddys Lab up by 2.97%, HDFC up by 2.51% and HDFC Bank up by 1.60%. On the flip side, Tata Steel down by 4.92%, TCS down by 2.16%, Coal India down by 1.96%, Adani Ports &Special down by 1.84% and Infosys down by 1.55% were the top losers.

Meanwhile, continuing its lead over China in pharmaceutical exports in 2015, India’s pharmaceutical exports surged to $12.54 billion from $11.66 billion in 2015 recording a growth of 7.55 percent. According to Ministry of Commerce & Industry, India moved ahead of China in all important markets such as US, European Union and Africa. However, China too increased its exports of pharma products from $6.59 billion to $6.94 billion with a growth of 5.3% during the same period. 

India's export of pharma products to the US jumped by 23.4 percent to $4.74 billion last year, while China's pharma exports to the US increased by 15 per cent to $ 1.34 billion in the same period. Besides United States, India also managed to beat China in terms of growth in the European Union and Africa with $1.5 billion and $3.04 billion, respectively. China's exports to EU and Africa showed a declining trend.

India is a global hub of generic medicines. Recently, a joint study of industry body ASSOCHAM and TechSci research had stated that export of pharmaceutical products from India is likely to cross $14. billion mark this year and may reach about $20 bn by 2020. However, delay in regulatory approvals in US, Russia, Africa and others may cut down export growth to almost half - from a 15 per cent CAGR growth level clocked in 2010-2014 to eight per cent during 2015-2020.

The CNX Nifty traded in a range of 8,361.95 and 8,317.70. There were 23 stocks advancing against 28 decliners on the index.

The top gainers on Nifty were Lupin up by 7.75%, Hindalco up by 3.52%, Hindustan Unilever up by 3.12%, Dr Reddys Lab up by 2.66% and HDFC up by 2.56%. On the flip side, Tata Steel down by 5.02%, HCL Tech down by 2.86%, Zee Entertainment down by 2.80%, TCS down by 2.31% and Adani Ports &Special down by 2.24% were the top losers.

European markets were trading in green, France’s CAC was up by 63.24 points or 1.55% to 4,148.54, Germany’s DAX gained 99 points or 1.06% to 9,472.26, while UK’s FTSE 100 was higher by 99.08 points or 1.53% to 6,562.67.

Asian equity markets ended mixed on Thursday after the latest Federal Reserve minutes showed that prospects of an interest rate hike have diminished. Minutes from the Federal Reserve's June board meeting suggested that board members last month were increasingly worried about the outlook for the US economy and the possible consequences of Britain's vote on EU membership. Comments from Fed Governor Daniel Tarullo on inflation and unemployment also reinforced expectations the Fed will not hike rates this year. A stronger than expected US ISM Services figure helped outweigh lingering uncertainty over the impact of last month's Brexit vote. US service-sector activity picked up in June, the Institute for Supply Management revealed in a report released on Wednesday, signaling Friday's nonfarm payrolls report for June could reveal a strong rebound in job growth after anemic showings in April and May. Japanese shares fell for the third straight session as renewed strength in the yen kept investors nervous. Chinese shares erased early losses to end on a flat note, as concerns about further yuan weakness and instability in Europe after Brexit offset expectations of more stimulus measures to support the economy. Markets in Malaysia and Indonesia were closed for Eid-ul-Fitr.