Post Session: Quick Review

Indian markets after a day of consolidation regained their pace on Thursday, bucking the sluggish global trend as the traders once again indulged in value buying. The gains were widespread and buying was visible not only in blue chips but across the sectors barring a few healthcare stocks. However, the start of the day was weak and major benchmarks kept reeling in red for almost half of the day, with Sensex edging lower in opening while Nifty slipping closer to its crucial psychological level of 8,500 amid profit-booking. The markets gained momentum with hopes for smooth passage of much-awaited GST bill in the coming monsoon session of the parliament, after Congress leadership accepted the NDA government's invitation for further negotiations and discussion on alternative proposals on capping of the rate. Union Minister Nitin Gadkari too expressed confidence that the crucial GST bill will be passed in the coming Monsoon session of Parliament as he touted the various reform measures implemented by the government to boost economic growth and attract billions of dollars of foreign investment and technical expertise across sectors. Traders also got encouragement with gain in rupee, which strengthened past 67-mark against the US dollar as the foreign institutional investors continued to buy local equity and bonds in the markets.

On the global front, while the rally that drove Asian stocks to levels last seen in April showed signs of flagging as investors await details of Japan’s stimulus plans with the corporate earnings season starting to heat up, Japanese shares climbed and the yen slumped on speculation Prime Minister Shinzo Abe is contemplating so-called helicopter money to revive the world’s third-largest economy. Later the European markets too made a strong start before a forecast cut in UK interest rates. Investors are pricing in an interest rate cut for the first time in more than seven years to curb economic fallout from Britain's vote to exit the European Union.

Back home, the second half of recovery led the markets to near their intraday high at closing, however the trade remained choppy and there was sector and scrip specific movement that kept the momentum going. Markets rose after falling earlier in the session as investors remained watchful ahead of quarterly corporate results and an expected government announcement on who would take over as the country’s next central bank chief. Marketmen have been on edge ahead of the appointment of the next Reserve Bank of India governor. Meanwhile, the recovery was fuelled by the hopes of rise in consumer demand after June wholesale inflation rose to 1.62 per cent as compared to 0.79 per cent in May. Inflation more than doubled in June since last month as prices of vegetables and fruits continued to increase for four months in a row. However, traders were hoping that a normal monsoon and a reasonable spatial and temporal distribution of rainfall, along with various supply management measures and the introduction of the electronic national agriculture market (e-NAM) trading portal, should moderate unanticipated flares of food inflation.

Back on street, the broader markets once again returned to the limelight and the mid cap recovering all the previous session losses once again came close to its all time high. On the sectoral front, barring some profit taking in healthcare, IT and realty, all the indices ended in green. In non sectoral gauges the gold and jewellary stocks were in jubilant mood as the government relaxed the rules for its tax on gold jewellery sales that was introduced earlier this year in an attempt to address concerns raised by the industry. According to the new rules, jewellers with turnover up to Rs 15 crore rupees ($2.2 million) a year will be exempt from the excise duty. Earlier, the exemption limit was for jewellers with turnover up to Rs 12 crore. The government also said that in the first two years, government agencies will not audit jewellers that have turnover of less than Rs 10 crore. Apart from gold, shares of gems and jewellery companies also moved higher on report that the government increased Small Scale Industry (SSI) exemption limit to Rs 10 crore from Rs 6 crore and waived off the levy on sale of traded goods and relaxed various procedural norms.

The BSE Sensex ended at 27951.19, up by 136.01 points or 0.49% after trading in a range of 27763.15 and 27967.77. There were 22 stocks on gainers side against 8 stocks on losers’ side on the index. (Provisional)

The broader indices slightly outperformed the benchmarks; the BSE Mid cap index was up by 0.53%, while Small cap index ended higher by 0.65%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.33%, Bankex up by 1.34%, PSU up by 1.03%, Capital Goods up by 0.97%, FMCG up by 0.76%, while Realty down by 0.34% and IT down by 0.20% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 2.71%, ICICI Bank up by 2.45%, Power Grid Corpn. up by 1.85%, SBI up by 1.80% and ITC up by 1.46%. On the flip side, ONGC down by 1.53%, Infosys down by 1.47%, Sun Pharma Inds down by 1.19%, Mahindra & Mahindra down by 1.17% and Cipla down by 0.82% were the top losers. (Provisional)

Meanwhile, in a bid to boost the skill development, the government has given its approval for an outlay of Rs 12000 crore under Pradhan Mantri Kaushal Vikas Yojana (PMKVY), to impart skilling to one crore people over the next four years till 2020. The Scheme would move to a grant based model where the training and assessment cost would be directly reimbursed to training providers and assessment bodies in accordance with the Common Norms.

State Governments would be involved through a project based approach under the PMKVY with 25% of the total training targets, both financial and physical, being allocated under this stream of the Scheme. The financial amount/budget for achieving 25% of the total training targets of next phase of PMKVY would be directly allocated to the States.

PMKVY will provide fresh training to 60 lakh youths and certify skills of 40 lakh persons acquired non-formally under the Recognition of Prior Learning (RPL).The target allocation between fresh trainings and RPL will be flexible and interchangeable depending on functional and operational requirements.

Under the scheme, the government will provide financial support to trainees in the form of travel allowance, boarding and lodging costs. Post placement support would be given directly to the beneficiaries through Direct Benefit Transfer (DBT). Besides, mobilization, monitoring and post training placement of trainees will be done through Rozgar Melas (placement camps) and Kaushal Shivirs (mobilization camps). Disbursement of training cost to training partners will be linked to Aadhaar and biometrics for better transparency and targeting. Skill training would be done based on industry led standards aligned to the National Skill Qualification Framework (NSQF). Apart from catering to domestic skill needs, PMKVY will focus on skill training aligned with international standards for overseas employment, including in Gulf countries and Europe.

The CNX Nifty ended at 8563.60, up by 44.10 points or 0.52% after trading in a range of 8500.70 and 8571.40. There were 39 stocks in green against 12 stocks in red on the index.(Provisional)

The top gainers on Nifty were Grasim Industries up by 2.86%, ICICI Bank up by 2.81%, Tech Mahindra up by 2.36%, Maruti Suzuki up by 2.33% and Yes Bank up by 2.30%. On the flip side, ONGC down by 1.45%, Infosys down by 1.32%, Sun Pharma Inds down by 1.32%, Mahindra & Mahindra down by 1.15% and Dr. Reddys Lab down by 1.05% were the top losers.(Provisional)

European markets were trading in green with good gains, France’s CAC was up by 45.78 points or 1.06% to 4,381.04, UK’s FTSE 100 gained 58.08 points or 0.87% to 6,728.48 and Germany’s DAX added 138.21 points or 1.39% to 10,068.92.

Asian equity markets ended mixed on Thursday, as a steep fall in oil prices and tepid overnight cues from Wall Street instilled a sense of caution among traders ahead of the Bank of England's policy decision later in the day. Investors are pricing in an interest rate cut for the first time in more than seven years to curb economic fallout from Britain's vote to exit the European Union. However, Japanese shares rose for the fourth day as the yen dropped to the lower 105 range on expectations that policymakers will supplement monetary policy with fiscal stimulus. Hong Kong shares finished higher on hopes the Bank of England will cut rates to ward off a possible recession that could impact some Hong Kong companies. Meanwhile, Chinese shares eased a little bit, with metal and mining stocks pacing declines in response to disappointing trade data released on Wednesday. Reports showed that China’s June exports were better than expected, but imports fell sharply in the month.