Post Session: Quick Review

Buying activity which took place during last leg of trade mainly drove the markets higher and key domestic benchmarks somehow managed to keep their head above water on Tuesday. Traders took some encouragement with Chief economic adviser (CEA) to the finance ministry Arvind Subramanian’s statement that the Indian economy can grow at more than 8 per cent in the next decade, if global economic environment remains supportive. Sentiments also got some support with global rating agency reaffirming India’s 'BBB-' rating with a stable outlook, while saying it would produce a 7.7 per cent growth rate for FY2017. However, Fitch expressed concern over deteriorating private investment and the still weak fiscal position. Meanwhile, the global financial services major Morgan Stanley too has revised upwards its India growth estimate for this year to 7.7 percent from 7.5 percent earlier, because of 'positive surprises' in the macro data.

However, gains remained capped with the RBI Governor Raghuram Rajan’s statement that, India has a long way to catch up with China on per capita GDP and will need years of strong growth but cautioned against expanding economy at the cost of environment. He also said that the rupee level currently is pretty reasonable and any attempt to devalue it may lead to a surge in inflationary pressures and offset any benefits. Moreover, traders kept a close watch on the monsoon session of Parliament which started on Monday, amid hopes the government will be able to pass the Goods and Services Tax Bill that is now stuck in the Upper House.

Weakness in European counterparts too weighed, with CAC, DAX and FTSE retreating from a three-week high on Tuesday, as disappointing corporate updates soured the investing mood. Asian markets ended mixed, as a downturn in crude oil curbed the enthusiasm from fresh record highs on Wall Street.

Back home, immense volatility characterized trading whereby benchmark equity indices kept altering between green and red terrain throughout the session. But, buying in last hour of trade helped benchmarks to end with marginal gains. Appreciation in Indian rupee against dollar aided sentiments. The rupee was trading strong by 6 paise at 67.14 at the time of equity markets closing on fresh dollar selling by banks and exporters.

On the sectoral front, shares of select public sector undertaking (PSU) banks ended on high note, recovering from their early morning losses, on report that the government will infuse Rs 229.15 billion ($3.41 billion) in 13 state-run banks in the financial year ending on March 2017. The sum is about 92% of the budgeted provision of Rs 25,000 crore. However, FMCG counter edged lower, led by around three percent fall in HUL after company reported weaker than expected first-quarter earnings. Select stocks in Software counter too edged lower ahead of Wipro’s first quarter earnings which will be declared later in the day.

The NSE’s 50-share broadly followed index Nifty gained by around twenty points to hold its psychological 8,500 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over forty points to end near its crucial 27,800 mark. Broader markets, however, struggled to get any traction and ended the session mixed.

The market breadth remained in favor of decliners, as there were 1,222 shares on the gaining side against 1,450 shares on the losing side while 164 shares remain unchanged. (Provisional)

The BSE Sensex ended at 27787.62, up by 40.96 points or 0.15% after trading in a range of 27637.98 and 27826.69. There were 16 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.18%, while Small cap index down by 0.11%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.90%, Energy up by 1.41%, PSU up by 0.87%, Power up by 0.64% and TECK up by 0.44%, while FMCG down by 0.62%, Consumer Durables down by 0.29%, Realty down by 0.26%, Finance down by 0.23% and Bankex down by 0.15% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 2.11%, Power Grid up by 1.93%, Lupin up by 1.52%, Tata Steel up by 1.27% and TCS up by 1.15%. On the flip side, Hindustan Unilever down by 2.87%, Axis Bank down by 1.06%, HDFC Bank down by 1.03%, Mahindra & Mahindra down by 0.84% and Coal India down by 0.81% were the top losers. (Provisional)

Meanwhile, Domestic rating agency ICRA has said that the Wholesale Price Index (WPI) increasing to a 20-month high of 1.6 per cent in June from 0.8 per cent in May will augur well for the toll road projects revenues for financial year 2017-18.

According to a latest research report, ICRA expect the toll rates to increase in the range of 3.0-3.7 per cent during FY2018 - the highest growth after FY2015, following significant de-growth in toll rates for two consecutive years. While, traffic is expected to increase by about 5-6 per cent in terms of annual average daily traffic. Overall, the growth in toll collections is expected to remain healthy at more than 10-11 per cent levels.

The report further said, “With rising inflation the operations, maintenance and interest costs will also witness an increase. However, growth in revenues will be higher, resulting in improved profitability. Impact of negative WPI is seen during FY2016 & FY2017. Projects for which toll rates are linked fully with WPI, the toll rates were revised downwards whereas for the other projects, the increase has been 2.7% in FY2016 and 1.9% in FY 2017. However, the traffic growth has been robust during FY2016 which is likely to continue during current FY. Toll fees are revised annually to adjust for inflation, as determined by the movement in WPI, which links revenues of toll road SPVs to movements in the price index.

The CNX Nifty ended at 8528.55, up by 19.85 points or 0.23% after trading in a range of 8476.70 and 8540.05. There were 33 stocks advancing against 17 stocks declining on the index, while one stock remained unchanged. (Provisional)

The top gainers on Nifty were BPCL up by 2.88% and Idea Cellular up by 2.36% and ICICI Bank up by 2.18% and Power Grid Corpn. up by 1.96% and Tata Motors - DVR up by 1.91%. On the flip side, Hindustan Unilever down by 2.91%, Indusind Bank down by 2.10%, Yes Bank down by 1.80%, Eicher Motors down by 1.22% and Axis Bank down by 0.97% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX declined 128.57 points or 1.28% to 9,934.56, France’s CAC decreased 41.06 points or 0.94% to 4,316.68 and UK’s FTSE 100 was down by 27.35 points or 0.41% to 6,668.07.

Asian equity markets ended mixed on Tuesday as oil extended overnight losses on concerns over a crude and refined fuel glut, and Moody's Investors Service placed Turkey's investment-grade credit rating on review for downgrade, saying it needs to evaluate the effects of the recent coup attempt. Chinese shares lost ground on fears of possible capital outflows, a day after the yuan slipped below the psychologically important level of 6.7 to the dollar for the first time in more than five years. The spectre of a slowing housing market and doubts over the nature of economic growth in the country also dented investor sentiment. Hong Kong shares fell as investors took profits following sharp gains over the past two weeks. However, Japanese shares rose for a sixth straight day, its highest level in nearly six weeks, with a sagging yen and Wall Street's rise to a fresh record boosting investors' appetite for riskier assets.