Post Session: Quick Review

Indian equity markets that traded in a tight range for most part of the day suffered sharp slump in the final hours that dragged the benchmark indices considerably lower from their high points of the day. There was sudden bout of profit taking with traders fearing correction and taking profit off the table amid a mixed trend at the other Asian and European markets ahead of closely watched US and Japanese central bank meetings. Earlier, the markets made a cautious start and the trade turned choppy in view of the scheduled F&O expiry of July series later in the week. Some early weakness on selling in banking and IT stocks was seen but more or less the trade remained near neutral line. Some positive sentiments were generated ahead of Finance Minister Arun Jaitley’s meeting with his counterparts in states to discuss proposed amendments to the GST Bill and with Minister of State for Finance Arjun Ram Meghwal stating that Government is working overtime to build a consensus on the long-pending Goods and Services Tax bill with the hope of getting it passed during the ongoing Parliament session. Also, with central board of trustees meeting of Retirement fund body EPFO scheduled later in the day which may double the proportion of its investment in exchange traded funds (ETFs) this fiscal to 10%.

On the global front, after a sluggish close of the US markets overnight, the Asian markets managed mostly a positive close after recovering in the late trade. Though, the Japanese market ended down by over a percent after yen rose against all of its 31 major peers as Finance Minister Taro Aso damped speculation of an immediate boost to fiscal stimulus. The European markets too fell in early deals as demand of haven assets increased, though the pound fell versus the euro after a Bank of England policy maker backed immediate stimulus to contain the impact of Britain’s decision to leave the European Union.

Back home, local markets that have surged to their one year high in the previous session tried hard to retain the gain eyeing the meeting on GST with hopes that uncertainties about the much-delayed bill would be cleared, but sentiments suddenly turned bearish after both the houses of the parliament were adjured. The mixed set of earnings too influenced sentiments; Dr Reddy’s reported 76.29% fall in its net profit on consolidated basis in June quarter. On the other hand Maruti Suzuki beat street estimates with a jump of 24.9per cent Q1 PAT Rs 1,486 crore as against Rs 1,190 crore year-on-year. ACC too reported an 81.7 per cent jump in June quarter net profit at Rs 238 crore, while TVS Motor Q1 PAT was up by 21.15% to Rs 121.25 crore. JK Paper reported 79 per cent jump in standalone net profit to Rs 26.66 crore. On the sectoral front, IT  and tech remained on buyers radar on weakness in rupee, while there was some buzz in the consumer goods stocks, with the government notifying the 7th Pay Commission report, following which the employees will now get the revised pay from their August salaries, there shall be two dates for grant of increment namely, 1st January and 1st July of every year, instead of existing date of 1st July. The upstream oil companies which were moving higher in early deals amid reports that the government is likely to completely exempt upstream oil and gas companies from contributing towards fuel subsidies for the entire fiscal this year, in view of a sharp fall in global crude oil prices. ONGC and Gail lost over a percent, while Oil India was down by around a percent.

The BSE Sensex ended at 27976.52, down by 118.82 points or 0.42% after trading in a range of 27927.13 and 28149.53. There were 8 stocks in green against 22 stocks in red on the index. (Provisional)

The broader indices made a mixed closing; the BSE Mid cap index ended up by 0.17%, while Small cap index declined by 0.69%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 0.38%, TECK up by 0.26%, Power up by 0.08%, while Realty down by 1.32%, Auto down by 1.12%, PSU down by 0.78%, Bankex down by 0.73% and Oil & Gas down by 0.65% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 2.62%, Power Grid Corpn. up by 1.96%, Tata Steel up by 1.02%, Wipro up by 0.77% and Infosys up by 0.68%.

On the flip side, Dr. Reddys Lab down by 4.97%, ICICI Bank down by 2.68%, Hero MotoCorp down by 1.98%, Maruti Suzuki down by 1.60% and Coal India down by 1.59% were the top losers. (Provisional)

Meanwhile, to boost the road sector, government has planned to spend Rs 7 lakh crore to develop around 50,000 kilometres of national highways over the next five years. Union Minister Nitin Gadkari has said that during the current financial year, the government has set a target of constructing 10,000 kilometres of greenfield highways, for which a budgetary allocation of Rs 46,834 crores has been made including cess and toll remittance for 2016-17.In addition, internal and extra budgetary resources of Rs 59.279 crores have also been allowed to be raised for highways in 2016-17.

The country at present has 96,000 km of national highways, which the Ministry wants to expand to 1,50,000 km over this period. The Minister noted that it was necessary to bring down the cost of construction and the government was taking various initiatives to ensure India becomes competitive globally. He added that the ministry was studying the construction codes of countries like US and Germany and create a code for India which will help reduce the cost of construction by almost 15-20 per cent.

Initially government has set a target of constructing Rs 5 lakh crore worth projects in five years. But considering the pace at which India is progressing, Gadkari said that there is a proposal to spend around Rs 7 lakh crores to develop National Highways of around 50,000 kilometres in the next five years. Acknowledging that road safety is a big problem in India, minister had earlier said that safe roads are of the highest priority for the government and that the US had assured full co-operation in meeting the challenge. The United States has promised technical help for the construction of roads, bridges, flyovers and also shares expertise in road safety and traffic management.

The CNX Nifty finally ended at 8590.65, down by 45.00 points or 0.52% after trading in a range of 8577.15 and 8644.90. There were 14 stocks on gainers side against 35 stocks on losers side on the index, while two stocks remained unchanged. (Provisional)

The top gainers on Nifty were Axis Bank up by 2.92%, Yes Bank up by 1.47%, Power Grid Corpn. up by 1.45%, Tata Steel up by 1.14% and Infosys up by 0.73%. On the flip side, Dr. Reddys Lab down by 4.67%, Hindalco down by 2.63%, ICICI Bank down by 2.61%, Hero MotoCorp down by 2.13% and Aurobindo Pharma down by 1.92% were the top losers. (Provisional)

The European markets were trading mostly in red, UK’s FTSE 100 was marginally up by10.64 points or 0.16% to 6,720.77, France’s CAC declined by 18.15 points or 0.41% to 4,369.85 and Germany’s DAX was down by 8.37 points or 0.08% to 10,189.87.

Asian equity markets ended mostly higher on Tuesday, with Chinese stocks gaining traction as US stocks pulled back after suffering energy stock losses. However, Japanese shares suffered heavy losses amid a rally in the yen after a local media report suggested the government's highly anticipated stimulus package may not live up to expectations. Investors awaited policy meetings by the Federal Reserve and Bank of Japan this week to see how policymakers will respond to increasing global uncertainty in the wake of last month's Brexit vote. While the Fed is not expected to raise rates at the end of its two-day policy meeting on Wednesday, the Bank of Japan is widely expected to add at stimulus at the end of its two-day policy meeting on July 29.