Post Session: Quick Review

Today’s session turned out to be a disappointing session of trade for Indian equity benchmarks, where frontline gauges ended the trade with a cut of over one percent on concerns about earnings outlook and as investors weighed  the recent rally in equities may have been overdone. The markets started their trade slightly higher but failed to hold gains on account of profit booking as the street remained cautious after Raghuram Rajan at his last monetary policy review meeting as RBI governor hinted upside risks to inflation, while keeping key policy rates unchanged. The central bank expects that the prices of pulses and cereals would rise and services inflation would remain somewhat sticky. The sentiments weighed down by the report that the gross non-performing assets (GNPAs) of the public sector banks increased from Rs 2.16 lakh crore in 2013-14 to Rs 4.76 lakh crore in 2015-16.  The report also said that the top 100 borrowers of public sector banks owe nearly Rs 14 lakh crore to them. Investors failed to draw any sense of relief from the report that tax collections have grown up at a robust pace in the first four months of the current fiscal with central excise and personal income tax showing impressive gains. Direct tax collections grew 24% in April-July over corresponding period last year, while indirect taxes returned a 29.9% increase over the same period. Foreign portfolio investors (FPIs) bought shares worth net Rs 144.15 crore yesterday as per provisional data released by the stock exchanges, failed to provide some upside support. 

On the global front, Asian shares displayed a mixed performance, as conflicting indicators, concluding earnings season and seasonally thin trading environment resulted in another lackluster session. European stocks came off their session lows to trade in red as global investors tread cautiously, considering the timing of the next interest rate hike by the US Federal Reserve as well as the outlook for oil prices.

Back home, the street continued their weak trade taking cues from European market. The loss got enlarged after the operational performance of the company disappointed the street. The margins came in below the expectations, triggering a selloff in the stock. Auto stocks failed to draw solace from report that car sales rose 9.62% in India last month while overall passenger vehicles grew 16.78%, driven mainly by robust sales of utility vehicles including Maruti Suzuki’s Vitara Brezza and Hyundai’s Creta. According to Society of Indian Automobile Manufacturers (SIAM), domestic passenger vehicle (PV) sales stood at 259,685 units in July as against 222,368 units in the same month last year.

The BSE Sensex ended at 27750.78, down by 334.38 points or 1.19% after trading in a range of 27736.62 and 28143.28. There were 3 stocks advancing against 26 stocks declining on the index, while one stock remained unchanged. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.20%, while Small cap index was down by 1.26%. (Provisional)

The top losing sectoral indices on the BSE were Oil & Gas down by 2.24%, Auto down by 1.99%, Consumer Durables down by 1.76%, Realty down by 1.70% and Power down by 1.56%. (Provisional)

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 7.68%, TCS up by 0.81%, Coal India up by 0.34% and ONGC up by 0.01%. (Provisional)

On the flip side, Lupin down by 4.02%, Hero MotoCorp down by 2.86%, Reliance Industries down by 2.63%, ICICI Bank down by 2.55% and Mahindra & Mahindra down by 2.32% were the top losers. (Provisional)

Meanwhile, to ensure higher compensation to employees in case of industrial accidents, the Lok Sabha has unanimously passed the Employees Compensation (Amendment) Act 2016. Labour and Employment Minister Bandaru Dattatreya has said that the government was committed to ensure protection of jobs, wages, social security and fair wages to workers.

The bill provides for higher compensation in case an employee is injured in industrial accident and has a provision for hefty penalty in case of violation by employers. The new legislation raises compensation to Rs 50,000 to 1 lakh to employees and their dependents in the event of injury in industrial accidents, including occupational diseases. Earlier this compensation was Rs 5,000.

Besides, Rs 50,000 compensation, there will be 'penalty for failure to display the Act' by the employers. The Bill says that wherever an establishment or factory is there, an employer has to inform the employee of his right to compensation under the Act. Such information must be given in writing (in English, Hindi or the relevant official language) at the time of employing him.

Dattatreya has said that a large number of organised workforces will be benefited by it. He further said that the government has also increased the minimum pension from Rs 350 crore to Rs 1000 crore and has launched a National Career Service Portal, in which 9 lakh people have registered.

The CNX Nifty ended at 8567.90, down by 110.35 points or 1.27% after trading in a range of 8564.60 and 8690.10. There were 7 stocks advancing against 43 stocks declining on the index while, 1 stock remained unchanged. (Provisional)

The top gainers on Nifty were Adani Ports & Special Economic Zone up by 7.42%, Bank of Baroda up by 1.04%, TCS up by 0.97%, Zee Entertainment up by 0.70% and Yes Bank up by 0.41%. (Provisional)

On the flip side, Grasim Industries down by 7.26%, ACC down by 4.39%, Idea Cellular down by 4.27%, Ambuja Cement down by 4.07% and Lupin down by 3.94% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 7.88 points or 0.12% to 6,843.42, Germany’s DAX decreased 37.09 points or 0.35% to 10,655.81 and France’s CAC decreased 12.47 points or 0.28% to 4,455.60.

Asian equity markets showed a mixed performance on Wednesday, with traders eyeing moves in oil prices ahead of a flurry of Chinese data later in the week. Chinese shares ended lower as investors awaited industrial output, fixed asset investment and retail sales data due Friday. Japanese shares fell as the dollar weakened against the yen and investors moved to the sidelines ahead of a public holiday in Japan on Thursday. Investor reaction to better-than-expected core machinery orders data was muted. Reports showed that Core machine orders surged 8.3 percent in June from the previous month after falling for two straight months. Meanwhile, Hong Kong stocks touched a fresh eight-month high on Wednesday, before slipping back, as yield-hungry investors continued to hunt for bargains.