Post Session: Quick Review

Trade for the day turned out to be a fabulous for Indian equity benchmarks, where frontline gauges garner modest gains. Indian equity benchmarks started the trade on fine fettle reacting to the minutes of Federal Reserve. Market participants interpreted the minutes as moderately positive for risk-taking, with the Fed remaining divided on the timing of the next rate hike. The sentiments got some support with Jharkhand becoming the third state to ratify the Goods and Services Tax Amendment Bill in a special session of the Legislative Assembly. The state of Assam and Bihar had already passed the GST Bill. The government has set a deadline of April 2017 for its rollout. Investors took note that government has initiated an exercise to update ‘Make in India’ action plan. Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek said that the commerce and industry ministry has reviewed the action plan with all departments and has also discussed it with all stakeholders, including industry associations. The ‘Make in India’ programme was launched in September 2014 with an aim to make the country a global manufacturing hub and attract investments. Some support came after Moody’s Investors Services released a report on emerging market highlighting that India is seeing gradual progress on reforms and the country’s outlook will largely be determined by domestic factors. The report maintained Gross Domestic Product (GDP) growth forecast for India at 7.5% adding that India now seems less vulnerable than it used to be.

On the global front, Asian shares ended mostly higher, while Japanese shares hit their lowest levels in nearly two weeks as the yen firmed up and weak trade data signaled continued weak demand. Rating agency Moody’s Investors Service raised its forecasts for China’s economic growth in the wake of significant fiscal and monetary stimulus policies. European’s benchmark stock index rose for the first time in five sessions, with resource companies leading the charge higher on hopes the US Federal Reserve won’t raise rates this year. Investors turned their attention to the upcoming minutes of the European Central Bank’s latest meeting.

Back home, the street continued their firm trade tracking European counterparts. Select steel makers were in limelight with Moody’s report that steel demand in India will outpace the regional average, while the profitability of domestic steel companies will outperform regional peers on account of an increase in domestic demand.

The BSE Sensex ended at 28123.44, up by 118.07 points or 0.42% after trading in a range of 28077.00 and 28214.17. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.43%, while Small cap index was up by 1.01%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 1.83%, Bankex up by 1.64%, Realty up by 1.09%, PSU up by 1.00% and Oil & Gas up by 0.76% while, Metal down by 0.55%, Consumer Durables down by 0.48%, Capital Goods down by 0.42%, IT down by 0.29% and FMCG down by 0.12% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Power Grid Corporation up by 4.55%, NTPC up by 4.36%, Adani Ports & Special Economic zone up by 2.79%, Bharti Airtel up by 2.38% and ICICI Bank up by 1.84%. (Provisional)

On the flip side, Coal India down by 2.39%, Larsen & Toubro down by 1.20%, Tata Steel down by 1.12%, GAIL India down by 1.06% and Hindustan Unilever down by 0.84% were the top losers. (Provisional)

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that India’s industrial output will not return to a sustained and high growth path as long as  excess capacity in the manufacturing sector remains and private investment does not revive.

Industrial output grew 2.1 percent in June and 1.1 percent in May. Even if the positive growth in the index of industrial production (IIP) in two consecutive months is encouraging, rating agency believes that it is still too early to expect an improvement and stability in industrial growth. Besides, retail and wholesale inflation for July came in at 6.07 percent and 3.55 percent respectively and manufacturing output increased to 0.9 percent year-on-year in June 2016 from 0.6 percent in the previous month. 

The report stated that a marginal increase in manufacturing does not generate confidence that the downtrend in manufacturing has been reversed, the capacity utilization in manufacturing has been hovering in the range of 70-75 percent now for nearly five years. Further it said that an analysis of food inflation data over the past 6-7 years suggests that nothing has managed to tame food inflation.

Ind-Ra’s assessment said that food inflation despite a favorable monsoon could surprise on the upside, especially with regard to kitchen items like potato, tomato, onion, milk, egg, pulses - as has been the case in the past. It said that the goalpost shifts each time food inflation surprises on the upside. It has become routine to put the blame on the failure of monsoon, unseasonal rainfall, the futures market in agricultural commodities and sometimes on hoarding and black-marketing. But the normal monsoon so far has raised expectations that food inflation will moderate in coming months and cool the overall inflation.

The CNX Nifty ended at 8668.70, up by 44.65 points or 0.52% after trading in a range of 8645.05 and 8690.70. There were 35 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 4.85%, Power Grid Corporation up by 4.58%, NTPC up by 4.36%, IndusInd Bank up by 3.72% and Grasim Industries up by 2.87%. (Provisional)

On the flip side, Coal India down by 2.53%, Larsen & Toubro down by 1.45%, Tata Power down by 1.35%, Tata Steel down by 1.29% and Tech Mahindra down by 1.07% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 13.46 points or 0.2% to 6,872.61, Germany’s DAX increased 45.77 points or 0.43% to 10,583.44 and France’s CAC increased 7.63 points or 0.17% to 4,425.31.

Asian equity markets showed a mixed performance on Thursday, as a firmer yen and weakness in global oil markets despite an unexpected drawdown in US crude and gasoline stocks took some of the shine off the minutes from the Federal Reserve's July monetary policy meeting. The FOMC minutes showed that officials were still split over the timing of the next interest-rate rise despite a strong rebound in employment in June. With weak growth in the US and abroad and consumer price inflation continuing to run below the Committee's longer-run objective of 2 percent, Fed officials stopped short of any signals on the timing of their next move. Chinese shares slid after an official survey showed China home price growth moderated in July. Japanese shares closed lower as the yen firmed up and weak trade data signaled continued weak demand. Reports showed that Japan's exports fell more than forecast in July but imports also dropped at their fastest pace since 2009, resulting in a bigger-than-expected trade surplus.