Post Session: Quick Review

Indian equity markets witnessed a volatile session in second half of trade which ended in green, on the penultimate session of F&O series expiry. Indian equity benchmarks started the trade in green on account of buying in frontline blue chip counters taking cues from global counterparts. The sentiments were on optimistic note with rating agency Ind-Ra revising India’s economic growth forecast to 7.8% for the ongoing fiscal on better monsoon. It has said the positive impact of monsoon on agriculture will support the overall GDP growth with its backward and forward linkages. Prime Minister Narendra Modi stated that India’s progress is incomplete without rapid expansion and up-gradation of basic infrastructure, while underlining that his government’s efforts are characterized by speed and scale to usher in an era of historic growth. Modi, who chaired a meeting to review the progress in core infrastructure sectors, said it was noted that there has been phenomenal progress in vital sectors such as renewable energy and railways. Profit booking emerged in late afternoon session trade on account of selling. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. August 2016 series to next month i.e. September 2016 series.

On the global front, Asian shares ended mostly lower, ahead of Federal Reserve Chairwoman Janet Yellen’s speech later this week, which could provide hints about the timing of further hike in interest rates. An adviser to Prime Minister Shinzo Abe stated that Japan should spend 10 trillion yen ($99.83 billion) on fiscal stimulus both in fiscal 2017 and in fiscal 2018 to offset a lack of demand in the economy and eliminate the risk of deflation. European stocks were mostly higher. Investors pulled 5.7 billion pound out of UK-based stock market funds, preferring to put their cash into safe havens due to concerns over Britain’s vote to leave the EU. The total outflow from UK-domiciled funds was nearly 5 billion pound, the heaviest level of redemption in three years.

Back home, the street gained strength on account of buying in frontline blue chip counters which helped benchmarks touch intra-day high after Goldman Sachs in its note highlighted that it continues to maintain India's GDP growth forecast of 7.9% for this fiscal. The on-going second quarter is expected to grow at 7.8% level backed by higher government spend and rise in consumption activity. It expects robust consumption trends to offset weak private investment in the economy. The broking firm stated that the full year growth will be benefited by a good monsoon, recently introduced 7th Pay Commission, clearance of key reforms, favorable fiscal monetary policy and continuation of foreign direct investment (FDI) inflows.

The BSE Sensex ended at 28059.94, up by 69.73 points or 0.25% after trading in a range of 27959.87 and 28108.39. There were 12 stocks advancing against 17 stocks declining, while 1 stock remained unchanged. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.61%, while Small cap index was up by 0.65%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.49%, PSU up by 0.71%, Power up by 0.69%, IT up by 0.43% and TECK up by 0.38%, while Metal down by 0.22% and Capital Goods down by 0.01% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 2.31%, Cipla up by 1.99%, NTPC up by 1.39%, Infosys up by 1.32% and Sun Pharma up by 1.25%. (Provisional)

On the flip side, Lupin down by 2.20%, Tata Steel down by 1.36%, TCS down by 1.30%, Tata Motors down by 1.10% and Coal India down by 0.83% were the top losers. (Provisional)

Meanwhile, the government is taking into consideration the suggestions of Special Investigation Team (SIT) on black money to prohibit cash transactions above Rs 3 lakh, put 1% Tax Collected at source (TCS) on this transactions and also made PAN quoting mandatory.

Central Board of Direct Taxes (CBDT), chairperson, Ms Rani Singh Nair said that the government is holding discussions for the renegotiated India-Singapore tax treaty. Thus now they have re-negotiated Mauritius, Singapore is under discussion and hope that they will have a discussion with them as this is a bilateral treaty. After the concerns of both the countries the treaty will be signed.

SIT stated that there is a need to put an upper limit to cash transactions. It recommended a total ban on cash transactions of Rs 3 lakh and above, an Act be framed to declare such transactions as illegal and punishable under law. SIT had also suggested an upper limit of Rs 15 lakh on cash holding. In case any person or industry requires holding more cash, it may obtain necessary permission from the Commissioner of Income Tax of the area.

CBDT had earlier clarified that no tax would be collected at source when cash component of the payment for goods and services is less than Rs 2 lakh even if the total consideration is more than this amount. The SIT, headed by Justice M B Shah (retired), last month submitted its fifth report to the Supreme Court on steps needed to curb black money.

The CNX Nifty ended at 8647.60, up by 15.00 points or 0.17% after trading in a range of 8620.90 and 8661.05. There were 23 stocks advancing against 27 stocks declining, while 1 stock remained unchanged. (Provisional)

The top gainers on Nifty were Aurobindo Pharma up by 6.91%, Tata Power up by 2.27%, Maruti Suzuki up by 2.22%, Cipla up by 2.02% and Zee Entertainment up by 1.59%. (Provisional)

On the flip side, Idea Cellular down by 2.97%, Lupin down by 2.31%, Ambuja Cement down by 1.81%, Tata Motors - DVR down by 1.65% and Tata Steel down by 1.47% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 36.73 points or 0.35% to 10,629.61, France’s CAC increased 22.28 points or 0.5% to 4,443.73, while UK’s FTSE 100 decreased 13.38 points or 0.19% to 6,855.13.

Asian equity markets ended mostly lower on Wednesday as traders trod water ahead of a key speech by Federal Reserve boss Janet Yellen this week, while oil suffered fresh losses on persistent glut worries. With speculation growing that US interest rates could rise by the end of the year, Yellen's comments at a global central bankers meeting in Jackson Hole Friday will be scoured for forward guidance on US central bank policy. Chinese shares dropped as fresh liquidity injection from China's central bank through reverse purchase agreements dashed hopes for policy easing. However, Japanese shares rose as the yen traded relatively weaker against the dollar and investors shrugged off North Korea's submarine missile launch. Japan's Prime Minister, Shinzo Abe, said the latest missile launch was ‘unforgivable’ and posed a grave threat to Japan's security.