Post Session: Quick Review

The Indian markets once again showed a sluggish trend on the last trading session of the week, ending the trade in red as investors stayed on the sidelines ahead of a speech by US Federal Reserve chair Janet Yellen in Jackson Hole, Wyoming later in the day. Indian equity benchmarks started the trade slightly in green after domestic rating agency; Indian Credit Rating Agency (ICRA) in its latest report estimated the Gross Domestic Product (GDP) growth to remain flat at 7.2% in the June quarter 2016 under the Gross Value Added (GVA) calculation. The street ignored RBI announcement of much awaited big bang reforms in India’s corporate bond market, giving direct access to foreign investors in the debt-trading platform. Selling crept in early noon deals on report that the India Meteorological Department (IMD) in its monsoon update highlighted that for the country as a whole, cumulative rainfall during this year’s monsoon so far (till 24 August 2016) was 2% below the long period average (LPA). The anxiety among the investors was also increased by the repot that foreign portfolio investors (FPIs) sold shares worth a net Rs 372.08 crore on August 25, 2016. Investors are wary Yellen will hint at a near-term interest rate hike, which could divert some of the massive liquidity that has underpinned emerging markets, after hawkish comments from a slew of other Fed officials recently.

On the global front, Asian shares ended mixed, ahead of speech which could provide hints about the timing of the next rate hike from the Fed. Japan’s core consumer prices fell for a fifth straight month and marked the biggest annual drop in more than three years in July as more firms held back price hikes due to weak consumption, keeping the central bank under pressure to expand an already massive stimulus program. European stocks were mostly down, weighed down by declines in healthcare and retail shares. This was partly offset by gains in basic resources stocks.

Back home, though the benchmarks pared some losses and traded in red, tracking cues from weak European markets. Shares of credit rating agencies like ICRA, CRISIL and Credit Analysis and Research (CARE) were trading firm, on hopes that rating firms may get more business due to the RBI’s new norms on corporate bond markets. Mixed response was displayed in jewellery stocks after the report that exports of gems and jewellery grew 11.7 percent to $11.4 billion during the first four months of the current fiscal, driven largely by demand in major markets such as the US.

The BSE Sensex ended at 27790.67, down by 45.24 points or 0.16% after trading in a range of 27696.99 and 27935.88. There were 11 stocks advancing against 18 stocks declining on the index, while 1 stock remained unchanged. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.14%, while Small cap index was down by 0.16%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.62%, Auto up by 1.01% and Oil & Gas up by 0.65%, while Capital Goods down by 1.25%, IT down by 1.23%, Realty down by 1.11%, TECK down by 0.99% and Bankex down by 0.58% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 3.90%, Reliance Industries up by 1.47%, Asian Paints up by 1.42%, GAIL India up by 1.03% and Cipla up by 0.81%. (Provisional)

On the flip side, Wipro down by 2.98%, Adani Ports & Special Economic zone down by 2.16%, Larsen & Toubro down by 2.12%, Infosys down by 1.50% and SBI down by 1.42% were the top losers. (Provisional)

Meanwhile, despite various concerns, Britain’s decision to leave the European Union (Brexit), has not come in the way of India’s engineering exports to UK, Germany and France. As per the Engineering Exports Promotion Council (EEPC), India mostly defied the general declining trend, giving positive growth to the manufacturing and high-tech exports, as Engineering exports to Britain went up by over 12 per cent to $ 215 million in July from $ 192 million in the same month of the previous year.
Not only Britain, shipments to Germany too improved handsomely, close to $ 200 million, rising by over 19 per cent year on year from $168 million in July 2015. Exports to France increased by 2.29 per cent to $ 86 million from $ 84 million for the period under review.

However, according to EEPC, despite reporting a rise in overall exports for the consecutive two months of May and June 2016, total exports slipped yet again in July contracting by 12.11 percent as against a positive growth by 2.57 percent in the previous month. Cumulative engineering exports continued to decline as engineering exports for the first four months of the current fiscal dropped by 5.82 percent to $ 20.27 billion in April-July 2016-17 from $ 21.53 billion during April-July 2015-16.
Chairman of the EEPC India, TS Bhasin said that, from the engineering exports point of view, it is important to see that our shipments went up to UK despite about 11 per cent trade-weighted drop in prices of Pound Sterling, making Britain's imports expensive. The positive trend to UK and other key European markets comes in the face of an overall negative growth in India's engineering exports.

The CNX Nifty ended at 8573.55, down by 18.65 points or 0.22% after trading in a range of 8547.55 and 8622.95. There were 22 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors - DVR up by 5.22%, Tata Motors up by 4.20%, Bharti Infratel up by 2.30%, Asian Paints up by 1.73% and Reliance Industries up by 1.46%. (Provisional)

On the flip side, Wipro down by 2.76%, HCL Tech down by 2.32%, Bank of Baroda down by 2.13%, Larsen & Toubro down by 1.75% and Idea Cellular down by 1.62% were the top losers. (Provisional)

The European markets were trading mostly in red, Germany’s DAX decreased 14.88 points or 0.14% to 10,514.71 and France’s CAC decreased 2.48 points or 0.06% to 4,404.13, while UK’s FTSE 100 increased 2.82 points or 0.04% to 6,819.72.

Asian equity markets made a mixed closing on Friday, as investors awaited Fed Chair Janet Yellen's Jackson Hole speech later in the day for clues to the timing of the central bank's next rate increase. Japanese shares hit three-week lows as the yen firmed up against the dollar and an official report showed Japan's consumer prices dropped for the fifth straight month in July due mainly to declining crude oil prices. Core consumer prices fell 0.5 percent in July from a year earlier, marking the biggest fall in more than three years. Meanwhile, Chinese shares ended flat as signs of cooling in the housing market as well as receding expectations of aggressive monetary easing dragged down property stocks.