Post Session: Quick Review

Benchmarks continued their winning run for the third straight session, amid widespread gains on sustained fund flows. The sentiment was largely bolstered on sustained foreign fund inflows and persistent buying by domestic financial institutions as well as retail investors. Indian equity benchmarks made a positive start taking encouragement from FICCI survey that India’s economy is likely to expand 7.8% during the current financial year on the back of good monsoons. The estimated median GVA (gross value added) growth for Q1 FY17 has been put at 7.6%. Meanwhile, with inflation likely to moderate following a good monsoon, Finance Minister Arun Jaitley stated that it is logical to hope for a rate cut by Reserve Bank of India (RBI) though the actual decision will have to be taken by the central bank. Buoyed by the monsoon progress, the minister exuded confidence that India can achieve a 9-10 percent growth rate with a supportive global economic environment. Inviting foreign investment, Jaitley added that new legislations such as Goods and Services Tax (GST) along with structural reforms in the last two years will boost growth and the overall development of the country. Minor selling crept after rupee weakened against the dollar at the Interbank Foreign Exchange market on month-end demand for the American currency from importers. The dollar’s strength against some other currencies overseas also weighed on the rupee but a strong domestic equity market capped the losses.

On the global front, Asian shares ended mixed, with Japanese shares ending higher despite sluggish domestic data that increased the prospect of further easing by the Bank of Japan. Growth in Japan’s industrial output ground to a halt in July after June’s gains, underscoring the fragility of factory activity and the continuing challenge to policymakers grappling with a stalling economy. European stocks were steady to lower, after upbeat German retail sales data, as investors remained cautious ahead of the release of a US jobs report due later in the day.

Back home, PSU Banking stock displayed mixed performance with RBI Deputy Governor N S Vishwanathan stated that Indian banks got into stress before implementation of Basel III and revised IFRS which provide protection against system level stresses. Reserve Bank of India (RBI) has made a strong case for providing more capital to PSBs in order to deal with the problem of stressed assets and get back to a position from where public sector banks (PSBs) can start generating internal accruals.

The BSE Sensex ended at 28436.26, up by 93.25 points or 0.33% after trading in a range of 28363.10 and 28532.25. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.38%, while Small cap index was up by 0.18%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 1.28%, Bankex up by 1.15%, Consumer Durables up by 0.70%, Auto up by 0.31% and FMCG up by 0.24% while, Metal down by 1.38%, Realty down by 0.94%, IT down by 0.47%, PSU down by 0.16% and Oil & Gas down by 0.15% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 2.59%, Hero MotoCorp up by 1.84%, Tata Motors up by 1.82%, HDFC Bank up by 1.46% and ITC up by 1.44%. (Provisional)

On the flip side, Tata Steel down by 1.87%, Reliance Industries down by 1.72%, Lupin down by 1.62%, TCS down by 1.56% and ONGC down by 1.45% were the top losers. (Provisional)

Meanwhile, the standing finance committee (SFC) has cleared 16 highway projects worth Rs 7,456.88 crore to construct 622 km of roads in 11 states. The projects are situated in states of Maharashtra, Odisha, West Bengal, Andhra Pradesh, Gujarat, Chhattisgarh, Haryana, Uttarakhand, Arunachal Pradesh, Assam and Sikkim.

Of the approved 16 projects, two projects will be built on Hybrid Annuity Model (HAM), 13 on Engineering, Procurement and Construction (EPC) Model and remaining one on Build Operate and Transfer (BOT) Annuity Model. Road Transport and Highways Secretary Sanjay Mitra has stated that projects would be bid out shortly, while work on them would start after acquisition of 90 per cent land.

Mitra further said that two of the projects pertained to Char Dham Yatra connectivity in Uttarakhand on EPC mode. These include Rs 248 crore and Rs 200 crore projects for geometric improvement and widening of stretches on National Highway (NH) 58. The two projects to be built on hybrid annuity mode (HBA) include Rs 905 crore and Rs 1,338 crore worth of projects in Maharashtra for upgradation of NH 66 stretches under National Highways Development Project (NHDP) phase IV. The BOT project pertained to four laning of Haryana/Punjab border Jind section of NH 71 design, BOT mode.

In HAM model the government will contribute 40% of the project cost in the first five years through annual payments (annuity). The remaining payment will be made on the basis of the assets created and the performance of the developer, in EPC model the cost is completely borne by the government. Government invites bids for engineering knowledge from the private players, while in BOT model a road developer constructs the road and he is allowed to recover his investment through toll collection.

The CNX Nifty ended at 8783.30, up by 38.95 points or 0.45% after trading in a range of 8754.05 and 8819.20. There were 27 stocks advancing against 24 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 3.53%, Kotak Mahindra Bank up by 2.91%, Larsen & Toubro up by 2.39%, Ambuja Cement up by 2.24% and Tata Power up by 2.20%. (Provisional)

On the flip side, Bosch down by 2.57%, Hindalco down by 2.30%, Tata Steel down by 1.96%, ONGC down by 1.84% and Lupin down by 1.77% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 2.38 points or 0.03% to 6,818.41, Germany’s DAX decreased 12.5 points or 0.12% to 10,645.14, while France’s CAC increased 26.91 points or 0.6% to 4,484.40.

Asian equity markets made a mixed closing on Wednesday, as oil prices slipped on a stronger dollar and Fed Vice Chair Stanley Fischer's upbeat assessment of the US economy made it clear that a rate hike would be possible at the Fed's next policy meeting in September. Traders turned their attention on the all-important US jobs data due Friday after a run of strong economic data and hawkish comments from several Federal Reserve officials. The Malaysian markets were closed for the National Day holiday. Meanwhile, Japanese shares ended higher as the yen weakened and disappointing industrial output data underscored the need for more stimulus measures.