Indian benchmarks give up the gains in final hours to close flat

Indian equity markets showed a volte-face on Thursday as what started on a confident note ended as a dismal show. The optimism in domestic markets petered out completely by the end of trade, tracking weak trend seen in European markets, while investors also took cues from the minutes of Reserve Bank of India's (RBI) June policy meeting. The central bank’s monetary policy committee wants more evidence that inflation has sustainably fallen below its target before deciding whether to lower interest rates. RBI voted 5-1 to keep the repo rate at 6.25% earlier this month, but issued a slightly less hawkish statement after consumer inflation eased to 2.99% in April, below its 4% target. Adding the cautiousness among investors, Union Urban Development Minister Venkaiah Naidu said loan waiver has become fashion now and should be waived in extreme situations only.

Marketmen were optimistic for most part of the session, as sentiments remained upbeat with the report that economic think-tank NCAER revised up its projection for the country's economic growth to 7.6% for the current fiscal, compared with the earlier prediction of 7.3% on forecast of normal monsoon. In its quarterly review of the economy, NCAER said prospects for the agricultural sector in 2017-18 remain optimistic on forecast of good rains. The agency has also revised upward its forecast of GVA (Gross Value Added at Basic Prices) growth at 7.3% for 2017-18 from its February estimate of 7%. However, the sanguinity in local markets was under check, as profit booking in metal and Real Estate counters exerted downside pressure on the frontline indices and dragged them even below to the psychological 9,650 (Nifty) and 31,300 (Sensex) levels. Moreover, the broader markets too succumbed to the selling pressure and went home with cuts of over half a percent. In a key decision, the market regulator SEBI banned participatory notes (p-notes) from taking naked positions in the derivatives segment, and eased the entry process for foreign portfolio investors (FPIs). It also removed the one-year lock-in requirement for private equity investors registered as alternative investment funds (AIFs) in initial public offerings (IPOs).

On the global front, Asian markets ended mostly higher on Thursday, as oil prices held steady in Asian deals after falling more than 2 percent overnight on worries over whether OPEC-led output cuts would be able to rein in a three-year glut. The market largely shrugged off comments overnight from Iran's oil minister that members of the Organization of Petroleum Exporting Countries (OPEC) are considering deeper cuts in production. Further, Chinese shares added to gains made on Wednesday after MSCI included mainland shares in its emerging market indexes. Meanwhile, European markets got off to a gap down opening and were trading with cuts of over half a percent.

Back home, the market breadth remained pessimistic, as there were 1115 shares on the gaining side against 1545 shares on the losing side, while 158 shares remained unchanged.

Finally, the BSE Sensex gained 7.10 points or 0.02% to 31290.74, while the CNX Nifty was down by 3.60 points or 0.04% to 9,630.00. 

The BSE Sensex touched a high and a low of 31522.87 and 31255.63, respectively and there were 12 stocks on gainers side as against 19 stocks on the losers side on the index.

The broader indices ended in red; the BSE Mid cap index declined 0.59%, while Small cap index was down by 0.55%.

The only gaining sectoral indices on the BSE were Bankex up by 0.16% and Telecom up by 0.02%, while Oil & Gas down by 1.79%, Realty down by 1.73%, Metal down by 1.35%, Utilities down by 1.23% and PSU down by 1.21% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.03%, SBI up by 1.50%, HDFC up by 1.41%, Reliance Industries up by 1.06% and Bajaj Auto up by 1.02%. On the flip side, ONGC down by 2.82%, Hindustan Unilever down by 2.62%, Lupin down by 2.49%, Power Grid down by 2.11% and Dr. Reddy’s Lab down by 2.05% were the top losers.

Meanwhile, Department of Industrial Policy and Promotion (DIPP), under the Commerce and Industry Ministry, has formed six groups for preparing a framework for the country’s new industrial policy that includes several areas like ways to encourage innovation, further simplification of taxation system and address new challenges of the manufacturing sector.

Apart from this, the groups would also prepare reports on infrastructure, intellectual property rights (IPRs), ease of doing business and employability of future workforce. Members of these groups include government officials, academicians and representatives of professional firms. The draft of the policy should be ready by September this year.

The new policy aims at aligning with the government’s flagship programmes such as Make in India, Skill India, Startup India and the foreign direct investment norms. With the changing manufacturing scenario and introduction of Industrial Revolution 4.0, there is a need to completely revamp the industrial policy of 1991. Industrial Revolution 4.0 means use of modern technologies, artificial intelligence and robotics in manufacturing.

The CNX Nifty traded in a range of 9,698.85 and 9,617.75. There were 22 stocks in green as against 29 stocks in red on the index.

The top gainers on Nifty were Sun Pharma up by 2%, Aurobindo Pharma up by 1.53%, HDFC up by 1.34%, Ambuja Cement up by 1.31% and ZEEL up by 1.28%. On the flip side, IOC down by 3.69%, Lupin down by 2.74%, Hindalco down by 2.67%, ONGC down by 2.58% and Gail down by 2.06% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 33.02 points or 0.44% to 7,414.77, Germany’s DAX decreased 35.75 points or 0.28% to 12,738.51 and France’s CAC decreased 28.69 points or 0.54% to 5,245.57.

Asian stocks closed mixed on Thursday as oil prices held steady in Asian deals after falling more than 2 percent overnight on worries over whether OPEC-led output cuts would be able to rein in a three-year glut. Chinese shares ended lower as the initial euphoria over MSCI's decision to include China's so-called A-shares in its emerging-markets index faded. Further, Japanese shares ended lower as the dollar edged away from a three-week high versus the yen.