Indian equities end a lackluster session with moderate cut

The penultimate day of June series futures and options contract expiry turned out to be a disappointing session for the Indian equity indices, as they went on to extend the declining streak for the third successive session and settled below the psychological 9,500 (Nifty) and 30,900 (Sensex) levels. The session largely remained characterized by choppiness, as the aimless indices moved only sideways in a tight band, lacking any significant upside triggers. Trading Sentiments were undermined after global credit rating agency Fitch maintained its negative outlook on Indian banks because of erosion of the sector's core capitalization, even as they enter the final phase of Basel III migration. This is based on its assessment that the sector's core capitalization, which has been eroded in the last few years, will remain challenged unless it is boosted by adequate capital support from the authorities or equity raising from capital markets. Further, negative opening of European markets and ongoing weakness in other Asian markets, after Wall Street was knocked hard in the wake of a delay to a US healthcare reform vote, also spoiled investors' sentiments. Some weakness also came with Finance Minister Arun Jaitley's statement that people may have to face some difficulty initially during the Goods and Services Tax (GST) is rolled out, but in the long run the new indirect tax regime would help cut tax evasion and check price rise. He also said that the GST Council will look at bringing real estate within the GST net by next year and revisit taxing of petroleum products under the new regime in 1-2 years. However, the broader markets showed some resilience and settled on a positive note, outperforming their larger peers by quite a margin. Market participants got some confidence with Union Power Minister Piyush Goyal’s statement that the GST will reduce the work of businesses by reducing the number of taxes from 11 to one. He added that the Goods and Services Tax Network (GSTN) will make filing returns and make book keeping very easy.

On the global front, Asian equity markets ended in red on Wednesday, as the US Senate's move to delay a vote on healthcare bill until after next week's July 4 holiday triggered concerns whether the Trump administration will be able to deliver pledged tax cuts and infrastructure spending. In her first public appearance since the US Federal Reserve hiked rates on June 14, Fed Chair Janet Yellen reiterated that the US central bank would continue to raise interest rates only gradually. She also said that she does not believe that there will be another financial crisis for at least as long as she lives, thanks largely to reforms of the banking system since the 2007-09 crash. Further, Chinese shares edged lower as comments by Premier Li Keqiang raised concerns over an economic slowdown and regulatory tightening. The Indonesian market remained closed for the Eid-ul-Fitr holiday. Meanwhile, European stocks dropped in early trade, pulled down by a rising euro, which looked headed for its highest level in a year on worries the European Central Bank may start winding down monetary stimulus.

Back home, the market breadth remained pessimistic, as there were 1276 shares on the gaining side against 1332 shares on the losing side, while 181 shares remained unchanged.

Finally, the BSE Sensex declined 123.93 points or 0.40% to 30834.32, while the CNX Nifty was down by 20.15 points or 0.21% to 9,491.25. 

The BSE Sensex touched a high and a low of 31000.48 and 30798.70, respectively and there were 15 stocks on gainers side as against 16 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.23%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Metal up by 1.62%, Telecom up by 1.11%, Basic Materials up by 0.77%, Power up by 0.64% and Realty up by 0.56%, while Energy down by 1.37%, Consumer Durables down by 1.22%, Oil & Gas down by 0.79%, FMCG down by 0.67% and Capital Goods down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.85%, Bharti Airtel up by 1.49%, Wipro up by 1.17%, Power Grid up by 1.05% and ICICI Bank up by 1.02%. On the flip side, Reliance Industries down by 2.60%, Asian Paints down by 2.12%, HDFC down by 1.38%, ONGC down by 1.13% and ITC down by 1.12% were the top losers.

Meanwhile, Union Minister of Shipping and Road Transport and Highways Nitin Gadkari has said that the government is working on a cruise tourism policy which will be announced next month with an intent to tap India’s vast potential on this front and attract more vessels. He also asserted that at present, India attracts nearly 70 cruise vessels a year and the number is expected to go up 10-fold to 700 with this initiative. He also expressed his hopes that next year is going to be very good for cruise tourism in India.

Gadkari has said that the action plan will be ready in the next three months that includes key steps on par with international standards, simplification of procedures, easy immigration and ways to make India a global hotspot. He also said that steps are already being undertaken to boost infrastructure that include building cruise terminals at five major ports --Mumbai, Goa, New Mangalore, Chennai and Cochin. In addition, he disclosed that modern cruise terminals being developed at ports will include hospitality, retail, shopping and restaurants, adding that about 200 minor ports will develop jetties for such cruise vessels. He explained that cruise tourism is a great means for bringing foreign exchange from overseas travellers to India. He added that cruise tourists contribute handsomely to local economies and has the potential to be a driver of growth for the areas touched by it.

Listing out various policy initiatives for promoting cruise shipping, the Minister said that ships are now allowed to stay for 3 days, up from the earlier 24 hours, and rules have been simplified to attract more vessels. He also said that easier standard operating procedure (SOP) for cruise operations involving multiple agencies has already been issued. Apart from this, he noted that the government has allowed foreign flag vessels carrying passengers to call at Indian ports without securing a licence from the director general of shipping till February 5, 2024.

The CNX Nifty traded in a range of 9,522.50 and 9,474.35. There were 28 stocks in green as against 23 stocks in red on the index.

The top gainers on Nifty were Tech Mahindra up by 3.13%, Yes Bank up by 2.43%, Ambuja Cements up by 2.26%, Tata Steel up by 2.16% and Vedanta up by 2.07%. On the flip side, Reliance Industries down by 2.60%, Asian Paints down by 2.13%, HDFC down by 1.64%, ZEEL down by 1.57% and ONGC down by 1.38% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 0.44 points or 0.01% to 7,433.92, Germany’s DAX decreased 60.02 points or 0.47% to 12,611.00 and France’s CAC decreased 15.08 points or 0.29% to 5,243.50.

Asian equity markets ended in red on Wednesday as the US Senate's move to delay a vote on healthcare bill until after next week's July 4 holiday triggered concerns whether the Trump administration will be able to deliver pledged tax cuts and infrastructure spending. The euro hit a one-year high as digested hawkish comments from ECB President Mario Draghi that the central bank could trim its stimulus this year. The dollar was little changed versus the yen while crude prices were lower ahead of weekly inventory data from the US due later in the day. Japanese shares fell, dragged down by tech shares, after EU regulators fined Google a record 2.4 billion euros ($2.7 billion) for violating antitrust rules and a massive global cyber-attack hit IT systems across multiple geographies and business units. On the economic front, Japan's small business confidence improved for the second straight month in June, though slightly, survey data from Shoko Chukin Bank showed today. Further, Chinese shares ended lower as comments by Premier Li Keqiang raised concerns over an economic slowdown and regulatory tightening. The Indonesian market remained closed for the Eid-ul-Fitr holiday.