Post Session: Quick Review

Indian equity markets traded in a narrow range throughout the day and ended the session with modest gains. Broader markets outperform benchmarks in today’s trade. The market breath was in favour of advances. The equity benchmarks made a flat-to-cautious start in early deals on geopolitical worries. Traders took support after Fitch in its latest report said that the newly launched one nation one tax, namely Goods and Services Tax (GST) is likely to remove domestic trade barriers and will boost revenue indirectly over the long term as it supports Gross Domestic Product (GDP) growth and encourages tax compliance. The US-based credit rating agency also said that the unified national system should offer significant opportunities for productivity and added that it will become much quicker and less costly to move goods across the country now that trucks will not be held up at checkpoints at state borders. Besides, the Nikkei India Services Purchasing Managers’ Index, or PMI, rose to an eight-month high of 53.1 in June as a solid and accelerated upturn in new work resulted in a faster increase in activity. May’s figure was 52.2. The report enlightened that with services being the prevalent sector in India, the fainter rise in manufacturing was more than offset and growth of private sector output climbed to an eight-month peak. Separately, global and domestic private equity funds have pumped in around $11.3 billion in the country for the first half of the current year ending June 30, making it the record highest foreign direct investment into the country.

On the global front, Asian markets closed mostly in green, amid geopolitical concerns due to tensions on the Korean peninsula. Japan’s corporate tax revenue fell to 10.3 trillion yen ($90 billion) for the last fiscal year, the lowest since fiscal 2012 when Prime Minister Shinzo Abe swept to power with a pledge to revive the moribund economy. The European markets were trading mostly in red as Independence Day celebrations in the US kept trading activity muted across the world and geopolitical tensions continue to heat up. Euro zone businesses lost some momentum in June but chalked up their best performance last quarter in over six years, according to surveys that showed companies started the second half of 2017 in rude health.

Back home, select liquor stocks closed on firm note in response to the Supreme Court (SC) ruling that states can de-notify national highways (NHs) and state highways (SHs) if they are within city limits, bringing relief to the industry. Shares of ABC Bearings and Timken India closed on firm note after Timken India announced that it has entered into a definitive agreement to acquire ABC through a court-approved amalgamation process. Shareholders will receive 5 shares of Timken India for every 8 shares of ABC Bearings. On the other hand, Bharti Airtel and Idea Cellular were under pressure taking cues from the foreign brokerage report that Reliance Jio is likely to launch its much-awaited 4G VoLTE feature phone within this month, putting the price at as low as Rs 500, a move which could bring in another wave of disruption in the telecom market. The launch - which some believe could be announced at parent Reliance Industries’ annual general meeting on July 21 - would follow Jio’s likely announcement of a new tariff plan with aggressive price-points over the next couple of days with its 84-day Dhan Dhan offer.

The BSE Sensex ended at 31258.45, up by 48.66 points or 0.16% after trading in a range of 31177.78 and 31284.64. There were 20 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.04%, while Small cap index was up by 1.13%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.48%, Basic Materials up by 1.35%, Metal up by 1.24%, Industrials up by 1.05% and Energy up by 0.98%, while FMCG down by 0.51%, IT down by 0.42% and TECK down by 0.24% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Lupin up by 3.82%, Mahindra & Mahindra up by 2.20%, ONGC up by 2.00%, Asian Paints up by 1.82% and Axis Bank up by 1.49%. (Provisional)

On the flip side, ITC down by 1.51%, Wipro down by 1.10%, Infosys down by 0.94%, HDFC down by 0.73% and Bharti Airtel down by 0.66% were the top losers. (Provisional)

Meanwhile, on the back of accelerated and solid upturn in new work orders, activity in India's dominant service sector rose to an eight-month high in the month of June. The seasonally adjusted Nikkei Services Business Activity Index rose above the watershed ‘50’ mark for the fifth month running in June, registering reading at 53.1 in June as against the previous month's 52.2. The Nikkei India Composite PMI Output Index which measures both manufacturing and services also rose to an eight-month high of 52.7 in June from 52.5 in May.

As per the survey report, inflows of new business in services companies grew strongly in June due to improved demand conditions and marketing efforts. Factory orders also increased, but at the weakest rate in four months. Furthermore, employment across the services sector rose modestly but at a rate that equaled May’s near four-year peak, while manufacturing jobs increased fractionally.

On the inflation front, the survey highlighted that inflationary pressures gathered speed in June month, with both input costs and output charges rising at quicker rates. Average cost burdens at services firms accelerated to a 3-month high, driven by higher prices of food and fuel and purchase costs at manufacturers rose at the slowest rate since last August. Going forward the output is expected by services firms to remain on an upward trajectory in the coming 12 months, on the back of better market conditions, the introduction of the goods & services tax and promotional activities.

The CNX Nifty ended at 9641.35, up by 28.05 points or 0.29% after trading in a range of 9607.35 and 9643.65. There were 38 stocks advancing against 13 stocks declining on the index. (Provisional)

The top gainers on Nifty were Lupin up by 3.87%, Vedanta up by 2.35%, Asian Paints up by 2.12%, Mahindra & Mahindra up by 2.06% and ONGC up by 1.94%. (Provisional)

On the flip side, ITC down by 1.56%, Infosys down by 1.17%, Wipro down by 0.92%, Bharti Airtel down by 0.70% and HDFC down by 0.65% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 8.96 points or 0.12% to 7,348.27, Germany’s DAX decreased 2.9 points or 0.02% to 12,434.23, while France’s CAC increased 5.04 points or 0.1% to 5,179.94.

Asian equity markets ended mostly in green on Wednesday as investors shrugged off geopolitical worries and looked ahead to the release of minutes of the Fed's June meeting later in the day and the outcome of G20 summit, beginning Friday in Germany. Japanese shares ended modestly higher as the yen pared early gains and a private survey showed activity in Japan's services sector expanded at a faster rate in June. Further, Chinese shares ended higher after the announcement on allowing foreign investment in the Chinese bond market. Investors shrugged off the latest survey from Caixin showing that growth in China's services sector slowed in June. The PMI dropped to 51.6 from 52.8 in May.