Post Session: Quick Review

Indian equity markets traded on a firm note throughout the day and ended the session with gains of around three tenth of a percent. Nifty ended the session at almost record close whereby the earlier record closing level was 9675.1. The equity benchmarks made a positive start and traded with traction in early deals taking support from International Monetary Fund’s (IMF’s) statement that India’s growth outlook has improved as the impact of last year’s demonetization exercise seems to be fading and recent key structural reforms continue to pay off. Separately, a private report highlighted that Indian economy is expected to recover in the coming quarters and the country is expected to clock a real GDP growth of 6.9 per cent in this financial year. The report noted that the negative effects from the demonetization measure is already wearing off, and the Indian economy will likely benefit from positive demographic trends, greater external stability (due to improved terms of trade from low oil prices), and continued reforms that should help to improve the country’s admittedly poor business environment.

Further, the study done by ASSOCHAM-Ashvin Parekh Advisory Services showed that the industry is expected to contribute $280 billion to India’s GDP in eight to nine years due to a positive fallout of the Goods and Services Tax (GST) as structural changes in the ease of doing business will propel growth. Describing the GST, in the short-term, as a mini budget short of projection of estimated revenue, the study paper said most businesses would be able to get significantly more credits under the new indirect tax regime, leading to a benefit for most of them. Meanwhile, expressing happiness over the smooth rollout of the recently launched GST, Finance Minister Arun Jaitley has said that although the government had factored in a huge amount of disruption, the switchover to GST has been smoother than anticipated and noted that implementation of new tax regime along with last year’s demonetization move would increase the tax base ratio over a period of time.

On the global front, Asian markets closed mostly in red, after minutes from the Federal Reserve’s last meeting showed a lack of consensus on the future pace of US interest rate increases, while oil prices inched higher following a steep decline a day earlier. Trading in Asia has been buffeted this week by tensions on the Korean peninsula after North Korea fired a missile, which US officials concluded was an intercontinental ballistic missile, into Japanese waters. The Europe markets were trading in red. Foreign demand helped German industrial orders rebound in May, albeit less than forecast.

The BSE Sensex ended at 31346.68, up by 101.12 points or 0.32% after trading in a range of 31264.86 and 31460.70. There were 16 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.18%, while Small cap index was up by 0.28%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.56%, Telecom up by 1.19%, FMCG up by 0.85%, PSU up by 0.60% and Industrials up by 0.34%, while Oil & Gas down by 0.50%, Consumer Durables down by 0.43%, Utilities down by 0.28%, IT down by 0.28% and Power down by 0.14% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 2.18%, ITC up by 1.87%, Coal India up by 1.62%, Bharti Airtel up by 1.41% and Maruti Suzuki up by 1.40%. (Provisional)

On the flip side, Bajaj Auto down by 1.68%, Mahindra & Mahindra down by 1.30%, Axis Bank down by 0.93%, Sun Pharma down by 0.84% and ONGC down by 0.71% were the top losers. (Provisional)

Meanwhile, the Center for International Development (CID) at Harvard University, in its latest report on ‘global growth projections’, mentioned India of remaining ahead of China in the economic pole of global growth and has said that the country is likely to continue this trend over the coming decade owing to the government’s rapid growth prospects.

The report further said that India along with Uganda top the list of the fastest growing economies to 2025, at 7.7 percent annually. The CID report further listed the country’s efforts towards growth, saying that India has diversified its export base by including more complex sectors, such as chemicals, vehicles & certain electronics and going forward, the country is well positioned to continue diversifying into new areas given the capabilities accumulated to date.

As per report, while the major oil economies are experiencing the pitfalls of their reliance on one resource, India, Indonesia, and Vietnam have accumulated new capabilities that allow for more diverse and more complex production, which may lead to the faster growth in the coming years. Though, the report also warned of a continued slowdown in global growth over the coming decade.

The CNX Nifty ended at 9669.05, up by 31.45 points or 0.33% after trading in a range of 9639.95 and 9700.70. There were 26 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 2.96%, SBI up by 2.22%, Indiabulls Housing up by 1.92%, ITC up by 1.83% and Coal India up by 1.60%. (Provisional)

On the flip side, Bajaj Auto down by 1.60%, Indian Oil Corporation down by 1.27%, Hindalco down by 1.16%, Mahindra & Mahindra down by 1.01% and Axis Bank down by 0.87% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 29.3 points or 0.4% to 7,338.30, Germany’s DAX decreased 80.49 points or 0.65% to 12,373.19 and France’s CAC decreased 44.42 points or 0.86% to 5,135.68.

Asian equity markets ended mostly in red on Thursday as oil prices resumed a downtrend and minutes from the Federal Reserve's last meeting showed a lack of consensus among members over when to start reducing the Fed's securities portfolio. Fed officials were determined to continue raise interest rates even with muted inflation levels, but they were divided in their opinions on the future pace of US interest rate increases, the minutes showed. Investors awaited cues from this week's G20 summit and Friday's US jobs report for further direction. Japanese shares ended lower on a stronger yen amid rising geopolitical tensions on the Korean peninsula. Further, China stocks inched up, helped by strong gains in resource firms on expectations of robust mid-year earnings.