Post Session: Quick Review

Paring most of their initial gains, Indian equity markets ended the session with modest gains. The last hour of trade, however, dragged equity benchmarks to erase gains due to profit booking but still managed to end at fresh record closing highs. NSE Nifty breached 9,800 points for the first time as trading turned normal a day after a major technical disruption. The equity benchmarks made a gap-up opening and traded jubilantly in early deals taking support on account of short covering after SEBI put in place restrictions on Foreign Portfolio Investors from issuing participatory notes (P-Notes) where the underlying asset is a derivative. The new norms announced by the capital markets regulator say that participatory notes against equity derivatives are not allowed if not for hedging. In cases where the derivatives positions are not for the purpose of hedging the equity shares, FPIs have to liquidate the holdings latest by date or maturity or by December 31, 2020, whichever is earlier. Investors took note of India Meteorological Department’s (IMD) statement that the seasonal monsoon rains have covered most of India and the amount of precipitation so far is within expectations, raising hopes for higher farm output after increased sowing of rice and soybean crops.

Meanwhile, Revenue Secretary Hasmukh Adhia enlightened that the Goods and Services Tax (GST) will help bring down the inflation by one to two per cent by the end of this year. The secretary said that the government’s objective is to ensure that inflation does not increase, and added that the government has tried to keep items frequently used by the consumers under the lower tax bracket. Separately, the government has saved a whopping Rs 57,000 crore with its Direct Benefit Transfer (DBT) scheme under which subsidies are given directly to beneficiaries. According to government data, of the Rs 57,029 crore saved under DBT in 2016-17, the LPG subsidy scheme ‘Pahal’ accounted for Rs 29,769 crore. The DBT programme, a major reform initiative to check graft in welfare funds, was launched by the UPA government on January 1, 2013.

On the global front, Asian markets closed mostly in green as investors’ awaited testimony from Federal Reserve Chair Janet Yellen. South Korean finance ministry said that weak private consumption and tepid employment growth are holding back the country’s economy even as exports steadily gain. May retail sales declined 0.9 percent from April while the consumer price index gained 1.9 percent year-on-year in June, cooling from 2 percent in July and pointing to a slower-than-expected recovery in domestic demand. Despite opening with gains across the board, European stocks ran out of fuel and traded mostly in red, as markets kept an eye out for appearances from central bank members on both sides of the Atlantic.

Back home, most of the sugar stocks closed in green after the government increased import duty on sugar to 50% to curb dumping of the commodity in India as international prices fell. Cheaper imports have been adversely affecting domestic sugar mills.

The BSE Sensex ended at 31753.41, up by 37.77 points or 0.12% after trading in a range of 31718.48 and 31885.11. There were 16 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.79%, while Small cap index was down by 0.56%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.09%, Auto up by 0.87%, TECK up by 0.49%, Capital Goods up by 0.43% and Power up by 0.28%, while Telecom down by 1.84%, Realty down by 1.68%, Consumer Durables down by 0.87%, Healthcare down by 0.68% and FMCG down by 0.53% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 2.42%, Bajaj Auto up by 2.36%, Infosys up by 1.87%, NTPC up by 1.84% and Mahindra & Mahindra up by 1.77%. (Provisional)

On the flip side, Bharti Airtel down by 2.59%, Cipla down by 1.90%, Dr. Reddy’s Lab down by 1.86%, Coal India down by 1.62% and Wipro down by 1.58% were the top losers. (Provisional)

Meanwhile, with an aim to protect the domestic steel industry against cheap imports, the government is likely to impose countervailing duty of 18.95 per cent on imports of certain kind of flat steel products exported from China. 

The Directorate General of Anti-Dumping and Allied Duties (DGAD) which is an investigative arm of the commerce ministry, in its final findings, said that the domestic industry has lost sales opportunities despite sufficient demand in the country and capacities, due to the subsidised imports from China. Jindal Stainless along with Jindal Stainless (Hisar) had filed the application for initiation of anti-subsidy/countervailing duty investigation.

DGAD further in order to remove the injury to the domestic industry has suggested that the duty should be the difference between the quantum of countervailing duty proposed (which is 18.95 per cent) and anti-dumping duty payable, if any pointing that there is a significant difference between the prices offered by the domestic industry and foreign producers.

The CNX Nifty ended at 9785.85, up by 14.80 points or 0.15% after trading in a range of 9778.85 and 9830.05. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Auto up by 2.47%, BPCL up by 2.30%, Hindalco up by 2.27%, Infosys up by 2.25% and Tata Motors up by 2.15%. (Provisional)

On the flip side, Bharti Airtel down by 2.77%, Bank of Baroda down by 2.67%, Cipla down by 1.77%, Wipro down by 1.58% and Aurobindo Pharma down by 1.47% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 59.46 points or 0.81% to 7,310.57, France’s CAC decreased 4.49 points or 0.09% to 5,161.15, while Germany’s DAX increased 26.82 points or 0.22% to 12,472.74.

Asian equity markets ended mostly in green on Tuesday as investors awaited cues from the US corporate earnings season as well as Federal Reserve Chair Janet Yellen's semi-annual testimony before Congress on Wednesday and Thursday. Japanese shares rose to finish near two-week highs as the dollar hit a four-month high versus the yen, helping bolster exporters' shares. Tech shares also witnessed good buying following the strong Nasdaq performance overnight. Meanwhile, Chinese shares ended slightly lower amid selling in small-cap stocks on concerns over tight liquidity conditions.