Post Session: Quick Review

Indian equity markets traded on subdued note and in a narrow range throughout the day, ending the session with modest gains, amid caution due to US Fed Chair’s testimony later today, which is expected to provide timing on balance sheet trimming. The street is keeping an eye on corporate earnings for further direction including Tata Consultancy Services scheduled on Thursday and Infosys on Friday. On economy front, investors were awaiting industrial output data for the month of May and retail inflation data of June by the government. 

The equity benchmarks made a positive start and traded in fine fettle in early deals as traders took some encouragement with statement from Revenue Secretary Hasmukh Adhia that the Goods and Services Tax (GST) will help bring down the inflation by one to two percent by the end of this year. He also 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. Meanwhile, Finance minister Arun Jaitley called for more credit disbursement towards the unorganized sector, saying it will help push employment growth. Jaitley said diverting resources of banks and financial institutions through various schemes towards the unorganized sector will help create more jobs in the country. Investors took note that the commerce department instructed various ministries to analyze data and compile lists of products which are being produced domestically but losing market share to imports. India is looking to impose restrictions and standards on products where imports have replaced domestic production, an attempt to give a push to ‘Make in India’ programme and reduce the widening trade gap.

Some pressure crept in during the trade after CRISIL said that the sharp appreciation in the rupee against the dollar in recent months is likely to have dented the first-quarter (current fiscal) profitability of exporters that source locally and have limited pricing power. The rating agency warned that 4% appreciation in the rupee will impact the June quarter sales of exporters by up to 3 percentage points and profits by up to 1.50%.  Separately, the southern states of India are about to face yet another rain deficit year as South West monsoons have come to a standstill for a week after a spectacular beginning for the initial two weeks. Downpours have primarily come to a standstill in states such as Karnataka, Kerala, Maharashtra and Madhya Pradesh.

On the global front, Asian markets closed mixed, as investors across Asia are now looking forward to a raft of economic data coming out on Thursday and Friday. European markets were trading in green as investors look ahead to earnings reports and monitor the latest political developments in the US. Industrial output in the 19 countries sharing the euro currency rose by more than expected in May, aided by a spike in the production of capital goods and consumer durables.

Back home, liquor stocks like Tilaknagar Industries, Globus Spirits, United Breweries, United Spirits and Som Distilleries & Breweries closed in green on Supreme Court clarification that the ban on sale of alcohol within 500 m of any state or national highway will not cover roads within city limits if these lose the highway tag post denotification.

The BSE Sensex ended at 31811.06, up by 63.97 points or 0.20% after trading in a range of 31731.43 and 31865.69. There were 19 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.11%, while Small cap index was up by 0.58%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.57%, Telecom up by 1.43%, PSU up by 1.27%, Energy up by 1.24% and Basic Materials up by 0.74%, while IT down by 0.48% and TECK down by 0.09% were only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 2.24%, ONGC up by 1.59%, SBI up by 1.55%, ICICI Bank up by 1.47% and Tata Motors - DVR up by 1.08%. (Provisional)

On the flip side, TCS down by 1.49%, Mahindra & Mahindra down by 1.03%, HDFC down by 0.58%, Hero MotoCorp down by 0.44% and ITC down by 0.42% were the top losers. (Provisional)

Meanwhile, credit rating agency, ICRA in its latest report has said that the long-term demand outlook for renewable energy sector in India remains strong, on the back of improving cost competitiveness of wind and solar power along with favourable policy support from both Central and state governments. The report further added that a fundamental improvement in the financial position of the distribution utilities remains important in the long run, which is dependent upon their ability to curtail distribution loss levels in line with targets and tariff adequacy.

According to the report the reasons of improvement in cost competitiveness of wind and solar power are - competitive bidding process and a significant fall in photovoltaics (PV) module price levels over the last three year-period for solar players. However, the rating agency said that the sector continues to face regulatory challenges related to Renewable Purchase Obligation (RPO) norms and its compliance, continuing delays in payments from distribution utilities and risk of forced back down by the utilities in a few states.

ICRA study further expects an addition of 7-7.5 GW in solar capacity in the current financial year owing to the strong pipeline of projects awarded in the last 12-month period, while about the wind energy segment capacity addition, it said that in the near term, it will be critically dependent upon the finalisation of bidding plans by distribution utilities and the Ministry of New and Renewable Energy.

The CNX Nifty ended at 9822.75, up by 36.70 points or 0.38% after trading in a range of 9787.70 and 9824.95. There were 37 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were ACC up by 3.16%, Bharti Infratel up by 2.71%, Ambuja Cement up by 2.37%, Indiabulls Housing up by 2.32% and Hindustan Unilever up by 2.30%. (Provisional)

On the flip side, TCS down by 1.41%, Mahindra & Mahindra down by 1.02%, Hero MotoCorp down by 0.72%, Aurobindo Pharma down by 0.71% and Coal India down by 0.39% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 60.93 points or 0.83% to 7,390.69, Germany’s DAX increased 69.34 points or 0.56% to 12,506.36 and France’s CAC increased 44.59 points or 0.87% to 5,185.19.

Asian equity markets closed mixed on Wednesday, as the dollar weakened against the yen after the release of emails by US President Donald Trump's son that cited Russian support for his father's 2016 presidential campaign. Underlying sentiment remained somewhat cautious ahead of Federal Reserve Chair Janet Yellen's Congressional testimony later in the day and on Thursday. Meanwhile, a fresh rally in oil prices boosted energy stocks. Japanese shares ended lower as the yen strengthened in the wake of a fresh twist in the Trump campaign's alleged links with Russia.