Post Session: Quick Review

Indian equity markets traded on a firm note throughout the day and ended the session with gains of over seven tenth of a percent. Bulls retained full charge over Dalal Street with BSE Sensex surpassing 32,000 for the first time, while Nifty shy of 9,900 mark. The street is keeping an eye on corporate earnings for further direction including Tata Consultancy Services to be announced later in the day and Infosys on Friday. The equity benchmarks made a gap-up opening in early deals as traders took encouragement on account of a sharp drop in retail inflation in June and dovish comments from US Fed Chair Janet Yellen in her testimony before the US Congress, where she hinted at slower-than-expected rate hikes going ahead. Falling growth in industrial production as well as falling retail inflation gives the Reserve Bank of India just the leeway to cut policy rates in August. Traders also took support after the largest oil producing bloc OPEC in its monthly report highlighted that India’s economic growth will accelerate to 7.5% in the next year 2018, widening the lead over China, whose economic expansion will slow further to 6.2%. Separately, ratings agency Fitch enlightened that the global sovereign credit cycle is likely to turn less negative in 2017 as the global GDP growth forecast for 2017 and 2018 had improved. The ratings agency added that the rating outlook trend has turned positive in developing markets and expects the median emerging market current account deficit to improve slightly to 2.9 per cent of GDP in 2017.

Meanwhile, Foreign Portfolio Investors (FPIs) have poured a record $15.86 billion into Indian debt so far this calendar year, according to data available till July 11. This is the highest amount of net inflows into Indian debt on a year-to-date basis. Compared to this, the last year had witnessed a net outflow of $1.72 billion in the same period. Investors took note that the first set of numbers after the rollout of the goods and services tax would calm any jitters about its prospects. Integrated goods and services tax (IGST) collections on imports in the first 10 days of the new regime crossed Rs 4,000 crore, in line with expectation and suggests that the rollout has been largely smooth. Separately, industry body PHDCCI said that the share of India’s total exports to top 10 destinations worldwide has increased to 51.6% in 2016-17, compared to 49% in 2013-14. The country's merchandise exports to the US grew from $39.14 billion in 2013-14 to $42.33 billion in 2016-17. 

On the global front, Asian markets closed mostly in green. China reported better-than-expected trade data for June, suggesting the economy is holding up well thanks to firmer global demand, despite a cooling property market at home amid a financial crackdown that has put firms under pressure. European markets were trading in green as investors eye new earnings reports and look ahead to more comments from US Federal Reserve Chair Janet Yellen who will testify to Congress for a second day.

Back home, majority of cement stocks closed in green on account of domestic brokerage report that average cement prices are expected to rise by 6% Y-o-Y and 7% on Q-o-Q basis across the country despite volume decline in the southern and central regions. Realty stocks witnessed some buying on hopes of rate cut.

The BSE Sensex ended at 32030.48, up by 225.66 points or 0.71% after trading in a range of 31892.63 and 32091.52. There were 24 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.45%, while Small cap index was up by 0.40%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 1.69%, Capital Goods up by 1.11%, Bankex up by 0.83%, Basic Materials up by 0.72% and Metal up by 0.71%, while Oil & Gas down by 0.30% and Energy down by 0.10% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 3.21%, Bharti Airtel up by 1.84%, ICICI Bank up by 1.62%, Larsen & Toubro up by 1.41% and Sun Pharma up by 1.16%. (Provisional)

On the flip side, ONGC down by 2.27%, Asian Paints down by 0.83%, Tata Motors down by 0.75%, Mahindra & Mahindra down by 0.49% and HDFC Bank down by 0.18% were the top losers. (Provisional)

Meanwhile, the industry body Associated Chambers of Commerce and Industry of India (ASSOCHAM) has urged the union government to review 18 percent Goods and Services Tax (GST) rate on specific agriculture inputs such as bio fertilizers, bio pesticides/bio control agents (BCA), organic manures/vermicompost/farmyard manure (FYM) and others so as to compress the use of chemical fertilisers..

The industry body has highlighted that higher GST in this segment will directly promote the use of chemical fertilisers, thereby leading to increase in green house gas emissions. Apart from this, it noted that this will adversely impact public health too. Adding further, it pointed out that such a taxation policy on these segments will directly contradict efforts being made by Prime Minister Narendra Modi in promoting variety of schemes and projects such as Swachh Bharat, Soil Health Card, Namami Gange and various organic missions.

Underlining the importance of bio-fertilizers, the chamber has said that they are manufactured primarily by micro, small and medium enterprises (MSMEs) and also provide farmers an option towards sustainable agriculture practices like organic farming. Besides, it noted that bio-fertilizers are highly beneficial as they are alternate solutions to farmers from use of chemical fertilizers that tends to spoil both soil and environment.

The CNX Nifty ended at 9892.90, up by 76.80 points or 0.78% after trading in a range of 9853.45 and 9897.25. There were 41 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 4.63%, ITC up by 3.09%, Hindalco up by 2.39%, ICICI Bank up by 1.98% and Indiabulls Housing up by 1.88%. (Provisional)

On the flip side, Indian Oil Corporation down by 2.90%, ONGC down by 2.39%, Bharti Infratel down by 2.03%, Asian Paints down by 0.94% and Eicher Motors down by 0.76% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 3.97 points or 0.05% to 7,420.90, Germany’s DAX increased 28.48 points or 0.23% to 12,655.06 and France’s CAC increased 31.76 points or 0.61% to 5,253.89.

Asian equity markets ended mostly in green on Thursday, tracking firm overnight cues from Wall Street and Europe, as Fed Chair Janet Yellen's comments about gradual policy tightening soothed fears of a central bank moving too fast. In the first day of her testimony to Congress, Yellen on Wednesday reiterated the Fed's plans to raise rates and gradually reduce the size of its $4.5 trillion balance sheet, but said the federal-funds rate don't have to rise all that much further to get to a neutral policy stance. Chinese stocks ended higher, as investors were encouraged by China's solid trade data and Federal Reserve Chair Janet Yellen's signal to adopt a patient approach in the current US rate-tightening phase. Exports grew 11.3 percent year-over-year in June, faster than the 8.9 percent rise economists had forecast. Similarly, imports surged 17.2 percent from a year ago, bigger than the expected growth of 14.5 percent. Meanwhile, Japanese shares pared early gains to finish on a flat note as lower bond yields dragged down banking stocks and the yen firmed up, hurting exporters shares.