Rate cut hopes push markets to record highs

Indian equity benchmarks continued their record-setting spree in late afternoon session, as investors were riding on firm macro data and expecting Reserve Bank of India (RBI) to cut interest rates in its monetary policy review in August. India’s retail inflation cooled down to 1.54% in June from 2.18% in May, while industrial output grew 1.7% in May on a yearly basis after expanding revised 2.8% in April. Sensex and Nifty were trading above the crucial 32,000 and 9,850 levels respectively, with gains of over half a percent. Some support also came with the industry body PHDCCI’s latest report that 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. Meanwhile, India’s fuel demand growth slowed to just 0.4% in June as consumption of industrial fuel dipped.

On the global front, European markets were trading in green, as investors digested new earnings reports and looked ahead to more comments from US Federal Reserve Chair Janet Yellen who will testify to Congress for a second day. Asian markets were also trading in green. Back home, in scrip specific development, Chartered Logistics traded jubilantly after the company bagged an order worth Rs 24 crore from ONGC Petro-additions to be executed in a period of two years.

The BSE Sensex is currently trading at 32072.37, up by 267.55 points or 0.84% after trading in a range of 31892.63 and 32091.52. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.43%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were FMCG up by 1.72%, Capital Goods up by 1.08%, Bankex up by 0.95%, Power up by 0.76% and Utilities up by 0.62%, while Oil & Gas down by 0.16% and Metal down by 0.08% were the only losing indices on BSE.

The top gainers on the Sensex were ITC up by 3.13%, ICICI Bank up by 1.74%, HDFC up by 1.40%, Larsen & Toubro up by 1.28% and Axis Bank up by 1.21%. On the flip side, ONGC down by 1.93%, Coal India down by 0.65%, Tata Motors down by 0.41%, Mahindra & Mahindra down by 0.39% and Infosys down by 0.18% were the top losers.

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 is currently trading at 9888.55, up by 72.45 points or 0.74% after trading in a range of 9853.45 and 9889.95. There were 40 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were ITC up by 3.06%, Yes Bank up by 2.93%, Indiabulls Housing Finance up by 1.98%, ICICI Bank up by 1.86% and HDFC up by 1.48%. On the flip side, Indian Oil Corporation down by 3.11%, Bharti Infratel down by 2.21%, ONGC down by 2.00%, Hindalco down by 0.97% and Eicher Motors down by 0.58% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 increased 1.43 points or 0.01% to 20,099.81, KOSPI Index increased 17.72 points or 0.74% to 2,409.49, Shanghai Composite increased 20.62 points or 0.64% to 3,218.16, Taiwan Weighted increased 39.47 points or 0.38% to 10,460.15 and Hang Seng increased 302.53 points or 1.16% to 26,346.17. On the flip side, FTSE Bursa Malaysia KLCI decreased 3.69 points or 0.21% to 1,753.55 and Jakarta Composite decreased 1.31 points or 0.02% to 5,817.82.

European markets were trading mostly in green; France’s CAC increased 13.72 points or 0.26% to 5,235.85 and Germany’s DAX was up by 18.36 points or 0.15% to 12,644.94. On the flip side, UK’s FTSE 100 decreased 1.46 points or 0.02% to 7,415.47.