Benchmarks resume record setting spree; Nifty settles above 9,900 mark for first time

Resuming their record setting spree, Indian equity benchmarks ended the session with decent gains, with Sensex closing at new peak and Nifty ending above 9,900 mark for the first time. Markets after making an optimistic start traded in tight band throughout the session. Sentiments remained up-beat with latest edition of the Organisation for Economic Co-operation and Development’s (OECD) economic outlook report on India stating that economic growth is projected to remain strong and India will remain the fastest growing G20 economy. It added that private consumption has been buoyant, boosted by the increase in public wages and pensions and by higher agricultural and rural incomes. Traders also took some support with report that India’s trade deficit narrowed in June after swelling to a 30-month high in May even as exports grew slowly in the month. Exports grew 4.39%, a four-month low in the 10-months of continuous growth, to $23.5 billion. Trade deficit was $8.1 billion in the year ago period and $13.84 billion in May. Some support also came with report that Prime Minister Narendra Modi held a meeting with senior government functionaries to review the country’s current foreign direct investment (FDI) policy, which discussed measures to further liberalise the policy, so as to attract more FDI in various sectors.

Adding to the optimism, foreign investors have poured nearly Rs 11,000 crore in the capital markets in the first two weeks of July, supported by the trouble-free rollout of GST and stimulating Indian economy. The latest inflow comes following a net infusion of over Rs 1.62 lakh crore in the previous five months (February-June) on several factors. Meanwhile, both houses of Parliament were adjourned until Tuesday after making obituary references to members who passed away recently and to victims of Amarnath Yatra terror attack in which seven people were killed.

On the global front, Asian shares set a fresh two-year high, boosted by stronger-than-expected economic growth in China and bets that lacklustre US data will keep the Federal Reserve cautious about the pace of further policy tightening. However, European markets trading mostly in red at this point of time, as investors are eyeing second round of Brexit talks.

Back home, market capitalization of India’s most valued firm Reliance Industries (RIL) surpassed Rs 5 lakh crore level in trade. Shares of the company have been on a rising spree since the launch of its telecom unit Reliance Jio Infocomm in September last year. However, tobacco stocks like ITC, Godfrey Phillips India and VST Industries closed in red on reports that the Goods and Services Tax (GST) Council is likely to meet today to consider a cess on tobacco.

The NSE’s 50-share broadly followed index Nifty gained by around thirty points to end above its psychological 9,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over fifty points to end above its crucial 32,050 mark. The broader markets remained tepid, but somehow managed to keep their head above water. The market breadth remained in favour of decliners, as there were 1,302 shares on the gaining side against 1,377 shares on the losing side, while 176 shares remain unchanged.

Finally, the BSE Sensex gained 54.03 points or 0.17% to 32,074.78, while the CNX Nifty was up by 29.60 points or 0.30% to 9,915.95. 

The BSE Sensex touched a high and a low of 32,131.92 and 32,037.21, respectively and there were 22 stocks on gainers side as against 9 stocks on the losers side on the index.

The broader indices ended marginally in green; the BSE Mid cap index rose 0.07%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were Realty up by 1.28%, Basic Materials up by 1.04%, Metal up by 0.97%, IT up by 0.95% and TECK was up by 0.89%, while FMCG down by 1.54% and Capital Goods was down by 0.07% were the only losing indices on BSE.

The top gainers on the Sensex were Wipro up by 3.12%, Adani Ports & SEZ up by 1.91%, ICICI Bank up by 1.69%, Cipla up by 1.56% and Infosys up by 1.37%. On the flip side, ITC down by 3.40%, Coal India down by 1.34%, Dr. Reddy’s Lab down by 0.72%, Axis Bank down by 0.42% and Maruti Suzuki down by 0.41% were the top losers.

Meanwhile, the Federation of Indian Export Organisations (FIEO) has raised concern over implication of the Goods and Services Tax (GST), and said that it will severely dent the liquidity situation of traders and the compliance cost of merchant exporters may go up.

The top exporter body further added that export competitiveness of India may tank by about 2 per cent and this will be a big blow to exporters. It pointed that before GST, exporters used to get ab-initio exemptions from duties. But they have to pay first and then seek refund and due to this process, about Rs 1,85,000 crore will get stuck with the government.

FIEO President Ganesh Kumar Gupta termed GST as a “path breaking” reform, but it will bear fruits in the long run with initial hiccups. He said that that the liquidity problem of the exporters, delays in initial returns for exports in July and August, procedural issues in bonds are being flagged by FIEO with the officials concerned.

FIEO had already asked the government to provide interest on delay in payment of refund of taxes/duties after 10 days of exporters filing claim under the GST regime. As per the refund rules, the interest on delayed payment would be due only after 60 days.

The CNX Nifty traded in a range of 9,928.20 and 9,894.70. There were 40 stocks in green as against 11 stocks in red on the index.

The top gainers on Nifty were Ultratech Cement up by 2.96%, Vedanta up by 2.73%, Wipro up by 2.69%, HCL Tech up by 2.09% and Zee Entertainment up by 1.94%. On the flip side, ITC down by 3.56%, Coal India down by 1.38%, Yes Bank down by 1.10%, GAIL India down by 1.08% and Axis Bank down by 0.48% were the top losers.

The European markets were trading in red; Germany’s DAX decreased 49.19 points or 0.39% to 12,582.53 and France’s CAC was down by 8.6 points or 0.16% to 5,226.71, while UK’s FTSE 100 was up by 24.8 points or 0.34% to 7,403.19.

Asian equity markets ended mostly in green on Monday as weak US retail sales and inflation data served to cool Fed rate hike speculation and data showed the Chinese economy grew more than expected in the second quarter. Though, Chinese shares ended lower as a series of profit warnings from small-cap companies and the government's focus on increased regulatory scrutiny overshadowed encouraging GDP data. China's GDP grew 6.9 percent year-on-year in the second quarter of 2017, the National Bureau of Statistics said. That was unchanged from the previous quarter and exceeded expectations for a rise of 6.8 percent. On a quarterly basis, GDP growth stood at 1.7 percent - in line with expectations and up from 1.3 percent in the previous three months. Retail sales jumped an annual 11.0 percent in June, beating forecasts for 10.6 percent and up from 10.7 percent in May, while industrial output climbed 7.6 percent from last year, topping expectations for an increase of 6.5 percent. Fixed asset investment gained an annual 8.6 percent - unchanged from the previous month and beating forecasts for 8.5 percent. Meanwhile, the Japanese markets were closed for the Marine Day holiday.