Post Session: Quick Review

Buying in the final hour of trade pulled the Indian equity markets higher and closed near the highest point of the day. The equity benchmarks made a cautious start and traded flat in early deals, as traders preferred to remain on sidelines taking note of this week’s development with the RBI policy announcement to cut repo rate failed to enthuse the street. Services sector plunged into contraction mode in July with the sharpest fall in about four years as confusion caused by the GST rollout triggered a dip in new business orders. The data follows a similar downtrend seen in the manufacturing sector, which also contracted in July following the implementation of Goods and Services Tax (GST) resulting into a significant drop in new orders and output. Investors remained cautious with Finance Minister Arun Jaitley’s statement that lending rate of 14-15 per cent will make India uncompetitive in the global market and industry cannot invest at such higher interest rates. Public sector banks were buzzing as the Lok Sabha passed the Banking Regulation (Amendment) Bill, 2017 introduced last month to replace the existing ordinance promulgated in May this year to empower the Reserve Bank of India to deal with stressed assets. Replying to a debate on the bill, Finance Minister Arun Jaitley said the process of resolution of bad loans will start shortly. The finance minister said RBI had already identified top 12 loan defaulters and more cases will be taken up for resolution.  Aviation stocks closed in green after global airlines’ body the International Air Transport Association (IATA) has stated that India’s domestic air passenger traffic surged by 20.3% in June as compared to the corresponding month of the previous year, the highest among major aviation markets like Australia, Brazil, China, Japan, Russia and the US.

On the global front, Asian markets closed mixed, as investors eyed a flurry of data in coming week. Japan’s economy was expected to grow for a sixth straight quarter in April-June, a poll found, buoyed by domestic demand as consumer spending recovered and firms increased their capital investment. Gross domestic product (GDP) was seen expanding at an annualized rate of 2.5 percent in the second quarter, the poll found, a rate last posted in January-March 2016, while the last six straight quarter run of growth was January-March 2005 through April-June 2006. European markets were trading in green as investors focused on a fresh batch of earnings reports and remained cautious amid ongoing political tensions in the US.

Back home, stocks like Solar Industries India and Websol Energy closed in green on reports that anti-dumping authorities have recommended action against key Chinese components for windmills, and are considering a similar petition for solar equipment, delivering another blow to the flood of cheap imports from Beijing and potentially arresting the steep fall in renewable energy tariffs.

The BSE Sensex ended at 32323.30, up by 85.42 points or 0.26% after trading in a range of 32107.99 and 32352.19. There were 22 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.87%, while Small cap index was up by 0.13%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 4.16%, Oil & Gas up by 3.00%, PSU up by 2.58%, Metal up by 2.51% and Basic Materials up by 1.17%, while Healthcare down by 0.82% and Telecom down by 0.36% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 3.47%, Hero MotoCorp up by 3.05%, Coal India up by 2.96%, NTPC up by 2.81% and Hindustan Unilever up by 2.26%. (Provisional)

On the flip side, Dr. Reddy’s Lab down by 3.77%, Sun Pharma down by 1.63%, Reliance Industries down by 1.49%, Bharti Airtel down by 0.71% and Lupin down by 0.55% were the top losers. (Provisional)

Meanwhile, taking a mega leap, foreign direct investment (FDI) inflow in India’s textile sector surged more than double to $618.95 million during the financial year 2016-17 (FY17) as against of $230.13 million in the previous financial year (FY16). The sector has received $21.41 million foreign inflows in first two months of current financial year.

To enhance investment, production and export in the textile sector, the government has launched a special package for the apparel and made-ups segments of the industry. The package includes enhanced duty drawback coverage, rebate of state levies on export of garments and made-ups, additional incentives under Amended Technology Upgradation Fund Scheme (ATUFS) and Scheme for Production and Employment Linked Support for Garmenting Unit Pradhan Mantri Paridhan Rojgar Protsahan Yojana (PMPRPY) and incentives under the Income Tax Act.

As per data provided by Ministry of Textiles, the export of textiles and clothing including handicrafts also increased marginally to $39665 million in 2016-17 from $39664 million in the previous financial year. Of the total export, in 2016-17, readymade garment’s export stood at $17091 million, while export of cotton textiles stood at $10594 million. There was increment in export of carpets and coir & coir manufacturers, which surged to $1498 million and $297 million in FY17 from $1442 million and $262 million in FY16 respectively. However, silk export declined to $270 million in FY17 from $344 million in FY16.

The CNX Nifty ended at 10070.10, up by 56.45 points or 0.56% after trading in a range of 9988.35 and 10075.25. There were 37 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indian Oil up by 8.00%, BPCL up by 5.87%, Tata Steel up by 3.80%, Eicher Motors up by 3.17% and Coal India up by 3.08%. (Provisional)

On the flip side, Dr. Reddy’s Lab down by 3.70%, Tata Power down by 3.02%, Aurobindo Pharma down by 2.33%, Sun Pharma down by 1.62% and Bosch down by 1.58% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 3.22 points or 0.04% to 7,477.99, Germany’s DAX increased 21.85 points or 0.18% to 12,176.57 and France’s CAC increased 7.99 points or 0.16% to 5,138.48.

Asian equity markets made a mixed closing on Friday amid political uncertainty in the US and ahead of the US monthly jobs report slated for release later in the day. The dollar remained under selling pressure after the Wall Street Journal reported that US Special Counsel Robert Mueller's investigation into possible Russian interference in the 2016 elections is intensifying. It was said that Mueller has impaneled a grand jury in Washington to investigate allegations of Russia's interference in the elections. US crude futures remained below $50 a barrel on concerns over high OPEC supplies while the yen hit a seven-week high. Japanese shares ended lower as the yen's strength in the wake of renewed concerns over US President Donald Trump's ability to push through tax changes and a surprisingly soft reading on the US services sector overshadowed investors’ optimism on corporate earnings. Chinese shares ended lower even as a rally in cyclicals remained intact.