Benchmarks eke out modest gains from a choppy session

Indian equity benchmarks managed to keep their head above water in a choppy day of trade and settled with modest gains. Markets swung in both directions as investors remained cautious with private report stating that retail and wholesale inflation accelerated in July and the uptrend is likely to continue in the coming months, limiting the space for further monetary easing. Though markets traded mostly in green during the session, as traders took some encouragement with the government raising estimate on food grain output for the crop year ended June on an increase in the estimated yields of paddy and wheat. The government has revised upward the country’s overall food grain production by 2.3 million tonnes (MT) to a record 275.68 MT in 2016-17 crop year that ended in June. Adding to the optimism, American think-tank Council on Foreign Relations’ Senior Fellow for India Alyssa Ayers said that the country has emerged as a strong world power but still has ‘a long way to go’. Reports that Mutual funds managers pumped more than Rs 30,000 crore in the stock markets during April-July of the current financial year because of strong participation from retail investors, too contributed to the gains.

However, markets pared most of their gains in dying hour of trade with report that the overwhelming presence of public sector is holding back the Indian economy. Investors also took cues from minutes from the last meeting of Monetary Policy Committee (MPC) whose members said easing inflation had supported the need for a rate cut at its August meeting, but warned consumer prices could start accelerating.

Weak opening in European counters too dampened sentiments, as uncertainty surrounding internal US policy continued to put pressure on investor sentiment despite the reduction of the tensions from North Korea. Asian stocks edged higher on Thursday, as tensions between the United States and North Korea came off the boil.

Closer home, some support to the market came after the cabinet cleared the CGST refund scheme with a budgetary allocation of Rs 27,413 crore. This will come as a big relief to sectors like Pharma, Automobiles and FMCG units. Separately, in line with the government’s policy, the RBI said farmers can avail of short-term crop loans of up to Rs 3 lakh at subsidized interest rate of 7% that could go down to 4% on prompt repayment.

On the sectoral front, public sector undertaking (PSU) stocks remained on buyers’ radar after the Cabinet decided to set up a high-powered committee of Union ministers, including Finance Minister Arun Jaitley, to expedite strategic disinvestment of PSUs. Stocks related to steel sector remained in focus after Moody's Investors Service revised its outlook for the Asian steel industry from negative to stable on an expectation that profitability will remain steady. Aviation stocks like Spicejet and Jet Airways edged higher for the third straight trading session after they reported a good set of numbers for the April-June quarter (Q1FY18).

The NSE’s 50-share broadly followed index Nifty gained marginally to end above its psychological 9,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex increased over twenty points to end tad below its crucial 31,800 mark. The broader markets too struggled to get traction and ended the session mixed. The market breadth was in the favour of advances, as there were 1,398 shares on the gaining side against 1,164 shares on the losing side, while 138 shares remain unchanged.

Finally, the BSE Sensex gained 24.57 points or 0.08% to 31,795.46, while the CNX Nifty was up by 6.85 points or 0.07% to 9,904.15.

The BSE Sensex touched a high and a low of 31,937.51 and 31,714.10, respectively and there were 8 stocks on gaining side as against 23 stocks on losing side on the index.

The broader indices ended mixed; the BSE Mid cap index decreased 0.35%, while Small cap index was up by 0.53%.

The top gaining sectoral indices on the BSE were IT up by 1.84%, TECK up by 1.79%, Telecom up by 1.54%, Utilities up by 1.05% and PSU was up by 0.88%, while Auto down by 0.72%, Bankex down by 0.71%, Healthcare down by 0.51%, FMCG down by 0.29% and Consumer Discretionary Goods & Services was down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 4.54%, Coal India up by 4.22%, NTPC up by 3.97%, Bharti Airtel up by 1.70% and HDFC up by 0.95%. On the flip side, Cipla down by 2.85%, Adani Ports down by 1.81%, Tata Motors - DVR down by 1.32%, Maruti Suzuki down by 1.23% and Kotak Mahindra Bank down by 1.17% were the top losers.

Meanwhile, in order to save the domestic industry from surge in below-cost imports, the government has extended anti-dumping duty on import of chemical compound polytetraflouroethylene (PTFE) from China by a further period of five years. This chemical is used as a non-stick coating for pans and other cookware. The revenue department has issued a notification imposing an anti-dumping duty of $2,637 per tonne on imports of PTFE from China.  The duty was initially imposed for a period of five years in August 2011 and extended by one year last August.

In its review of the anti-dumping duty, the department has concluded that there is continued dumping of the product concerned from China, both in absolute terms and in relation to production and consumption in India causing injury to the domestic industry. It noted that PTFE imports were also suppressing domestic prices of similar products. As per its notification, the review found that the performance of the domestic industry has deteriorated in terms of profits and return on investments and the dumped imports from China continue to cause injury to the domestic industry despite imposition of the anti-dumping duty. It added that the anti-dumping duty imposed shall be effective for a period of five years (unless revoked, superseded or amended earlier). 

Commerce and Industry Minister Nirmala Sitharaman had told the Rajya Sabha that anti-dumping duty is in force on 93 products concerning imports from China. These products belong to a broad group of chemicals and petrochemicals, products of steel and other metals, fibres and yarn, machinery items, rubber or plastic products, electric and electronic items and consumer goods, among others. Meanwhile, India’s imports from China in 2016-17 have marginally dipped to $61.28 billion as compared to $61.7 billion in 2015-16.

The CNX Nifty traded in a range of 9,947.80 and 9,883.75. There were 19 stocks in green as against 32 stocks in red on the index.

The top gainers on Nifty were Infosys up by 4.68%, NTPC up by 3.94%, Coal India up by 3.78%, Vedanta up by 2.56% and Bharti Airtel up by 2.11%. On the flip side, Cipla down by 2.92%, Adani Ports down by 2.08%, ACC down by 1.72%, Maruti Suzuki down by 1.54% and Aurobindo Pharma down by 1.46% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 21.14 points or 0.28% to 7,411.89, Germany’s DAX slipped 8.69 points or 0.07% to 12,255.17 and France’s CAC decreased 7.21 points or 0.14% to 5,169.40.

Asian equity markets ended mixed on Thursday after the dollar weakened slightly amid political turmoil in Washington DC and after the latest Federal Reserve meeting minutes showed concern about inflation remaining persistently low. Chinese shares ended higher after reports that the government is considering significant changes to open up the economy more widely to foreign investors. Meanwhile, Japanese shares ended lower as the yen strengthened on doubts about US President Donald Trump's ability to implement reforms. Japanese exports rose for an eighth straight month in July amid strong demand in China, official data showed, helping limit the downside. The Indonesian market was closed for Independence Day.