Post Session: Quick Review

Indian equity benchmarks traded below neutral line throughout the day and ended the session in negative territory with Nifty closing below 9850 mark. The market breath was in favour of declines. The equity benchmarks made a weak start and traded in red in early deals dragged by weak movements on Infosys on the back of developments in the top management exit. IT sector was under pressure with Infosys closing with cut of around 10% after the IT major announced that its board of directors has accepted the resignation of Vishal Sikka as the Managing Director and CEO with immediate effect. Pharma stocks were under pressure as the government proposes to revamp the country’s drug pricing regulator, allowing it to set prices of only essential medicines. The latest draft proposals suggest amendments to the drug pricing policy and inducting advisory body of experts in a move to strengthen the regulatory body, but at the same time may take away its absolute power to fix drug prices in public interest. Some selling also crept in after Chief Economic Adviser (CEA) Arvind Subramanian stated that India’s thrust on renewable energy would create a double whammy for the government by reducing the viability of coal-fired thermal power plants and rising non-performing assets (NPAs) of state-run lenders. Investors took note of foreign brokerage report that economic growth and inflation are expected to trend higher in the next 6-12 months and the Reserve Bank is likely to stay on a prolonged pause. The brokerage report highlighted that the MPC minutes suggest low inflation and growth concerns led to policy easing earlier this month, and going ahead the RBI is expected to stay on hold.

On the global front, Asian markets closed mostly in red, taking a cue from a nervous Wall Street as political woes for President Donald Trump imperil his tax cut and infrastructure spending plans. Growth in new home prices slowed in China in July with Beijing prices down for a second straight month, reinforcing expectations of further slowing later this year. The European markets were trading in red as market sentiments weakened following news of a terrorist attack in Barcelona, Spain. In what’s being investigated as a terrorist attack, a van plowed into a crowd in the Ramblas tourist area on Thursday in Barcelona killing at least 13 and injuring scores with unconfirmed reports that hostages were being held at a nearby restaurant by gunmen.

Back home, Talbros Engineering closed firm on back of bonus shares approval. The company at its meeting held on August 17 has approved the capitalization of free reserve by issuance of bonus equity shares in the ratio of 1:1 to the members of the company. United Breweries (Holdings) (UBHL) was locked at lower circuit limit on report that leading bourses BSE and NSE will suspend trading in the shares of UBHL from September 8 while the entire promoter shareholding has been frozen with immediate effect. Fugitive liquor baron Vijay Mallya is a promoter of UBHL.

The BSE Sensex ended at 31510.88, down by 284.58 points or 0.90% after trading in a range of 31349.13 and 31729.88. There were 11 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.16%, while Small cap index was down by 0.48%.  (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 1.66%, Oil & Gas up by 0.80%, FMCG up by 0.69%, Energy up by 0.58% and Consumer Durables up by 0.10%, while IT down by 3.61%, TECK down by 2.72%, Healthcare down by 1.67%, Realty down by 0.85% and Bankex down by 0.74% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 1.99%, Power Grid up by 1.62%, Bharti Airtel up by 1.40%, TCS up by 1.30% and Reliance Industries up by 0.70%.  (Provisional)

On the flip side, Infosys down by 9.56%, Sun Pharma down by 3.81%, NTPC down by 1.89%, Dr. Reddy’s Lab down by 1.69% and Coal India down by 1.66% were the top losers. (Provisional)

Meanwhile, after the Union Cabinet last month approved the new Wage Code Bill, which will ensure a minimum wage across all sectors by integrating four labour related laws and doubling the minimum wages from the present about Rs 9,000 per month to Rs 18,000, the Apparel Export Promotion Council (AEPC) has sought government’s clarification over minimum wages in the garment industry, stating that if the wages in the industry get doubled to Rs 18,000 per month, it will affect the exports, employment and also lead to increment in the costs.

AEPC Chairman Ashok G Rajani said there is a lot of confusion surrounding minimum wages after clearance of the Wage Code Bill by the Cabinet and also pointed that the booking of export orders has got impacted post clearance of the Wage Code Bill by the Cabinet and said that a clarification by the government is required to restore the confidence of foreign buyers. He further said that amid challenging environment, doubling of the minimum wages will put additional burden on the garment sector and would make it unviable and unsustainable.

AEPC Chairman while stressing that around 70 per cent of the workforce in the ready-made garment industry are women, said that fixing of minimum wages at Rs 18,000 per month will not only adversely affect the exports, but lead to a fall in employment generation in the sector.

The CNX Nifty ended at 9834.40, down by 69.75 points or 0.70% after trading in a range of 9783.65 and 9865.95. There were 25 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 4.13%, BPCL up by 2.21%, Hindustan Unilever up by 2.18%, Eicher Motors up by 2.16% and Ultratech Cement up by 2.01%.  (Provisional)

On the flip side, Infosys down by 9.55%, Sun Pharma down by 3.65%, Zee Entertainment down by 2.99%, Vedanta down by 2.10% and NTPC down by 1.75% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 70.78 points or 0.96% to 7,317.09, Germany’s DAX decreased 76.99 points or 0.63% to 12,126.47 and France’s CAC decreased 55.18 points or 1.07% to 5,091.67.

Asian equity markets closed mostly lower on Friday as the ongoing political turmoil in Washington put President Donald Trump's stimulus and tax plans in jeopardy and a deadly attack in Spain that killed at least 13 people and injured more than 100 others left the world shocked. Investors also adopted a cautious stance ahead of controversial joint military exercises of South Korea and the US, scheduled to start next week. Japanese stocks fell to 3-1/2-month lows, hit by losses on Wall Street and a weaker dollar as doubts grow over whether President Donald Trump will be able to push through policies to boost US economic growth. Meanwhile, Chinese shares closed on a steady note amid optimism over earnings and improving growth.