Post Session: Quick Review

Indian equity benchmarks traded on a firm note for most part of the day but ended the session flat. The market breadth was mildly in favor of advances with four stocks advancing against three declining stocks. The equity benchmarks made a positive start and traded in fine fettle in early deals as traders opted to buy beaten down but fundamentally strong stocks after yesterday’s drubbing. Traders took support from foreign brokerage firm’s report which enlightened that economic activity in the country lost some pace amid GST related disruptions but underlying growth momentum remains strong and the country may clock 6.7 percent growth this fiscal. It further said that a number of high frequency growth indicators are indicating that end demand is holding up well and is running counter to the slowdown exhibited in the national accounts. The report added that India is moving on to the next phase of the business cycle of productive growth - a phase marked by further improvement in growth while macro stability remains in check. Some support also came taking cues from Sanjeev Sanyal, principal economic advisor’s statement that the government has dropped the idea of setting up a bad bank, though solving NPA problem is the top priority for the government right now than consolidation as the government is keen on creating a long-term framework for strong and stable growth. Creating fundamentally strong banks is essential for India’s long-term growth for which resolving NPAs is crucial according to the government.

Investors took note that as many as six lakh more businesses have filed returns and paid taxes in last one week, taking maiden revenue collections from GST to about Rs 94,700 crore. Finance Minister Arun Jaitley had last week stated that 38.38 lakh businesses had filed their returns and paid Rs 92,283 crore in taxes for the month of July - the first month of implementation of independent India’s biggest tax reform, the GST. Some cautiousness prevailed after a senior official with Securities and Exchange Board of India (SEBI) enlightened that a stronger rupee, often endorsed by the central government, is worrying the capital market regulator. The huge inflow of foreign investments into the country is having an impact on the rupee and regulators need to manage it through a calibrated system. Foreign Portfolio Investors have invested Rs 44,150 crore in Indian equities and Rs 1.29 lakh crore in debt so far this year. Separately, North Korea’s Minister of External Economic Relations and head of the delegation at the Eastern Economic Forum in Vladivostok, Kim Yong-jae, said that the country will introduce strong countermeasures against the United States’ attempts to exert pressure through strong sanctions.

On the global front, Asian markets closed mixed, amid hopes for a temporary extension of the US debt ceiling. A poll report showed that Japan’s economy likely grew at a slower pace than initially estimated in the second quarter, on expected downward revisions in capital spending growth. The European markets were trading in green as markets waited to hear just how close the European Central Bank is to scaling back its more than 2 trillion euro ($2.75 trillion) stimulus program. ECB President Mario Draghi is expected to lay the groundwork to wind back its asset purchase program, though few investors expect to see a clear framework just yet.

The BSE Sensex ended at 31654.20, down by 7.77 points or 0.02% after trading in a range of 31620.44 and 31814.96. There were 18 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.68%, while Small cap index was up by 0.46%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.22%, Auto up by 0.90%, Capital Goods up by 0.86%, Basic Materials up by 0.79% and Consumer Disc up by 0.72%, while Telecom down by 0.96%, Energy down by 0.52%, Oil & Gas down by 0.45%, FMCG down by 0.14% and PSU down by 0.07% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 2.02%, Bajaj Auto up by 1.51%, Larsen & Toubro up by 1.26%, Hero MotoCorp up by 0.99% and Sun Pharma up by 0.84%. (Provisional)

On the flip side, ITC down by 1.72%, Bharti Airtel down by 1.68%, Tata Motors down by 1.32%, Coal India down by 1.31% and Tata Motors - DVR down by 1.05% were the top losers. (Provisional)

Meanwhile, global airlines’ body the International Air Transport Association (IATA) has indicated that India lost the top position to neighbouring China and become world's second fastest growing domestic aviation market in the month of July this year. According to the IATA, China tops the domestic chart for just the second time in 28 months, however the upward trend in India has picked up. It added that passenger demand remains on course to grow steadily this year as a whole. 

IATA has noted that India registered a growth of 12.5% in July 2017, while China overtook India by registering 15% growth in the same period. The growth is measured in RPK (Revenue Passenger Kilometres) - an indicator of demand. It also highlighted that year-on-year growth in domestic India RPKs slowed to 12.5 percent in July - its slowest speed since November 2014. It also explained that a very strong month-on-month increase in seasonally-adjusted RPKs in July meant that yearly RPK growth managed to remain in double digits for the 35th consecutive month.

Global airlines’ body further mentioned that while the growth appears to have slowed in the opening months of 2017, the solid upward seasonally-adjusted traffic trend looks to have reasserted itself in recent months. As is the case in China, it pointed out that demand is still stimulated by sizeable increase in the number of domestic routes served. Globally, it stated that the easing in the seasonally-adjusted industry-wide RPK trend also reflects a reduced degree of stimulus to demand from lower airfares.

The CNX Nifty ended at 9923.15, up by 6.95 points or 0.07% after trading in a range of 9917.20 and 9964.85. There were 29 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing up by 4.06%, Vedanta up by 2.47%, Eicher Motors up by 2.24%, Bosch up by 2.04% and Mahindra & Mahindra up by 1.93%. (Provisional)

On the flip side, BPCL down by 2.22%, Bharti Airtel down by 1.74%, ITC down by 1.70%, Tata Motors - DVR down by 1.35% and Tata Motors down by 1.15% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 17.71 points or 0.24% to 7,371.84, Germany’s DAX increased 122.22 points or 1% to 12,336.76 and France’s CAC increased 30.07 points or 0.59% to 5,131.48.

Asian equity markets ended mixed on Thursday despite overnight gains in the US and European markets. While a temporary extension of the US debt ceiling to December helped spur gains earlier in the session, markets succumbed to selling pressure at higher levels as the day progressed. The European Central Bank meets later today, with investors waiting to see whether ECB President Mario Draghi will signal measures towards winding down the bank's quantitative easing program at some point this autumn. China stocks fell as profit taking in resource shares following their recent rally and weakness in the banking sector offset strong gains in real estate companies. Meanwhile, Japanese shares rebounded from four-month intraday lows hit the previous day after the yen sold off overnight on news of extension of the US debt ceiling.  South Korea shares ended higher on easing geopolitical tensions after US President Donald Trump said the use of military force against Pyongyang will not be his ‘first choice’.