Post Session: Quick Review

Indian equity benchmarks extended their gaining streak for second straight session and ended at 3-week high, as buying momentum in the equities persisted. Domestic indices made positive start, tracking positive Asian markets. Some support came with RBI Governor Urjit Patel’s statement that there are no implications on non-performing assets (NPAs) of banks because of farm loan waivers provided by various states. Investors continued to take support with World Bank’s statement that India will retain the tag as the world’s fastest growing major emerging economy for the next three years. The bank’s June 2018 edition of the Global Economic Prospect report pegged India’s GDP growth at 7.3 percent in FY 2018-19 and 7.5 percent in FY 2019-20, reflecting robust private consumption and strengthening investment.

Buying intensified during second half of the day which helped indices reach their intra-day high levels, as traders remained in a jubilant mood with a report that the Reserve Bank has retained growth projections for the current fiscal at 7.4 per cent on hopes of further boost to investments and higher consumption. The Indian economy had grown at 6.7 percent last fiscal. Sentiments also got boost, as Moody's Investors Service in its latest report expects India to stick to the estimated fiscal deficit of 3.3% of GDP and even cut capital expenditure to offset any slippage from the budgeted target. Adding some optimism, Prime Minister Narendra Modi said his government's constant endeavour is to ensure affordable healthcare for every Indian. Meanwhile, Midcaps, too, saw the relief rally continuing for the second straight day.

However, in the last leg of trade, markets trimmed some of their initial gains, as anxiety remained among the traders with Chairman of the EEPC India, Ravi Sehgal’s statement that the decision of interest rate hike would increase input cost pressures only for the exporters. Traders took note of report stating that Foreign Direct Investment (FDI) to India declined to $40 billion in 2017 from $44 billion in the previous year. FDI inflows to South Asia contracted by 4% to $52 billion, owing to a drop in inflows to India.

On the global front, Asian markets ended mostly higher, as investors tracked another strong lead from Wall Street, with fresh upbeat US data reinforcing optimism in the global outlook, overshadowing simmering trade concerns. The European markets were trading mostly in green in early deals, joining an overnight rally on Wall Street and in Asia, with the banking sector posting the best performance amid expectations that the European Central Bank may soon start to wind down its stimulus. 

Back home, select sugar stocks edged higher after with report stating that the Cabinet Committee on Economic Affairs (CCEA) cleared a Rs 7,000 crore bailout package for the cash-starved sugar industry, which includes the creation of a 3-million-tonne sugar stockpile and subsidised loans for the enhancement of the country’s ethanol production capacity. 

The BSE Sensex ended at 35433.13, up by 254.25 points or 0.72% after trading in a range of 35278.38 and 35628.49. There were 23 stocks advancing against 7 stocks declining on the index, while 1 stock remained unchanged. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 1.35%, while Small cap index up by 1.95%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.71%, Basic Materials up by 1.63%, Metal up by 1.44%, Energy up by 1.43% and Industrials up by 1.40%, while Consumer Durables down by 0.22% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 3.76%, Tata Motors up by 3.08%, ICICI Bank up by 2.73%, Tata Motors - DVR up by 2.49% and Axis Bank up by 2.36%. (Provisional)

On the flip side, Coal India down by 0.82%, Indusind Bank down by 0.78%, Kotak Mahindra Bank down by 0.57%, SBI down by 0.33% and Bharti Airtel down by 0.32% were the top losers. (Provisional)

Meanwhile, the World Bank in its latest report has forecast that India will retain its world’s fastest-growing major economy tag. It has forecast a growth rate of 7.3 per cent for current financial year (FY19) and 7.5 per cent for the next two years, reflecting robust private consumption and strengthening investment. It also said that India’s economy is robust, resilient and has potential to deliver sustained growth. However, it expected the global growth rate to go down to 3 per cent in 2019 and 2.9 per cent in 2020.

The report further highlighted that India’s growth potential is about 7 per cent, and it is currently growing at a pace above its potential, attributing it to the major economic reforms and fiscal measures undertaken by the government. Besides, it pointed out that India’s GDP growth bottomed out in the middle of 2017 after slowing for five consecutive quarters, and has since improved significantly, with momentum carrying over into 2018 on the back of a recovery in investment.

The World Bank added that in India there has been a further deterioration in trade and current account balances on account of accelerating import grown amid strengthening domestic demand and higher energy prices. The global economic picture painted by the bank is not as rosy as it is for India. India has overcome the temporary disruptions caused by the implementation of the Goods and Services Tax (GST) by mid-2017 and manufacturing output and industrial production have continued to firm.

The CNX Nifty ended at 10761.90, up by 77.25 points or 0.72% after trading in a range of 10722.60 and 10818.00. There were 36 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Steel up by 3.78%, Tata Motors up by 2.96%, Indiabulls Housing Finance up by 2.86%, ICICI Bank up by 2.77% and Axis Bank up by 2.14%. (Provisional)

On the flip side, Eicher Motors down by 1.13%, Titan Co down by 1.09%, Indusind Bank down by 1.08%, Coal India down by 0.58% and Sun Pharma down by 0.37% were the top losers. (Provisional)

The European markets were trading mostly in green; France’s CAC increased 20.37 points or 0.37% to 5,477.93, Germany’s DAX increased 20.9 points or 0.16% to 12,850.97 while, UK’s FTSE 100 decreased 10.39 points or 0.13% to 7,701.98.

Asian equity markets ended mostly higher on Thursday as fears over trade disputes abated and remarks by a European Central Bank board member eased worries about the new Italian government's spending plans. China’s Commerce Ministry said that the country does not want an escalation of trade frictions with the United States, and that some specific progress was made in the latest round of talks that concluded over the weekend. The euro rose against the dollar after the European Central Bank indicated it will discuss ending its bond purchasing program at a meeting next week. However, Chinese stocks ended lower as consumer and healthcare firms took a breather after recent gains.