Post Session: Quick Review

Snapping a two-session losing run, Indian equity benchmarks ended Wednesday’s trade on an optimistic note, with frontline gauges recapturing their crucial 10,750 (Nifty) and 35,500 (Sensex) levels. Key indices made a positive start and traded in fine fettle, following rally in global peers. Traders took some encouragement with Economic Affairs Secretary Subhash Chandra Garg’s statement that it is a plausible aspiration for India to become a $10 trillion economy by 2030. He also said that current account deficit (CAD) at 2.5% of GDP won't be a worry as the government has the required instruments to deal with any imbalance created due to foreign fund outflow. Traders reacted positively to the global rating agency, Moody’s latest report which highlighted that non-financial corporates in the country may show modest improvement in their leverage levels in the current financial year, supported by higher revenue and earnings growth. Sentiments on the street improved further with a private report stating that advancing gender parity could contribute $770 billion to India’s GDP by 2025. Domestic sentiments were also buoyed with Niti Aayog CEO Amitabh Kant’s statement that the Centre has saved Rs 90,000 crore by digitally transferring money to beneficiaries of 440 government schemes. Moreover, the strength in domestic currency too supported the markets.

On the global front, Asian markets were ended mostly in green. European markets were trading in red in early deals on Wednesday, tracking gains in Asia, as the panic surrounding a potential global trade war showed signs of easing.

Back home, Airline stocks ended lower after the air passenger traffic growth slows in the month of May. According to data released by the DGCA, domestic air passenger traffic grew 16.53% to 11.86 million in May this year over the same period a year ago. The growth rate was lowest since September 2017, when airlines in India carried 9.58 million passengers, up 16.34% from last September. Besides, agriculture sector was in focus after Prime Minister Narendra Modi showcased the government’s ‘unprecedented’ work in the sector, including doubling of the budget to Rs 2.12 lakh crore. Modi also reiterated that the government is working to double farm income by 2022. 

The BSE Sensex ended at 35539.48, up by 252.74 points or 0.72% after trading in a range of 35329.51 and 35571.37. There were 23 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.18%, while Small cap index up by 0.24%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.13%, Bankex up by 1.03%, Energy up by 0.98%, Realty up by 0.88% and Utilities up by 0.64%, while FMCG down by 0.43%, PSU down by 0.35%, Telecom down by 0.31%, Oil & Gas down by 0.29% and Capital Goods down by 0.28% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 2.36%, Indusind Bank up by 2.06%, Vedanta up by 1.90%, Tata Steel up by 1.83% and Kotak Mahindra Bank up by 1.59%. (Provisional)

On the flip side, ONGC down by 1.24%, ITC down by 0.98%, Coal India down by 0.75%, Wipro down by 0.75% and Larsen & Toubro down by 0.46% were the top losers. (Provisional)

Meanwhile, in order to improve the monitoring and ensure compliance with the Liberalised Remittance Scheme (LRS), the Reserve Bank of India (RBI) has tightened norms for LRS by making quoting of permanent account number (PAN) mandatory even for transactions below $25,000. Under the LRS, all resident individuals, including minors, are allowed to freely remit up to $2,50,000 per financial year for any permissible current or capital account transaction or a combination of both.

The RBI highlighted that it has been decided that furnishing of PAN, which hitherto was not to be insisted upon while putting through permissible current account transactions of up to $25,000, shall now be mandatory for making all remittances under LRS.

Further, the Central Bank added that in the context of remittances allowed under LRS for maintenance of close relatives, it has been decided, in consultation with government, to align the definition of relative' with the definition given in Companies Act, 2013 instead of Companies Act, 1956. Earlier, a system for daily reporting of individual transactions under the LRS by banks was been put in place. This system enables the banks to view the remittances already sent by an individual during the financial year.

The CNX Nifty ended at 10769.75, up by 59.30 points or 0.55% after trading in a range of 10724.05 and 10781.80. There were 31 stocks advancing against 19 stocks declining on the index. (Provisional)

The top gainers on Nifty were Reliance Industries up by 2.30%, Indusind Bank up by 2.09%, Tata Steel up by 1.85%, Kotak Mahindra Bank up by 1.82% and Vedanta up by 1.78%. (Provisional)

On the flip side, UPL down by 3.57%, Indian Oil Corporation down by 1.90%, HPCL down by 1.79%, ONGC down by 1.24% and HCL Tech down by 1.21% were the top losers. (Provisional)

European markets were trading in green; Germany’s DAX increased 55.33 points or 0.43% to 12,733.30, France’s CAC rose 18.71 points or 0.35% to 5,409.34 and UK’s FTSE 100 was up by 90.30 points or 1.17% to 7,694.15.

Asian equity markets ended mostly higher on Wednesday as investors took trade tensions in their stride and looked ahead to the Bank of England monetary policy meeting Thursday and Friday's OPEC meeting for directional cues. Chinese shares closed higher after the People's Bank of China said in a working paper that China should appropriately reduce its reserve requirements to ease burdens on financial institutions and smooth the interest rate transmission mechanism. The central bank also injected funds into the financial system via its medium-term lending facility to offset liquidity pressure. Further, Japanese shares ended higher as the dollar rose against the yen.