Post Session: Quick Review

Buying activity which took place during last leg of trade mainly helped key domestic benchmarks not only to end Friday’s session near intraday high levels but also recapture their crucial 10,800 (Nifty) and 35,650 (Sensex) bastions. Earlier, the market made a weak start, tracking a sell-off in global markets amid escalating trade war worries. Investors took cautious approach on union minister Suresh Prabhu’s statement that India was seeing real challenge at World Trade Organsation and in the global trading system itself. He stated that because, first time, countries are putting roadblocks and it is going to be real, real issue.

However, in the second half of the day, key indices reversed their losses and traded slightly in green, as the sentiments turned optimistic with report stating that exports from special economic zones (SEZs) grew by 38% in May to Rs 29,236 crore. The major sectors contributing to the growth include biotech, chemicals, pharmaceuticals, computers, electronics, non-conventional energy, plastic, rubber, trading and services. The street was also finding support with a private report stating that India fared well on its early warning indicators (EWI) index showing no signs of domestic or financial risks during the last three years.

Buying got intensified during final hours of trade, as sentiments were buoyed with World Bank’s data report that India continued to be the world’s top recipient of remittance from its diaspora, gathering $69 billion in 2017-nearly 1.5 times India’s defence budget for 2018-19-an increase of 9.5% from the previous year. Traders were also encouraged with Prime Minister Narendra Modi calling for targeting double-digit GDP growth for breaking into the $5 trillion economy club and said India's share in world trade has to more than double to 3.4%.

On the global front, Asian markets ended mixed on signs U.S. trade battles with China and many other countries are starting to chip away at corporate profits, with oil prices choppy ahead of major producers meeting to discuss raising output. European markets were trading in green in early deals on Friday, despite the eruption of a global trade war as Brussels slapped retaliatory tariffs on the United States.

Back home, banking stocks were under pressure despite Financial Services Secretary Rajiv Kumar stating that bad loans worth Rs 15,000 crore will be wiped off the banking system with their reversal into standard accounts in the June quarter following new norms for differential treatment of defaults by small and mid-sized businesses. However, shares related to cement sector were trading higher on report that Mid-level companies, which have a localised footprint in India’s highly regional cement industry, have revealed plans to more than double their capacity, and enhance output to about 15-20 MT in the next four or five years through a combination of brownfield and greenfield expansions. The exercise also seeks to help diversify their geographic bases.

The BSE Sensex ended at 35697.18, up by 264.79 points or 0.75% after trading in a range of 35344.49 and 35741.26. There were 23 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.49%, while Small cap index up by 0.02%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.33%, Telecom up by 1.16%, Bankex up by 1.15%, Power up by 1.05% and Utilities up by 0.94%, while Energy down by 1.34%, Oil & Gas down by 0.46% and IT down by 0.14% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 4.06%, Mahindra & Mahindra up by 3.09%, HDFC up by 2.66%, Axis Bank up by 2.29% and NTPC up by 1.77%. (Provisional)

On the flip side, Reliance Industries down by 1.93%, Coal India down by 1.16%, TCS down by 0.49%, ONGC down by 0.28% and Vedanta down by 0.26% were the top losers. (Provisional)

Meanwhile, India’s exports from special economic zones (SEZs) jumped 38% to Rs 29,236 crore in the month of May 2018. As per the Export Promotion Council for EoUs and SEZs (EPCES) data, exports from these zones grew by 11% to Rs 1.01 lakh crore during April-May period of current fiscal year (FY19). Besides, in 2017-18 exports from these zones rose by about 15% to Rs 5.52 lakh crore.

The data showed that major sectors which contributed to the growth are biotech, chemicals, pharmaceuticals, computers, electronics, non-conventional energy, plastic, rubber, trading and services. The officiating chairman of EPCES Vinay Sharma has said that the healthy pace of growth in exports from SEZs once again reflects the increasing economical impact of these zones and its contribution to the country’s export earnings.

EPCES data reveled that the UAE, US and Saudi Arabia were the major export destinations. However, regions like Hong Kong, Africa, Kenya and Oman have showed negative trends. These zones enjoy certain fiscal and non-fiscal incentives such as no license requirement for import; full freedom for subcontracting; and no routine examination by customs authorities of export/import cargo. They also enjoy direct and indirect tax benefits.

The CNX Nifty ended at 10825.45, up by 84.35 points or 0.79% after trading in a range of 10710.45 and 10837.00. There were 38 stocks advancing against 12 stocks declining on the index. (Provisional)

The top gainers on Nifty were Sun Pharma up by 4.36%, Bajaj Finance up by 3.57%, Mahindra & Mahindra up by 3.01%, Bajaj Finserv up by 2.98% and HDFC up by 2.75%. (Provisional)

On the flip side, Reliance Industries down by 1.90%, HPCL down by 1.59%, UPL down by 1.22%, Coal India down by 1.12% and Eicher Motors down by 0.73% were the top losers. (Provisional)

European markets were trading in green; Germany’s DAX increased 27.40 points or 0.22% to 12,539.31, France’s CAC rose 34.70 points or 0.65% to 5,350.71 and UK’s FTSE 100 was up by 53.66 points or 0.71% to 7,610.10 .

Asian equity markets ended mixed on Friday as worries about tariffs and a potential trade war persisted and investors waited for the OPEC meeting outcome. Chinese shares rose but posted their worst weekly loss since early February on worries over a continuing trade battle with the US. Trade worries lingered after China's commerce ministry spokesman Gao Feng accused the US of using bullying tactics and blackmail in threatening to impose tariffs on hundreds of billions of dollars of Chinese imports. Separately, US Commerce Secretary Wilbur Ross said on Thursday the end goal of the trade negotiations is to reduce high trade barriers and tariffs for US firms. Meanwhile, Japanese shares fell as a firmer yen and tariff concerns pulled down automakers.