Post Session: Quick Review

Indian equity benchmarks traded on a weak note throughout the day on Monday and sharp selloff in last hour of trade largely forced the markets to close near day’s low, with Sensex breaching crucial 35,500 mark. Markets traded in red since the beginning, following weak Asian peers, as growing trade tensions between the United States and major economies of the world continued to dampen investors’ sentiments. Some pessimism also came with a report stating that foreign investors have pulled out over Rs 14,500 crore from the Indian capital markets this month so far, primarily due to global trade war and hawkish commentary by the US Federal Reserve. Traders failed to get any sense of relief with the industry body, Confederation of Indian Industry (CII) stating that Indian companies’ overseas investments are likely to go up. The industry chamber, citing a World Investment Report of UNCTAD, has said that India’s total cumulative stock of overseas foreign direct investment (OFDI) amounted to $155 billion in 2017.

Selling got intensified during final hours of trade, as sentiments on the street weakened further with Reserve Bank of India’s (RBI) data showing that India’s foreign exchange reserves fell by $3.03 billion to $410.070 billion as on June 15. Foreign currency assets, which form a key component of reserves, fell by $3.05 billion from the previous week to $385.333 billion. Anxiety remained among the traders with a private report stating that goods and services tax (GST) has not delivered on the promised formalisation of the economy as yet, while the glitches in the one-nation-one-tax regime has increased the demand for cash. Moreover, depreciation in Indian rupee too dampened sentiments. The rupee depreciated by 30 paise to trade at 68.12 against the US dollar at the time of equity markets closing due to fresh buying of the American currency by banks and importers.

On the global front, Asian markets ended mostly in red amid worries about U.S.-China trade tensions after the Wall Street Journal reported that U.S. President Donald Trump plans to bar Chinese companies from investing in America. European markets were trading in red in early deals on Monday, as investors were worried over the festering global trade war. Back home, banking sector was in limelight after Piyush Goyal stated that the banking system is now poised for a better future and support the credit needs of the economy having recognized the huge pile of NPAs hidden on bank books by ‘biting the bullet’.

The BSE Sensex ended at 35452.65, down by 236.95 points or 0.66% after trading in a range of 35430.11 and 35806.97. There were 7 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index dropped by 0.92%, while Small cap index was down by 0.93%. (Provisional)

The only gaining sectoral indices on the BSE were IT up by 0.77% and TECK up by 0.52%, while PSU down by 1.92%, Industrials down by 1.91%, Oil & Gas down by 1.73%, Auto down by 1.59% and Energy down by 1.48% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 1.83%, Kotak Mahindra Bank up by 0.69%, Vedanta up by 0.68%, HDFC Bank up by 0.57% and TCS up by 0.48%. (Provisional)

On the flip side, Tata Motors - DVR down by 7.08%, Tata Motors down by 6.07%, ICICI Bank down by 3.79%, Power Grid down by 2.40% and Coal India down by 2.21% were the top losers. (Provisional)

Meanwhile, with the stable market conditions and the significant impact created by Indian companies on local economies, the industry body, Confederation of Indian Industry (CII) has said that Indian companies’ overseas investments are likely to go up.

The industry chamber, citing a World Investment Report of UNCTAD, has said that India’s total cumulative stock of overseas foreign direct investment (OFDI) amounted to $155 billion in 2017. It also said that Indian companies have been working with the local communities while investing abroad, generating substantial employment and creating benefits for the host economies.

CII tracks overseas investments by Indian companies in major countries to provide insights about their scale and performance and the impact they have on these economies. These surveys have been conducted in the US, the UK, China, South Africa, and Germany. As per its various surveys, the major sectors of interest for Indian companies in these countries are information technology (IT), pharmaceuticals, manufacturing, automotive, financial services, and business services, among others.

The CNX Nifty ended at 10757.10, down by 64.75 points or 0.60% after trading in a range of 10753.05 and 10831.05. There were 15 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 2.89%, Bajaj Finance up by 2.34%, Bharti Infratel up by 1.96%, Infosys up by 1.84% and Lupin up by 1.45%. (Provisional)

On the flip side, Tata Motors down by 6.19%, HPCL down by 4.39%, BPCL down by 3.94%, ICICI Bank down by 3.71% and Larsen & Toubro down by 2.60% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 178.68 points or 0.80% to 12,426.06, France’s CAC shed 44.49 points or 0.83% to 5,342.89 and UK’s FTSE 100 was down by 74.40 points or 0.98% to 7,607.87.

Asian equity markets ended mostly lower on Monday as trade worries persisted and oil prices gave up some of their hefty gains made on Friday after OPEC pledged to increase production by less than the market feared. Chinese shares ended lower as news of a cut in reserve requirement ratio for some banks was offset by lingering trade war fears. Further, Japanese shares ended lower as the yen firmed up in reaction to reports suggesting that the Trump administration plans to put curbs on Chinese investment in US technology firms.