Post Session: Quick Review

Indian equity benchmarks traded in fine fettle for most part of the day but failed to remain in the green territory and ended with minor cut.  Domestic indices began trading on a negative note, amid feeble global cues. Some concerns came with the Reserve Bank of India’s (RBI) report that Indian companies’ investments into their overseas subsidiaries/joint ventures fell by 63% to $1.17 billion in May this year. However, the losses were quickly pared, and the benchmark index retreated to trade in positive range, as traders took support with Employees’ Provident Fund Organisation’s (EPFO) payroll data showing that as many as 41.26 lakh new jobs were created in the eight months till April this year, with largest ever addition of 6.85 lakh in April alone.  Some optimism also came with interim finance minister Piyush Goyal’s statement that the country is on a ‘safe wicket’ as far as the rupee is concerned and the currency will be stable in the long-term.

Sentiments remained positive with a report stating that the credit guarantee to the micro and small enterprises (MSEs) sector will double to over Rs 40,000 crore this fiscal under the Credit Guarantee Fund Trust for MSE. Adding some solace, Prime Minister Narendra Modi said that the rising crude prices have not resulted in a spike in inflation and the macroeconomic fundamentals of the country remain strong. However, key indices gave up all of their gains in last leg of trade to come off their intraday high points, as anxiety remained among the traders with Asian Infrastructure Investment Bank (AIIB) president’s statement that the current global scenario is risky and the ongoing issues need to be resolved soon so as to avoid an all-out trade war. The ongoing trade war between the US and China is a global concern and could easily impact the global economic growth. 

On the global front, Asian markets ended mostly in red. European markets were trading in green in early deals on Tuesday rebounding after trade concerns caused a sharp sell-off for global markets in the previous session. Back home, shares of cement companies ended higher as the goods and services tax (GST) Council will consider a proposal to reduce GST rates on more items used in construction to 18% from 28%.

The BSE Sensex ended at 35470.17, down by 0.18 points after trading in a range of 35338.09 and 35616.64. There were 18 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell by 0.40%, while Small cap index was down by 0.69%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 1.09%, TECK up by 0.77%, IT up by 0.73%, FMCG up by 0.58% and Consumer Durables up by 0.39%, while Energy down by 1.17%, Power down by 0.96%, Industrials down by 0.87%, Realty down by 0.82% and Utilities down by 0.70% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 2.16%, Asian Paints up by 1.97%, TCS up by 1.79%, Bharti Airtel up by 1.67% and Maruti Suzuki up by 1.64%. (Provisional)

On the flip side, Tata Motors down by 4.31%, Reliance Industries down by 2.50%, Power Grid down by 2.28%, Tata Motors - DVR down by 1.96% and Tata Steel down by 1.65% were the top losers. (Provisional)

Meanwhile, Indian companies’ investments into their overseas subsidiaries/joint ventures have dropped by 63% to $1.17 billion in May 2018 as compared to $3.12 billion in May 2017. According to RBI data, in April 2018, the outward foreign direct investment (OFDI) of Indian firms was $3.56 billion. Cumulatively, the overseas direct investment in first two months (April-May) of this fiscal stood at $4.73 billion.

As per the data, of the total investment by domestic firms in overseas ventures in the month under review, $374.18 million was in the form of equity infusion, $162.96 million in loan and $630.45 million as guarantee issuances. Among the major companies that made investment in their overseas subsidiaries/joint ventures included Indiabulls Real Estate $368.09 million, ONGC $57.94 million, Tata Hitachi Construction Machinery $26.62 million and Wadhawan Global Captial $15.23 million.

Besides, Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek recently had said that foreign direct investment (FDI) in the country witnessed a growth during 2017-18 to reach at $61.96 billion. India’s FDI inflows dropped to $40 billion in 2017 as compared to $44 billion in 2016. It also indicated that in South Asia, FDI inflows contracted by 4% to $52 billion, due to a fall in inflows to India.

The CNX Nifty ended at 10759.15, down by 3.30 points or 0.03% after trading in a range of 10732.55 and 10805.25. There were 26 stocks advancing against 24 stocks declining on the index. (Provisional)

The top gainers on Nifty were Grasim Industries up by 3.07%, Coal India up by 2.36%, Ultratech Cement up by 2.28%, Hindalco up by 2.17% and Asian Paints up by 2.04%. (Provisional)

On the flip side, Tata Motors down by 4.41%, Reliance Industries down by 2.58%, Cipla down by 2.13%, Power Grid down by 2.11% and Eicher Motors down by 1.66% were the top losers. (Provisional)

European markets were trading in green; Germany’s DAX increased 34.82 points or 0.28% to 12,305.15, France’s CAC added 22.57 points or 0.43% to 5,306.43 and UK’s FTSE 100 was up by 40.12 points or 0.53% to 7,549.96.

Asian equity markets ended mostly in red on Tuesday amid conflicting signals from the Trump administration over proposed restrictions on foreign investment in US technology companies. Chinese shares ended lower ahead of manufacturing and non-manufacturing data due on Saturday. However, Japanese shares finished marginally higher after hitting 3-1/2-week lows earlier in the day on concerns over a deepening trade row between the United States and major economies.