Post Session: Quick Review

Friday’s trading session turned out to be an extremely sanguine one for local equity markets, which gained from strength-to-strength and finally concluded near day’s highest point speculatively, backed by positive global cues. Hectic buying activity which took place during last leg of trade drove the markets higher with key gauges surpassing their crucial 35,400 (Sensex) and 10,700 (Nifty) bastions. Traders remained optimistic since morning with markets making a positive opening, on fresh buying by investors as the July derivatives contracts started on a strong note amid recovery in the rupee. Traders took encouragement with the International Monetary Fund (IMF) suggesting steps to sustain the high growth rate which India has achieved. It said that the country should carry out banking sector reforms; continue with fiscal consolidation, simplify and streamline GST; and renew impetus on reforms. 

Markets extended their northward journey in noon deals, taking support from a private report stating that the second quarter of calendar year 2018 saw the biggest ever private equity (PE) investments in India. The PE firms have invested a record $8.2 billion during the quarter ended June 2018, an increase of 60% compared with $5.1 billion in the same period last year. Traders also took note of a report which highlighted that India may withdraw the notification imposing additional duties on 29 US products, which will be effective from August 4, if both the sides are able to sort out the differences over tariffs. Investors paid no heed towards report from World Bank which stated that climate change could cost India 2.8% of GDP, and depress living standards of nearly half of its population by 2050, as average annual temperatures are expected to rise by 1-2% over three decades.

Back home, textile sector was in limelight after Textile Commissioner Kavita Gupta said that the technical textiles industry is projected to grow at 20 percent year-on-year and the segment's potential is largely untapped in the country. Besides, Public sector bank was in focus after a report highlighted that Public sector banks are planning a common portal to offer competitive and instant personal, housing and retail loans to customers as a part of scaling up the government's financial inclusion drive. 

On the global front, Asian markets ended in green, as China recovered from a recent slump amid worries over trade tensions between Washington and Beijing. European markets were trading in green in early deals on Friday, after European Union leaders working overnight knocked out an agreement on refugees, a deal seen as removing political risk that had been hanging over equities.

The BSE Sensex ended at 35431.06, up by 393.42 points or 1.12% after trading in a range of 35099.65 and 35459.05. There were 24 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.87%, while Small cap index was up by 1.94%.(Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.93%, Oil & Gas up by 2.88%, Capital Goods up by 2.83%, Utilities up by 2.81% and Metal up by 2.78%, while there were no losing sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 3.98%, Yes Bank up by 3.30%, Bajaj Auto up by 3.23%, Reliance Industries up by 3.10% and Adani Ports &SEZ up by 2.86%. (Provisional)

On the flip side, Indusind Bank down by 1.37%, Mahindra & Mahindra down by 1.24%, HDFC Bank down by 1.20%, Hero MotoCorp down by 1.10% and Asian Paints down by 0.23% were the top losers. (Provisional)

Meanwhile, in order to sustain the high growth rate, the International Monetary Fund (IMF) has suggested three steps. It said that the country should carry out banking sector reforms; continue with fiscal consolidation, simplify and streamline GST; and renew impetus on reforms. It also expects that the recovery in the country’s growth to continue in fiscal year 2019 (FY19). It also projected the growth at 7.4 percent and 7.8 percent in FY19 and FY20, respectively.

IMF Communications Director Gerry Rice elaborated the steps one, to revive a bank credit and enhance the efficiency of credit provision; by accelerating the cleanup of bank and corporate balance sheets and enhancing the government of public sector banks. Point two, to continue fiscal consolidation and to lower elevated public debt levels supported by simplifying and streamlining the goods and services tax (GST) structure.

And thirdly, Rice said over the medium-term, renew impetus to reforms of key markets, like labour and land, as well as improving the overall business climate would be crucial to improving competitiveness and again, maintaining that very high level of growth in India. Besides, the country’s growth accelerated to 7.7 percent in the fourth quarter of FY18 and that was up from 7 percent in the previous quarter.

The CNX Nifty ended at 10716.55, up by 127.45 points or 1.20% after trading in a range of 10612.35 and 10723.05. There were 40 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 6.42%, Titan Co up by 4.87%, Hindalco up by 4.12%, Tata Steel up by 3.80% and Bajaj Auto up by 3.38%.(Provisional)

On the flip side, Dr. Reddys Lab down by 3.01%, Tech Mahindra down by 2.04%, Indusind Bank down by 1.72%, Mahindra & Mahindra down by 1.23% and Hero MotoCorp down by 1.17% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX increased 129.50 points or 1.05% to 12,306.73, France’s CAC rose 68.70 points or 1.29% to 5,344.34 and UK’s FTSE 100 was up by 63.91 points or 0.83% to 7,679.54.

Asian equity markets ended higher on Friday after China eased restrictions on foreign investment in sectors including banking, automotive, heavy industry and agriculture amid scrutiny from its top trading partners, the United States and the European Union. They were complaining that Beijing limits foreign firms' ability to enter the world's second-largest economy. Chinese shares ended higher, the largest single-day gain since August 2016, as authorities eased foreign investment curbs. Speculation was also rife that the People's Bank of China will lower the reserve ratios for some banks next week. Further, Japanese shares ended modestly higher as the yen fell out of favor and EU leaders reached a deal on migration after more than 12 hours of negotiations.