Post Session: Quick Review

Monday turned out to be a disappointing session of trade for Indian equity benchmarks where frontline gauges ended the session with a cut of around half a percent amid weak global cues. Domestic indices made a slightly positive start but soon erased gains as sentiments turned pessimistic with report of the Reserve Bank of India stating that India’s external debt stood at $529.7 billion at the end of March 2018, recording an increase of $58.4 billion year-on-year, primarily on account of a rise in commercial borrowings, short-term debt and non-resident Indian (NRI) deposits. Market participants also remained worried on a report from Department of Industrial Policy and Promotion (DIPP) which highlighted that India’s foreign direct investment (FDI) growth rate hit five-year low of 3% in 2017-18. According to the latest data of the Department of Industrial Policy and Promotion (DIPP) inflows grew by only 3% to $44.85 billion in 2017-18. There was also caution among investors with reports that India’s fiscal deficit has exceeded 55% of Budget estimate in first two months of FY19. Traders failed to draw any sense of relief from a report that the revenue collections for May from the goods and services tax (GST) have come in at Rs 95,610 crore, of which Rs 31,645 crore will flow into central kitty and Rs 36,683 crore will go to the states. The collections for April were Rs 94,016 crore while the average for the last fiscal stood at just below Rs 90,000 crore.

However, key indices gave up most of their losses in last leg of trade to come off their intraday low points, due to some buying witnessed in IT and TECK stocks. Traders also found some support with a private survey showing that India’s manufacturing conditions improved in June at the strongest pace in 2018 so far, as favourable demand conditions led to greater output. The Nikkei India Manufacturing Purchasing Managers' Index, or PMI, rose to 53.1 in June from 51.2 in May. Some comfort came with a report that Indian economy is set for a surge and in the next decade, probably even by 2025, India is expected to double the size of the GDP to $ 5 trillion.

On the global front, Asian markets ended in red, after surveys showed a deteriorating outlook for Chinese manufacturing ahead of higher tariffs expected to be imposed by Beijing and Washington starting Friday. In Japan, confidence among large manufacturers weakened for the second straight quarter in three months to June amid growing concerns about the potential impact of trade friction on the global economy. European markets were trading in red in early deals on Monday, as investors questioned the stability of the German government and wider trade links between the European Union and the U.S.

Back home, select Pharma stocks ended higher amid report that Indian pharmaceutical market returned to double digit growth of 10.8 percent in May for the first time in over a year indicating the pangs of transitioning to the Goods and Service Tax (GST) regime have been left behind. Besides, auto stocks were also in limelight as companies report their sales number today. 

The BSE Sensex ended at 35273.25, down by 150.23 points or 0.42% after trading in a range of 35106.57 and 35578.24. There were 11 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.80%, while Small cap index was down by 0.71%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 1.07%, TECK up by 0.53% and Consumer Durables up by 0.26%, while Telecom down by 2.76%, Metal down by 1.88%, Power down by 1.82%, Utilities down by 1.55% and Realty down by 1.32% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 2.53%, Asian Paints up by 2.37%, Bajaj Auto up by 1.02%, Vedanta up by 0.83% and ICICI Bank up by 0.73%. (Provisional)

On the flip side, NTPC down by 3.76%, Bharti Airtel down by 3.75%, Adani Ports &SEZ down by 2.47%, Hero MotoCorp down by 1.90% and HDFC Bank down by 1.71% were the top losers. (Provisional)

Meanwhile, India’s foreign direct investment (FDI) growth rate hit five-year low of 3% in 2017-18. According to the latest data of the Department of Industrial Policy and Promotion (DIPP) inflows grew by only 3% to $44.85 billion in 2017-18. Before this, foreign inflows in the country grew by 8.67% in 2016-17, 29% in 2015-16, 27% in 2014-15, and 8% in 2013-14. However, it recorded a negative growth of 38% in 2012-13.

As per the data, the key sectors which received maximum foreign inflows in the last fiscal are services ($6.7 billion), computer software and hardware ($6.15 billion), telecommunications ($6.21 billion), trading ($4.34 billion), construction ($2.73 billion) automobile ($2 billion) and power ($1.62 billion).

For India, Mauritius has emerged as the largest source with $15.94 billion in 2017-18 followed by Singapore ($12.18 billion), Netherlands ($2.8 billion), the US ($2.1 billion) and Japan ($1.61 billion). The data also showed that the FDI equity inflow of $44.8 billion in 2017-18 and it is the highest ever for any financial year.
FDI is important as India would require huge investments in the coming years to overhaul its infrastructure sector to boost growth. Decline in foreign inflows could put pressure on the country's balance of payments and may also impact the value of the rupee.

The CNX Nifty is currently trading at 10659.45, down by 54.85 points or 0.51% after trading in a range of 10604.65 and 10736.15. There were 18 stocks advancing against 32 stocks declining on the index. (Provisional)

The top gainers on Nifty were Infosys up by 2.45%, Asian Paints up by 2.31%, Titan Co up by 1.79%, Bajaj Auto up by 1.06% and UPL up by 0.96%. (Provisional)
On the flip side, NTPC down by 3.85%, Bharti Airtel down by 3.64%, Hindalco down by 3.23%, Adani Ports &SEZ down by 2.71% and Indiabulls Housing Finance down by 2.49% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 66.57 points or 0.54% to 12,239.43, France’s CAC dipped 54.26 points or 1.03% to 5,269.27 and UK’s FTSE 100 was down by -71.67 points or 0.95% to 7,565.26.

Asian equity markets ended lower on Monday as trade worries persisted, oil prices declined on supply worries, Chinese manufacturing data came in softer than expected and a resolution to Germany's government crisis proved elusive. Crude oil prices fell more than 1 percent in Asian trading after US President Donald Trump claimed that Saudi Arabia has agreed to raise oil production. Chinese shares ended lower after surveys showed deterioration in the outlook for Chinese manufacturing, adding to concerns over tighter government controls on lending. Further, Japanese shares hit 2-1/2-month lows as the dollar pared back gains against the yen ahead of a July 6 deadline when the United States is due to impose the tariffs on Chinese exports. A slump in China's stock market and weak data on manufacturer sentiment also forced investors to unwind long positions. Meanwhile, Hong Kong markets were closed for SAR Day holiday.