Post Session: Quick Review

Indian equity benchmarks ended the volatile day of trade with a gain of around half a percent with frontline gauges recapturing their crucial 10,700 (Nifty) and 35,400 (Sensex) levels. Markets made a cautious start as traders were wary with report highlighting that growth in output of the crucial eight core industries declined to a 10-month low of 3.6 per cent in May due to a fall in the pace of growth of steel, cement as well as contraction in crude and natural gas. This might have an adverse impact on the index of industrial production (IIP) as core industries have 40 per cent weightage in the index. However, markets quickly took U-turn and traded in green terrain as traders opted to buy beaten-down but fundamentally strong stocks. Some support came with Finance Minister Piyush Goyal’s statement that India will be able to restrict the fiscal deficit below the budgeted level of 3.3 per cent of GDP in 2018-19, which has hit 55 per cent of the annual target in the first two months of the financial year.

Buying further crept in with Commerce Minister Suresh Prabhu’s statement that early data indicate that exports have registered a good performance in June despite volatility in global markets.  Some optimism also spread among the investors with a private report stating that consumer sentiment regarding personal finances, business and buying conditions remained stable in June despite a rate hike by RBI, as consumers said they are benefitting from the revival in growth. Traders also took note of the Labour Ministry’s statement that retail inflation for industrial workers remained flat at 3.96% in May compared to 3.97% in April this year. The food inflation based on CPI-IW stood at 1.66% in May against 1.33% in the previous month. However, further up move got restricted with reports that Leading stock exchange BSE will delist as many as 222 companies from tomorrow as trading in their shares has remained suspended for over six months.

On the global front, Asian markets ended mostly in red, as back-and-forth exchanges over possible higher U.S. tariffs for the auto sector deepened concerns that a trade war is brewing. European markets were trading in green in early deals on Tuesday, with German stocks climbing after German Chancellor Angela Merkel steered her coalition government away from immediate collapse by reaching an agreement over migration.

Back home, Public Sector Banks ended in red despite report stating that state-run banks will take the lead in setting up an asset management company (AMC) for the resolution of loans above Rs 500 crore as part of further efforts aimed at rescuing bad assets and restoring lenders to health so that they can focus on credit growth to push forward India's ongoing economic recovery. However, realty stocks ended higher, supported by Crisil’s latest report noting that average rentals of Grade A commercial properties have risen 10% in the last three years, boosting credit profiles of realty players.

The BSE Sensex ended at 35405.08, up by 140.67 points or 0.40% after trading in a range of 35195.63 and 35441.33. There were 20 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.67%, while Small cap index was up by 0.42%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.77%, IT up by 1.08%, Auto up by 1.01%, TECK up by 0.99% and Energy up by 0.86%, while Bankex down by 0.15%, Consumer Durables down by 0.11%, Metal down by 0.05% and Capital Goods down by 0.02% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 1.69%, Maruti Suzuki up by 1.66%, Infosys up by 1.55%, Tata Steel up by 1.31% and ITC up by 1.24%. (Provisional)

On the flip side, Vedanta down by 3.12%, ICICI Bank down by 1.51%, HDFC down by 0.49%, SBI down by 0.39% and Tata Motors - DVR down by 0.35% were the top losers. (Provisional)

Meanwhile, ahead of June exports data release, the Commerce Minister Suresh Prabhu has said early data indicate that exports have registered a good performance in the month of June despite huge volatility in global markets. He further said that merchandise exports recorded 20.18% growth in May. He also stated that the government is also involving state governments in its plans to promote overseas shipments.

In order to boost exports, Prabhu said that they are working on a holistic, comprehensive strategy. Besides, in the last fiscal, the country’s total merchandise exports grew by about 10% to $303 billion. Higher growth in outbound shipments helps create employment opportunities, earn foreign exchange and boost economic activities.

Earlier, the minister said that the government has planned to spend $1 billion to boost export of services from the country as trade in services is growing faster than trade in goods. Further, talking on the Nikkei India Manufacturing Purchasing Managers Index (PMI), he said that many steps initiated by them to increase manufacturing at all levels. Manufacturing PMI improved to 53.1 in June from 51.2 in May, led by robust domestic and external demand.

The CNX Nifty ended at 10708.40, up by 51.10 points or 0.48% after trading in a range of 10630.25 and 10713.30. There were 35 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Cipla up by 4.23%, Bajaj Finserv up by 2.06%, Hindalco up by 1.84%, Maruti Suzuki up by 1.81% and Sun Pharma up by 1.75%. (Provisional)

On the flip side, Vedanta down by 3.61%, Bharti Infratel down by 2.43%, ICICI Bank down by 1.51%, HDFC down by 0.86% and Ultratech Cement down by 0.51% were the top losers. (Provisional)

European markets were trading in green; Germany’s DAX increased 128.31 points or 1.04% to 12,366.48, France’s CAC rose 46.24 points or 0.87% to 5,323.00 and UK’s FTSE 100 was up by 26.82 points or 0.35% to 7,574.67.

Asian equity markets ended mostly lower on Tuesday amid rising US-China trade frictions after the US moved to block China Mobile from entering its telecommunications market on national security grounds. Japanese shares closed near three-month lows as the July 6 deadline loomed for the Trump Administration's planned imposition of tariffs. However, Chinese stocks reversed steep losses to finish on a positive note and the yuan pared losses after sliding through 6.7 per dollar on expectations of intervention from policymakers to halt a rout.