Benchmarks settle in green; Nifty ends just shy of 10,700 mark

Recouping some of their previous session’s losses, Indian equity benchmarks ended the Tuesday’s trade in green terrain with frontline gauges ending just shy of their crucial 10,700 (Nifty) and 35,400 (Sensex) levels. Markets soon after a flat start gained momentum and traded with traction during the day as traders took some encouragement 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% of the annual target in the first two months of the financial year. Traders also took some support 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 support also came with report highlighting that a widespread makeover is being witnessed in the Indian economy especially on the poverty reduction front as goods and services tax (GST) completes one year since its introduction last year. Adding to the sanguinity, the commerce ministry stated that India has agreed to provide tariff concessions on 3,142 products to the six member nations of the Asia Pacific Trade Agreement (APTA) effective from July 01.

The markets 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, gains remained capped up to certain levels as traders remained concerned over ongoing trade tensions between world’s largest economies US and China. Meanwhile, growth in output of the crucial eight core industries declined to a 10-month low of 3.6% 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% weightage in the index.

Firm opening in European counters aided sentiments even as concerns persist over trade relations between the US and other major economies. On the data front, a report on Eurozone retails is due later in the session. Across the Atlantic, the Commerce Department’s report on factory orders in the month of May could attract some attention ahead of the July 04 holiday. However, Asian markets ended mostly in red, ahead of the July 6 deadline when the United States is due to impose the tariffs on Chinese exports.

Back home, Niti Aayog CEO Amitabh Kant has said the economic development of South Asia has been ‘severely hampered’ due to lack of intra-regional trade and stressed on the need for a greater push to investments, travel and tourism in the region. On the sectoral front, 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. However, 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.

Finally, the BSE Sensex rose 114.19 points or 0.32% to 35,378.60, while the CNX Nifty was up by 42.60 points or 0.40% to 10,699.90.

The BSE Sensex touched a high and a low of 35,445.21 and 35,195.63, respectively and there were 18 stocks advancing against 13 stocks declining on the index.
The broader indices ended in green; the BSE Mid cap index surged by 0.69%, while Small cap index up by 0.44%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.80%, IT up by 1.07%, Auto up by 1.00%, TECK up by 0.95% and Energy was up by 0.87%, while Metal down by 0.27%, Bankex down by 0.19%, Consumer Durables down by 0.09%, Telecom down by 0.09% and Capital Goods was down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.79%, Maruti Suzuki up by 1.72%, Infosys up by 1.44%, ONGC up by 1.28% and Reliance Industries up by 1.10%. On the flip side, Vedanta down by 3.25%, ICICI Bank down by 1.62%, HDFC down by 0.56%, SBI down by 0.52% and Power Grid Corporation down by 0.40% were the top losers.

Meanwhile, the commerce ministry has stated that India has agreed to provide tariff concessions on 3,142 products to the six member nations of the Asia Pacific Trade Agreement (APTA) effective from July 01, 2018. However, these duty concessions will be more for least developed countries (LDCs) and less for developing nations. The six member countries are Bangladesh, China, India, Laos, Korea and Sri Lanka.

The fourth round of trade negotiations were formally concluded and signed by the ministers of the member countries during their meeting on January 13 last year. With the implementation of this decision, the coverage of preferences of total tariff lines for each member would come of 10,677 products, up from 4,270 items at the conclusion of the third round and deepen the average margin of preference (MoP) being provided under the agreement to 31.52%. But, LDC members are entitled to greater concessions on 1,249 items with an average MoP of 81%.

APTA is an initiative under the United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP) for trade expansion through exchange of tariff concessions among developing country members of the Asia Pacific Region and it is in place since 1975. Under a free trade agreement, countries cut or eliminate duties on most number of goods traded between them besides liberalising norms to promote services trade and investments. But, under a PTA, duties are eliminated on a certain number of identified items.

The CNX Nifty traded in a range of 10,713.30 and 10,630.25. There were 32 stocks in green as against 17 stocks in red, while one stock remained unchanged on the index.

The top gainers on Nifty were Cipla up by 4.21%, Bajaj Finserv up by 2.06%, Maruti Suzuki up by 1.90%, Lupin up by 1.87% and Sun Pharma up by 1.69%. On the flip side, Vedanta down by 3.69%, Bharti Infratel down by 2.48%, ICICI Bank down by 1.50%, HDFC down by 0.79% and Ultratech Cement down by 0.70% were the top losers.

All European markets were trading in green; UK’s FTSE 100 gained 48.88 points or 0.58% to 7,591.73, France’s CAC increased 51.63 points or 0.97% to 5,328.39 and Germany’s DAX was up by 159.67 points or 1.29% to 12,397.84.

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.