Post Session: Quick Review

Indian equity benchmarks ended the volatile day of trade with marginal gains, tracking mostly positive Asian markets. Markets started the session on pessimistic note and traded with small losses as traders were cautious on report stating that the increase in minimum support prices (MSP) by the government is set to bump up the Reserve Bank of India’s already heightened inflation forecast and will likely lead to higher interest rates at the next monetary policy review on August 1 and possibly another before the year ends. Key indices quickly erased their losses and entered into green terrain, as sentiments turned optimistic with private report that a lower base in the previous year’s quarter and likely good show by select companies in sectors such as automobiles, capital goods, FMCG, IT, and metals should help the Nifty 50 companies report a double-digit growth in aggregate sales and profits for the June 2018 quarter. Markets gained traction and traded in fine fettle, as optimism remained on the street with a private report stating that the Indian engineering exports have managed to grow by close to 20% for the April-May, 2018, reflecting a so far so good scenario even as the US - China tariff war has spread to some key trading markets in Europe, Canada and Mexico and shows no early signs of abating.

However, domestic indices failed to hold on to their gains and went home with marginal gains, as some selling pressure was seen in the last hour of trade. Traders failed to draw any sense of relief from a private report stating that economic activity is indeed improving after robust services PMI data showed that the manufacturing sector is growing at a robust pace, providing a big boost to the government at the centre. The market participants even overlooked India’s outgoing chief economic advisor Arvind Subramanian’s statement that the country can handle shocks from external factors like high oil prices and a strong dollar.

On the global front, Asian markets ended mostly in green. European markets were trading mostly in green in early deals on Friday, as the trade dispute between the United States and China escalated with U.S. tariffs on $34 billion in Chinese imports taking effect and China immediately retaliating.

Back home, textile sector was in limelight after the Indian Textiles Accessories and Machinery Manufacturers (ITAMMA) said India is poised to overtake China in the textile sector by capitalizing on factors such as cheaper labour and modernisation and Tamil Nadu will have a major role to play in it. Besides, Airline stocks ended higher, supported with a private report stating that the number of flyers in the months of April and May rising 17.7% to 9.4 lakh every day on average.

The BSE Sensex ended at 35644.56, up by 70.01 points or 0.20% after trading in a range of 35532.21 and 35799.71. There were 16 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices were trading in green; the BSE Mid cap index was up by 0.52%, while Small cap index was up by 0.39%.(Provisional)

The top gaining sectoral indices on the BSE were Industrials up by 1.44%, Auto up by 1.29%, Capital Goods up by 1.13%, Realty up by 1.01% and Energy up by 0.94%, while Healthcare down by 0.82%, FMCG down by 0.33%, Consumer Durables down by 0.32%, Telecom down by 0.24% and Utilities down by 0.12% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 3.81%, Tata Motors up by 3.71%, Tata Motors - DVR up by 2.12%, Bajaj Auto up by 1.83% and TCS up by 1.71%. (Provisional)

On the flip side, NTPC down by 1.28%, Sun Pharma down by 1.11%, HDFC down by 0.91%, Wipro down by 0.85% and Vedanta down by 0.72% were the top losers. (Provisional)

Meanwhile, continuing rising trend, scheduled commercial bank credit jumped in the fortnight ended June 22, 2018. As per the latest data from the Reserve Bank of India (RBI), banks’ credit growth increased 12.84% to Rs 86,16,408 crore as on June 22. Besides, in the year-ago fortnight, bank loans stood at Rs 76,35,689 crore.

The data also showed that the growth in advances was slightly higher than the growth registered in the previous fortnight ended June 8. It had risen by 12.67% to Rs 85,98,703 crore. During the period under review, bank deposits had risen by 7.59% to Rs 113,53,525 crore, compared with Rs 105,51,910 crore in the period ended June 23, 2017. The growth in deposits was slower than the period ended June 8, when it had increased by 8.35% to Rs 114,04,303 crore.

In May, non-food bank credit increased by 11.1% year-on-year, compared with an increase of 4.1% in May last year. Loans to industry rose by 1.4% in May 2018, against a contraction of 2.1% in May 2017. Advances to agriculture and allied activities increased 6.4% in May 2018, compared with an increase of 7.4% in May 2017.

The CNX Nifty ended at 10767.60, up by 17.85 points or 0.17% after trading in a range of 10735.05 and 10816.35. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were HPCL up by 4.70%, Hero MotoCorp up by 3.69%, Tata Motors up by 3.56%, Grasim Industries up by 1.98% and TCS up by 1.83%. (Provisional)

On the flip side, Cipla down by 2.47%, Tech Mahindra down by 1.71%, Bharti Infratel down by 1.47%, Zee Entertainment down by 1.40% and NTPC down by 1.35% were the top losers. (Provisional)

European markets were trading mostly in green; Germany’s DAX increased 0.80 points or 0.01% to 12,465.09, UK’s FTSE 100 was up by 2.83 points or 0.05% to 5,369.15, while France’s CAC shed 9.46 points or 0.12% to 7,593.76.

Asian equity markets ended mixed on Friday as investors responded with calm to the US tariffs on 34 billion dollars worth of Chinese imports that took effect after midnight Thursday. China said it is ‘forced to make a necessary counterattack’ in equal measure. Chinese shares clawed back earlier losses, but lengthened a string of weekly declines as Washington’s tariffs on Chinese goods took effect, escalating the trade row between the world’s two largest economies. Meanwhile, Japanese shares rose for the first time this week, as investors took heart from gains in Chinese stocks and covered their short positions after early wobbles when Washington’s tariffs on Chinese imports took effect.