Post Session: Quick Review

Indian equity markets showcased yet another courageous performance on Tuesday with Nifty and Sensex settling above the psychological 10,950 and 36,200 levels respectively. The gains were widespread and buying was visible not only in blue chips but across all sectors barring healthcare. Markets begun the day on a strong note, owing to firm global cues along with optimism over June quarter earnings. Traders took encouragement with rating agency Crisil’s latest report stating that India Inc will deliver the highest quarterly revenue growth in three years at 12.8% in the April-June period, but high oil prices will narrow profit margins by 0.20%. Investors continued to take support with NITI Aayog vice-chairman Rajiv Kumar making a case for promoting Zero Budget Natural Farming (ZBNF) in states, saying it would help in doubling farmers’ income by 2022.

Key indices continued their rally mood to reach at fresh intraday high points in last leg of trade, taking support from an analysis of listed private sector non-financial companies by the RBI which showed that India’s manufacturing sector recorded robust growth in sales and improvement in operating profit growth in the fourth quarter of the last fiscal on yearly basis. The sentiments remained ebullient with BSE Managing Director and CEO Ashishkumar Chauhan’s statement that there was no need to 'panic' over risk management firm Kroll's observations about Indian economy as the country was a thought leader in corporate governance worldwide. Local investors also cheered with Reserve Bank of India’s (RBI) latest report showing that private corporate business sector records robust sales growth in fourth quarter of 2017-18, with the companies posting sales of Rs 9.25 trillion as compared Rs 8.41 trillion in the last quarter of 2016-17.

On the global front, Asian markets ended mostly in green, as overnight gains on Wall Street and the lack of bad news surrounding U.S.-China tariffs boosted sentiments. European markets were trading in green in early deals on Tuesday, as investors focused on upcoming corporate earnings and put trade and political tensions aside.

Back home, select textile stocks ended lower after report stated that India’s apparel exports are estimated to have declined by 17 percent in the first quarter of FY19 due to a slowdown in demand from developed countries following weak economic activity there. Besides, banking sector was in limelight with a private report that banking sector woes are expected to continue in the first quarter of the financial year with weak profits despite a pickup in retail-backed credit growth and easing of fresh bad loans.

The BSE Sensex ended at 36248.89, up by 314.17 points or 0.87% after trading in a range of 36019.63 and 36270.14. There were 21 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.02%, while Small cap index was up by 1.01%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.10%, Energy up by 2.06%, Realty up by 1.66%, Metal up by 1.58% and Utilities up by 1.40%, while Healthcare down by 0.11% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 3.15%, Yes Bank up by 3.05%, Wipro up by 2.45%, Coal India up by 2.34% and Bajaj Auto up by 2.29%. (Provisional)

On the flip side, Hero MotoCorp down by 1.16%, Indusind Bank down by 1.05%, Kotak Mahindra Bank down by 0.89%, Sun Pharma down by 0.83% and TCS down by 0.67% were the top losers. (Provisional)

Meanwhile, ahead of Q1 earnings, rating agency Crisil in its latest report has said that India Inc’s revenue in the first quarter of the current financial year is expected to grow at a 12-quarter high of 12.8%. It added that this would be the third consecutive quarter of double digit growth, but the jump in performance in the earlier two quarters could have been attributed to a low base on account of demonetisation and Goods and Service Tax (GST) implementation slump. The report is based on an analysis of 350 companies excluding those in the banking, finance, insurance and oil sectors, which comprise over 50% of the National Stock Exchange (NSE).

The report further said 15 of the 21 key sectors will report a double-digit growth for Q1FY19 and the pick-up in volumes is expected to have sustained in both consumption- and commodity-linked sectors. On the profitability front, it said the pre-tax margins will crimp by 0.20%, but the slide will be narrower than the 1-2.50% contraction seen in the past quarters.

On the sectoral front, volume growth will lead to automobiles, retail and airline services to log a revenue growth in excess of 15%. Among the commodity sectors, natural gas and cement are expected to post robust growth led by volumes, while petrochemicals and steel products would benefit from continued higher prices. It added that revenue of export linked sectors like information technology and pharma will be aided by the 4% rupee depreciation.

According to the report, automobiles, steel products and pharmaceuticals are expected to log improvement in operating margins, but the margins for airline services, cement, natural gas, sugar and telecom services will be impacted by higher commodity prices. Besides, the telecom sector, which has had a bad time since the launch of deep-pocketed Reliance Jio, is expected to continue showing signs of pricing pressures.

The CNX Nifty ended at 10952.95, up by 100.05 points or 0.92% after trading in a range of 10876.65 and 10956.90. There were 33 stocks advancing against 17 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 4.88%, Hindalco up by 3.51%, Reliance Industries up by 3.02%, Eicher Motors up by 2.67% and Yes Bank up by 2.63%. (Provisional)

On the flip side, HPCL down by 1.81%, Indian Oil Corp. down by 1.56%, Indusind Bank down by 1.26%, Indiabulls Housing Finance down by 1.25% and Lupin down by 1.24% were the top losers. (Provisional)

European markets were trading in green; Germany’s DAX increased 12.85 points or 0.10% to 12,556.74, UK’s FTSE 100 was up by 20.62 points or 0.38% to 5,418.73 and France’s CAC added 13.48 points or 0.18% to 7,701.47.

Asian equity markets ended mostly higher on Tuesday as higher oil prices and optimism about the upcoming corporate earnings season helped investors brush aside trade and Brexit-related concerns. Japanese shares ended higher, with overnight gains on Wall Street and a weaker yen boosting sentiments. Further, Chinese shares ended higher after official data showed consumer prices in China grew an annual 1.9 percent in June, matching expectations and up from 1.8 percent in May. While, the producer prices index jumped an annual 4.7 percent versus expectations for 4.5 percent and up from 4.1 percent a month earlier.