Post Session: Quick Review

Snapping a two-session losing run, Indian equity benchmarks ended Tuesday’s trade on an optimistic note with gains of over half a percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher with key gauges recapturing their crucial 36,500 (Sensex) and 11,000 (Nifty) bastions. After making a cautious start, markets gained traction and traded in fine fettle on fresh buying by investors after a sharp drop on global crude oil prices and a strengthening rupee. Some support came with a report that Corporate India has announced deals worth $74.8 billion in the January-June period, registering a 90 percent jump over last year, largely driven by big ticket consolidations. Traders also took note of a report that the Indian government on July 16 invited Omani companies to invest in India and benefit from Make in India programme aimed to encourage manufacturing. 

Markets extended northward moment in the last leg of trade and traded near intraday high levels, on the back of encouraging earnings posted by some bluechip companies. Sentiments remained up-beat with report that India Inc said the spike in inflation, which rose to over 4-year high of 5.77 per cent in June, was temporary as it is caused by disruptions in supply chain, and inflation is expected to be benign on the back of a good monsoon in the near future. Some optimism also spread among the local traders with private report projecting the Indian economy to record 7.4% growth in 2018-19. Meanwhile, Niti Aayog CEO Amitabh Kant said that for India to grow at 9-10 per cent for three decades consistently and reap the dividend of demographic advantage, promoting entrepreneurship among women has to be the key strategy.

On the global front, Asian markets ended mostly in red, following a mixed day on Wall Street, as tensions over U.S. tariffs overshadowed data suggesting global growth is still on track. European markets were trading in green in early deals on Tuesday, amid optimism about growth after the International Monetary Fund kept its forecast for global economic growth unchanged at 3.9 percent this year despite proliferating trade conflicts.

Back home, Airline stocks such as Jet Airways and SpiceJet ended higher after a global aircraft leasing firm stating that the passenger aircraft fleet in India is set to nearly double to 1,100 planes by 2027, from around 600 at present. Besides, shares of state-run oil marketing companies such as HPCL, BPCL and IOC ended with decent gains, supported by a sharp fall in crude prices. 

The BSE Sensex ended at 36516.98, up by 193.21 points or 0.53% after trading in a range of 36261.78 and 36549.55. There were 22 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 2.07%, while Small cap index was up by 1.16%. (Provisional)

The top gaining sectoral indices on the BSE were PSU up by 2.37%, Oil & Gas up by 2.36%, Energy up by 1.99%, Metal up by 1.80% and Basic Materials up by 1.53%, while FMCG down by 0.71% and IT down by 0.08% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 2.92%, Axis Bank up by 2.84%, Sun Pharma up by 2.82%, Tata Steel up by 2.45% and ICICI Bank up by 2.39%. (Provisional)

On the flip side, Hindustan Unilever down by 4.00%, Bharti Airtel down by 1.13%, Indusind Bank down by 0.90%, ITC down by 0.55% and Infosys down by 0.53% were the top losers. (Provisional)

Meanwhile, citing high oil prices and faster-than-anticipated monetary policy tightening due to higher expected inflation, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) update has trimmed India’s Gross Domestic Product (GDP) projection by 0.1 percentage point to 7.3% for 2018 as against 7.4% forecasted earlier. Earlier, it also projected that the economy to grow 7.8% by 2019, but now the projection stood at 7.5%, lower by 0.3 percentage points.

However, IMF said that growth will rise from the 6.7% in 2017 as the drag in the currency exchange initiative and the introduction of the Goods and Services Tax (GST) fades. It noted that India is still the fastest growing economy, well ahead of 6.6% and 6.4% growth for China.

As per the report, among emerging market and developing economies, growth prospects are also becoming more uneven, amid rising oil prices, higher yields in the United States, escalating trade tensions, and market pressures on the currencies of some economies with weaker fundamentals. Besides, forecast for global growth remains unchanged at 3.9% with oil producers gaining at the expense of consumers.

The CNX Nifty ended at 11017.10, up by 80.25 points or 0.73% after trading in a range of 10925.60 and 11018.50. There were 39 stocks advancing against 11 stocks declining on the index. (Provisional)

The top gainers on Nifty were HPCL up by 7.15%, Indian Oil Corp. up by 4.89%, BPCL up by 3.07%, Hindalco up by 3.03% and Axis Bank up by 3.01%. (Provisional)

On the flip side, Hindustan Unilever down by 3.61%, Bharti Airtel down by 1.55%, Tech Mahindra down by 1.26%, Dr. Reddys Lab down by 1.14% and Indusind Bank down by 0.90% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 was up by 8.23 points or 0.07% to 12,569.25, France’s CAC added 2.21 points or 0.04% to 5,411.64 and Germany’s DAX increased 5.68 points or 0.07% to 7,606.13.

Asian equity markets ended mostly lower on Tuesday as oil prices extended declines for a second straight session, worries over the US-China trade war persisted and investors looked ahead to a Congressional testimony from Fed chair Jerome Powell for clues on rate outlook. Chinese and Hong Kong shares ended lower, dented by energy firms following a sharp decline in crude oil prices. However, Japanese shares hit a one-month high as a weak yen helped lift exporters, offsetting weakness in machinery stocks on concerns over slowing growth in China. China reported on Monday that its economic growth slowed in the second quarter and that factory output growth in June weakened to a two-year low, a worrying sign for investment and exporters as a trade war with the United States intensifies.