Post Session: Quick Review

It turned out to be a dismal day for the benchmark indices on Wednesday, as they failed to hold the gaining momentum and settled below the neutral line. Selling activity which took place during second half of the day dragged the markets lower, with Nifty failing to hold crucial 11,000 mark. Domestic bourses made a good start, tracking positive cues from the global markets. Traders also received encouragement with Confederation of Indian Industry’s (CII) president Rakesh Bharti Mittal’s statement that GDP growth at 7.5% plus was a very healthy and positive sign for Indian economy, noting that impact of sustained structural reforms is now being felt on the ground. Some support also came with a private report that inflation based on wholesale prices, which touched a 4-year high in June, seems to have peaked for this financial year, and is expected to glide down to around 4.1% by March 2019. 

However, sentiments got spooked in second half of the trade after Lok Sabha Speaker Sumitra Mahajan accepted the no-confidence motion moved against the BJP Government on the first day of the Monsoon Session that began in Parliament on Wednesday. The market breadth remained pessimistic with report that India’s import bill of crude oil and petroleum products swelled 57% to $12.73 billion in June as compared to the same month last year. Market participants also remained worried on a private study report pointing out discrepancies in FDI data and also suggested that the RBI should regenerate foreign fund inflows and outflows data with detailed information at least for the past five years with a view to providing a more realistic picture of overseas investments. Moreover, depreciation in Indian rupee too weighed on investors’ morale.

On the global front, Asian markets ended mostly in green, tracking a Wall Street rally after the head of the Federal Reserve expressed confidence in the US economy despite fears of a global trade war. European markets were trading in green in early deals on Wednesday, carrying on the positive sentiments seen overnight on Wall Street.

Back home, stocks related to PSU banking space ended higher with report that the finance ministry is likely to infuse about Rs 10,000 crore within a few days in some state-owned lenders including PNB, Corporation Bank and Central Bank of India, to help them meet regulatory capital requirement. Textile sector stocks surged with report that the government doubling import duty on over 50 textile products -- like jackets, suits and carpets -- to 20%, a move that is aimed at promoting domestic manufacturing.

The BSE Sensex ended at 36398.88, down by 121.08 points or 0.33% after trading in a range of 36320.92 and 36747.87. There were 10 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell by 1.24%, while Small cap index was down by 0.95%. (Provisional)

The few gaining sectoral indices on the BSE were Oil & Gas up by 1.07% and Energy up by 0.32%, while Metal down by 3.08%, Realty down by 2.58%, Basic Materials down by 1.90%, Telecom down by 1.87% and Auto down by 1.33% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 2.85%, Yes Bank up by 1.12%, HDFC up by 1.05%, Asian Paints up by 0.95% and Hero MotoCorp up by 0.76%. (Provisional)

On the flip side, Tata Steel down by 5.04%, Tata Motors - DVR down by 3.80%, Vedanta down by 3.05%, Tata Motors down by 2.25% and Hindustan Unilever down by 2.20% were the top losers. (Provisional)

Meanwhile, expressing confidence over India’s economic growth, the Confederation of Indian Industry (CII) president Rakesh Bharti Mittal has said that Gross Domestic Product (GDP) growth at 7.5% plus in the last quarter was a very healthy and positive sign for Indian economy. He said the impact of sustained structural reforms is now being felt on the ground as a mammoth economy is turning around. He added that the trends and signals of the economy are on the recovery path. He also said that the CII is looking at 8% growth for next year.

Mittal said ‘If you look at IMF, World Bank and other multi-lateral agencies including CII’s own projection, we are looking at GDP growth of 7.3-7.7% in 2018-19. So, $2.6 trillion economy growing at that rate.. If we are going to grow at a healthy rate of 8-9% year-on-year in future years, then by 2030, we are looking at India becoming a 10 trillion economy’. He also said sectors like consumer non-durables, two-wheelers and tractors are witnessing strong rural consumption. He added that structural reforms are settling down including Goods and Services Tax (GST) regime.

CII president further said ‘We have suggested to the Finance Ministry to start now looking at rationalising the tariff lines as well as rationalise the rates, which are in five brackets. I personally feel and believe that in India we cannot have single GST rate, but probably 2-3 rates should be good enough’. He also said another recommendation which the industry body has made to the Centre is to bring four sectors which are left out--petroleum, power, alcohol and real estate-- under the GST regime.

The CNX Nifty ended at 10983.45, down by 24.60 points or 0.22% after trading in a range of 10956.30 and 11076.20. There were 21 stocks advancing against 28 stocks declining on the index, while 1 stock remained unchanged. (Provisional)

The top gainers on Nifty were Indiabulls Housing Finance up by 4.03%, ONGC up by 2.66%, BPCL up by 2.25%, HPCL up by 1.71% and Indian Oil up by 1.61%. (Provisional)

On the flip side, Tata Steel down by 5.29%, Hindalco down by 3.01%, Vedanta down by 2.95%, UPL down by 2.54% and Tata Motors down by 2.48% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 was up by 50.03 points or 0.65% to 7,676.36, France’s CAC added 32.67 points or 0.60% to 5,455.21 and Germany’s DAX increased 109.91 points or 0.86% to 12,771.45.

Asian equity markets ended mixed on Wednesday even as Federal Reserve Chair Jerome Powell's upbeat economic view bolstered investors' confidence in the world's largest economy. In testimony before the Senate Banking Committee, Powell on Tuesday offered a positive outlook of the US economy and reiterated that gradually raising interest rates is ‘the best way forward’. He also downplayed potential negative fallout from the ongoing US-China trade spat. Japanese shares closed higher at their highest level in more than a month as exporters such as automakers and technology firms got a boost after the dollar hit a six-month high against the yen. Further, Chinese shares ended lower as a weaker yuan pulled down prices of real estate developers and airliners.