Post Session: Quick Review

Indian equity benchmarks ended Friday’s trade on an optimistic note, on hopes of Narendra Modi Government winning the no-trust vote brought in by TDP and other Opposition parties. Domestic bourses recovered after falling for two straight sessions and settled above the psychological 11,000 (Nifty) and 36,400 (Sensex) levels. After making a cautious start, markets gained traction and traded in fine fettle, taking support from industry body Ficci’s statement that despite short-term challenges, India’s economic growth story remains intact and the country’s GDP is expected to grow around 7.5% in the current financial year. Sentiments remained sanguine with Asian Development Bank’s (ADB) new report stating that South Asia continues to be the fastest growing sub-region, led by India, whose economy is on track to meet fiscal year 2018 projected growth of 7.3% and further accelerating to 7.6% in 2019, as measures taken to strengthen the banking system and tax reform boost investment.

Further, investors’ morale also remained upbeat with S&P in its report ‘APAC Economic Snapshots -- July 2018’ stating that economic data from India continues to be positive overall and the purchasing manager indices are above 50 and trending upward, suggesting a broad-based and strengthening upturn. Adding the confidence among investors, India's top envoy to the UN Syed Akbaruddin said that India is pushing ahead on its national efforts to meet Sustainable Devolvement Goals by undertaking one of the highest rates of renewable energy expansion and building 11 million homes under the world's largest affordable housing programme. However, further up-ward move got restricted as some anxiety remained among the traders with ICRA’s report that India’s current account deficit (CAD) is set to widen and the first quarter print may come in at $16-17 billion or 2.5% of Gross Domestic Product (GDP) and added that for the full year the gap may scale a six-year high of $67-72 billion. Investors also remained on sidelines ahead the Goods and Services Tax (GST) Council meeting to be held on July 21, where it will consider to cut tax rate on 30-40 items across multiple slabs.

On the global front, Asian markets ended mostly in green, despite signs that China and the U.S. were preparing to impose more tariffs on each other's products. European markets were trading in green in early deals on Friday, as the European Union is preparing a new list of American goods to hit with protective measures if US President Donald Trump imposes ‘disastrous’ tariffs on automobiles ahead of next week's talks in Washington.

Back home, power sector stocks ended lower with report stating that peak power deficit during April-June, 2018-19 was 0.70%, while overall electricity deficit stood at 0.60% during the quarter. 170.76GW electricity was supplied during peak hours against the demand of 171.97 GW during the quarter. Textile sector was in limelight after the central government hinted at taking proactive decisions in favour of the man-made fabric (MMF) sector in order to resolve the issues and problems under the goods and service tax (GST) latest by July 21.

The BSE Sensex ended at 36472.30, up by 121.07 points or 0.33% after trading in a range of 36335.61 and 36567.34. There were 20 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.76%, while Small cap index up by 0.42%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.47%, TECK up by 1.35%, Telecom up by 1.17%, Healthcare up by 1.14% and Capital Goods up by 0.86%, while Oil & Gas down by 0.64%, Metal down by 0.45%, Auto down by 0.39%, PSU down by 0.21% and Basic Materials down by 0.14% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 2.97%, Infosys up by 2.39%, Reliance Industries up by 2.09%, ICICI Bank up by 1.99% and Axis Bank up by 1.44%. (Provisional)

On the flip side, Bajaj Auto down by 9.02%, Vedanta down by 2.64%, Hero MotoCorp down by 2.28%, ONGC down by 2.01% and Kotak Mahindra Bank down by 1.37% were the top losers. (Provisional)

Meanwhile, expressing confidence over growth of Indian economy, the industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) has said that the country’s economic growth story remains intact with the Gross Domestic Product (GDP) expected to grow around 7.5% in the current financial year, despite short-term challenges. It also said that growth will improve further in the coming years.

FICCI said the short-term challenges are slowing down of the industrial output in May to 3.2% and the inching up of the retail inflation in June to 5%. It further said that these challenges are being pro-actively tackled by the government and the Reserve Bank of India (RBI) observing that these indicators should not be seen as hurting the signs of revival in the economy significantly. It added that the industrial output growth is expected to rebound in the next few months.

The industry body also said that the Goods and Services Tax (GST) will play the role of a catalyst in this. While the GST collection trends clearly indicate towards a positive sentiment in the economy, the national integrated indirect tax structure will also bring down inflation, going ahead. It said with the GST Council and the central government open to taking measures for rationalising the GST rate structure, bringing in the excluded items and simplifying the tax administration, GST is all set to boost the GDP growth further.

Along with this, FICCI said the reform measures like Insolvency and Bankruptcy Code (IBC) and Real Estate (Regulation and Development) Act, 2016, which have already started yielding good results, will help in strengthening the revival of animal spirits and take the GDP growth beyond 8%.

The CNX Nifty ended at 11008.45, up by 51.35 points or 0.47% after trading in a range of 10946.20 and 11030.25. There were 30 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Finance up by 8.17%, Bajaj Finserv up by 6.15%, Sun Pharma up by 2.97%, Cipla up by 2.91% and Tech Mahindra up by 2.60%. (Provisional)

On the flip side, Bajaj Auto down by 9.23%, HPCL down by 3.41%, Indian Oil Corp. down by 2.96%, Vedanta down by 2.74% and BPCL down by 2.40% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 surged by 18.21 points or 0.24% to 7,702.18, France’s CAC rose 4.28 points or 0.08% to 5,421.35 and Germany’s DAX was up by 12.04 points or 0.09% to 12,698.33.

Asian equity markets ended mostly higher on Friday despite concerns that an escalation of trade tensions could harm global growth. Chinese shares finished sharply higher, after China's central bank lowered its yuan midpoint for the seventh straight trading day. Investors believe the yuan's slide will cushion the impact on exporters from the planned next round of US tariffs. However, Japanese shares ended a choppy session lower after China allowed its yuan currency to slide further to its lowest level in a year, stoking concerns that China could turn a trade war into a currency war. In economic news, Japan's consumer price inflation rose 0.7 percent year-on-year in June, the Ministry of Internal Affairs and Communications said. That was unchanged from the May reading, although it was shy of expectations for 0.8 percent.