Markets pare losses to enter into green; Energy stocks gain

Erasing all of their losses, Indian equity benchmarks entered into green terrain in late afternoon session, on the back of buying in Energy and Realty. Gains led by major industry leaders like Reliance Industries and Hero MotoCorp also helped the key indices to recover losses in late noon deals. Optimism spread on the street after the government sought Parliament's approval for additional gross additional expenditure of Rs 11,697.92 crore for the current fiscal. Traders took note of a private report stating that GDP growth is likely to peak in April-June quarter and then moderate to 7.2% in the second half of 2018 from around 7.8% in first half. However, gains were limited, amid mixed cues from European markets along with heavy sell off at PSU and banking counters. Some concerns also came with the RBI’s latest report revealing that Indian companies borrowed $2.71 billion from overseas markets in the month of June 2018 through external commercial borrowing (ECB) and rupee-denominated bonds (RDBs), 66.3% more than last year. On the sectoral front, logistics stocks were trading lower, despite Commerce and Industry Minister Suresh Prabhu’s statement that expenditure on investment in logistics, including infrastructure, will touch $500 billion annually by 2025.

On the global front, European markets were trading mixed, as traders awaited the upcoming interest rate decision from the Bank of England. The Bank of England is widely expected to increase rates by a quarter point when it concludes its policy meeting on Thursday. On the economic front, consumer confidence in the United Kingdom weakened further in July. The latest survey from GfK revealed with an index score of -10. Asian markets were trading in green, after the Bank of Japan kept its monetary policy steady, as widely expected and announced policy tweaks to make its policy framework more flexible for the long-term yield target. Back home, in scrip specific development, HG Infra Engineering jumped higher on reporting a rise of 43.06% in its net profit at Rs 27.71 crore for the Q1FY19 as compared to Rs 19.37 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 37516.90, up by 22.50 points or 0.06% after trading in a range of 37298.75 and 37534.95. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.17%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Energy up by 1.49%, Realty up by 1.37%, Healthcare up by 0.65%, FMCG up by 0.64% and Capital Goods up by 0.63%, while PSU down by 0.63%, Bankex down by 0.47% and Utilities down by 0.04% were the few losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.66%, Hero MotoCorp up by 2.18%, Bharti Airtel up by 2.11%, Hindustan Unilever up by 2.00% and Adani Ports & SEZ up by 1.86%. On the flip side, Axis Bank down by 2.38%, HDFC down by 2.32%, Tata Motors - DVR down by 2.04%, Tata Motors down by 1.27% and SBI down by 1.21% were the top losers.

Meanwhile, Indian companies borrowed $2.71 billion from overseas markets in the month of June 2018 through external commercial borrowing (ECB) and rupee-denominated bonds (RDBs), 66.3% more than last year. The borrowings were $1.63 billion in June last year.

According to the Reserve Bank of India (RBI) data report, of the total borrowings, ECB stood at $2,664,647,810 ($2.66 billion), while RDBs stood at $49,415,083 ($49.42 million). The report further found-out that as many as 77 firms went through the ECB route to raise $2.66 billion. Some companies which took the ECB route were HDFC ($750 million), Mangalore Refinery and Petrochemicals ($350 million), Shriram Transport Finance ($500 million) and Indiabulls Housing Finance ($240 million).

Further, RBI report noted that in June 2018, only two entities issued rupee-denominated bonds such as India Infoline Finance and Global Metal Forging. India Infoline Finance raised $47.94 million, while Global Metal Forging raised $1.47 million via RDBs.

The CNX Nifty is currently trading at 11331.40, up by 11.85 points or 0.10% after trading in a range of 11267.75 and 11332.75. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.85%, Reliance Industries up by 2.63%, Dr. Reddy’s Lab up by 2.35%, Adani Ports & SEZ up by 2.28% and Bharti Airtel up by 2.27%. On the flip side, Indiabulls Housing Finance down by 2.97%, Axis Bank down by 2.82%, Eicher Motors down by 2.78%, HDFC down by 2.19% and BPCL down by 1.92% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted increased 23.97 points or 0.22% to 11,057.51, KOSPI was up by 1.75 points or 0.08% to 2,295.26, Nikkei 225 gained 8.88 points or 0.04% to 22,553.72, Straits Times surged 10.42 points or 0.31% to 3,317.57 and Shanghai Composite rose 7.35 points or 0.26% to 2,876.40. On the flip side, Hang Seng lost 150.12 points or 0.53% to 28,583.01 and Jakarta Composite fell 112.04 points or 1.89% to 5,915.90.

European markets were trading mixed; UK’s FTSE 100 increased 6.74 points or 0.09% to 7,707.59 and Germany’s DAX was up by 1.91 points or 0.01% to 12,800.11. On the flip side, France’s CAC decreased 3.30 points or 0.06% to 5,487.92.