Sensex, Nifty off day’s high

Indian equity benchmarks came off day’s high points in late afternoon session, tracking weak trade in European markets. Some gains got trimmed during noon deals, on the back of selling at Realty, FMCG and IT counters. The street also got cautious, as the government said it will take action against over 2.25 lakh companies as they have not filed requisite financial statement for 2015-16 and 2016-17. Separately, Finance Ministry has said that foreigners coming to India may not get the Goods and Services Tax (GST) refunds on goods purchased and carried back by them as the government has not invoked relevant provisions of the Integrated Goods and Services Tax Act yet. Anxiety also spread with credit rating agency, Care Ratings’ latest report that the monsoon deficit is likely to lead to lower production. The report further noted that the country is still facing a rainfall deficit of 7%, on a cumulative basis and the overall sown area is 7.5% less than last year. Besides, losses led by major industry leaders like Kotak Mahindra Bank and Hindustan Unilever, also weighed on the domestic sentiments.

However, the key indices were managing to keep their heads in green, aided by Principal Economic advisor to the Finance Ministry Sanjeev Sanyal’s statement that the GST slabs may be brought down to three in the long-term, along with the exemption category, in order to further simplify the India’s tax regime. Some support also came with the Reserve Bank of India (RBI) in its latest data showing that bank credit jumped 12.44% to Rs 86,13,164 crore in the fortnight to July 20 as compared to Rs 76,59,898 crore same period last year. 

On the global front, European markets were trading in green, as Euro area private sector growth eased in July, ceding most of the momentum gained in the prior survey month. The data from IHS Markit showed that the composite output index fell to 54.3 in July, in line with flash estimate, from 54.9 in June. However, Asian markets were trading in green, although the upside remained limited on renewed trade worries as China proposed retaliatory tariffs on $60 billion worth of goods across a range of sectors. Back home, in scrip specific development, Bharti Airtel ringed loud after the company entered into strategic partnership with Telecom Egypt, Egypt’s first integrated telecom operator, wherein, Airtel will get IRUs (Indefeasible Right of Use) on Middle East North Africa Submarine Cable (MENA Cable) and TE North Cable Systems.

The BSE Sensex is currently trading at 37650.11, up by 93.95 points or 0.25% after trading in a range of 37643.29 and 37805.25. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Bankex up by 1.12%, Energy up by 1.04%, Telecom up by 0.96%, PSU up by 0.85% and Metal up by 0.66%, while Realty down by 0.54%, FMCG down by 0.42%, IT down by 0.29%, Healthcare down by 0.26% and TECK down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 4.10%, ICICI Bank up by 3.30%, SBI up by 3.11%, Bharti Airtel up by 2.36% and Mahindra & Mahindra up by 1.58%. On the flip side, Kotak Mahindra Bank down by 1.81%, Hindustan Unilever down by 1.69%, Sun Pharma down by 1.56%, Indusind Bank down by 0.95% and ITC down by 0.92% were the top losers.

Meanwhile, raising concerns over Indian monsoon rainfall trends, credit rating agency, Care Ratings in its latest report has said that the monsoon deficit is likely to lead to lower production. The report further noted that the country is still facing a rainfall deficit of 7%, on a cumulative basis and the overall sown area is 7.5% less than last year.

As per the study report, Rayalseema in Andhra Pradesh received the lowest rainfall, which was 43% below normal and north eastern regions continue to be affected by deficient rainfall, as the monsoon winds progress towards the north central belt. Besides, the rating agency pointed that this situation has result into lower cultivated area across almost all crop except sugarcane.

The report also showed that acreage for pulses is around 9% less than last year, while acreage for urad has reduced by 16%, on the back of deficient rainfall in Andhra Pradesh (Rayalseema). Moreover, sowing for oilseeds this year is lower by 1.2%, compared with last year. Care Ratings however underlined that farmers might have chosen to grow fewer pulses due to fall in prices in the last couple of years.

The CNX Nifty is currently trading at 11380.25, up by 19.45 points or 0.17% after trading in a range of 11370.60 and 11427.65. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 3.96%, ICICI Bank up by 3.05%, SBI up by 2.89%, UPL up by 2.40% and Bharti Airtel up by 2.27%. On the flip side, GAIL India down by 2.36%, Kotak Mahindra Bank down by 1.87%, Hindustan Unilever down by 1.82%, Sun Pharma down by 1.61% and Dr. Reddy’s Lab down by 1.36% were the top losers.

Asian markets were trading in mostly in green; Taiwan Weighted increased 11.67 points or 0.11% to 11,024.10, Straits Times gained 23.46 points or 0.71% to 3,289.19, Jakarta Composite zoomed 92.00 points or 1.51% to 6,099.54 and Hang Seng was up 143.24 points or 0.51% to 27,819.56. On the flip side, KOSPI decreased 1.18 points or 0.05% to 2,286.50, Nikkei 225 fell 17.86 points or 0.08% to 22,507.32 and Shanghai Composite was down by 34.60 points or 1.28% to 2,705.84.

All European markets were trading in red; UK’s FTSE 100 decreased 1.51 points or 0.02% to 7,657.59, France’s CAC fell 1.09 points or 0.02% to 5,477.89 and Germany’s DAX was down by 53.68 points or 0.43% to 12,562.08.