Post Session: Quick Review

Last hour heavy buying helped the key Indian equity benchmarks to end Wednesday’s session at fresh record closing highs. The markets made a positive start but soon turned cautious in early morning deals, as the Ministry of Corporate Affairs issued ‘preliminary notices’ to 272 companies for alleged non-compliance with CSR provisions under the companies law. Some concerns also came with credit rating agency ICRA’s latest report that in spite of corporates witnessing a healthy 22% revenue growth in the June quarter, most have seen flat margins, with airline and cement companies seeing declining margins due to rising input costs and crude prices. Adding some worries, Care Ratings in its report said that there has been a marginal decline of 1% in employment growth at 6.6%, mainly due to a larger number of companies having witnessed lower or negative hiring growth. It added that the employment growth in 2016-17, was at 7.7%.

However, in the noon deals, the key indices gained traction to end the trading session at fresh closing high points, aided by International Monetary Fund’s (IMF) statement that India is a source of growth for the global economy for the next few decades and it could be what China was for the world economy. It further noted that the country now contributes, in purchasing power parity measures, 15% of the growth in the global economy, which is substantial. Some support also came with a report that government doubled import duty to 20% on 328 tariff lines of textile products, with an aim to boost domestic manufacturing and create employment opportunities. Meanwhile, the Lok Sabha approved the first batch of supplementary demands for grants envisaging a gross additional outgo of Rs 11,697.92 crore for the current fiscal.

On the global front, European markets were trading lower, on the back of disappointing microeconomic data. Germany’s exports remained flat amid trade wars and industrial production declined more-than-expected in June. Destatis reported that exports registered nil growth in June from May after rising 1.7%. Separately, France’s foreign trade gap widened in June, as imports grew faster than exports. The figures from the Customs Office showed that the trade deficit rose to EUR 6.25 billion in June from EUR 6.02 billion in the previous month.  Asian markets ended mixed, with investors largely staying on the sidelines and refraining from making significant moves due to lack of triggers.

Back home, banking stocks ended higher despite a report that Indian banks reported a total loss of about Rs 70,000 crore due to frauds during the last three fiscals up to March 2018. The extent of loss in fraud cases reported by scheduled commercial banks (SCBs) for 2015-16, 2016-17 and 2017-18 was Rs 16,409 crore, Rs 16,652 crore and Rs 36,694 crore, respectively. Further, consumer Discretionary Goods & Services and Auto stocks remained in focus after a private report stated that large consumer goods makers and auto companies have forecast growth of about 10% in the next six months in the approach to the upcoming general election in 2019 that will see substantially increased liquidity in the market. However, stocks related to power sector ended lower, even after the number of power plants facing coal shortages has reduced in the last four months as state-owned CIL and the railways worked jointly to augment the supplies.

The BSE Sensex ended at 37887.56, up by 221.76 points or 0.59% after trading in a range of 37641.40 and 37931.42. There were 22 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.16%, while Small cap index was up by 0.03%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 1.86%, Telecom up by 1.71%, Consumer Durables up by 1.25%, Bankex up by 0.78% and Oil & Gas was up by 0.72%, while Healthcare down by 0.33%, Power down by 0.28%, Auto down by 0.27%, Consumer Discretionary Goods & Services down by 0.22% and IT was down by 0.12% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 3.16%, ONGC up by 2.93%, SBI up by 2.02%, Tata Motors - DVR up by 1.60% and Hindustan Unilever up by 1.48%. On the flip side, Maruti Suzuki down by 2.02%, Vedanta down by 0.79%, Bajaj Auto down by 0.61%, NTPC down by 0.57% and Infosys down by 0.32% were the top losers. (Provisional)

Meanwhile, Minister of State for Finance Shiv Pratap Shukla has said Indian banks reported a total loss of about Rs 70,000 crore on account of the scams and frauds happened in recent three fiscal years. The extent of loss in fraud cases reported by scheduled commercial banks (SCBs) for FY16, FY17 and FY18 was Rs 16,409 crore, Rs 16,652 crore and Rs 36,694 crore, respectively.

However, the minister clarified that data of frauds is as per the year of reporting and not the year of occurrence of fraud or sanction of loan, letter of undertaking, which might be of an earlier period. Besides, he stated that gross advances by SCBs increased from Rs 25.03 lakh crore as on March 31, 2008, to Rs 68.75 lakh crore on March 31, 2014.

Admiring the stressed assets in the banking system, he stated that the spurt was on account of aggressive lending practices, wilful default, loan frauds, corruption in some cases and economic slowdown.  Additionally, he said as per RBI data, there were 139 borrowers with aggregate gross NPAs of more than Rs 1,000 crore.

The CNX Nifty ended at 11450.00, up by 60.55 points or 0.53% after trading in a range of 11379.30 and 11459.95. There were 36 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were ONGC up by 2.95%, Reliance Industries up by 2.83%, Bajaj Finance up by 2.40%, ICICI Bank up by 1.77% and Bharti Infratel up by 1.59%. On the flip side, Lupin down by 4.74%, Maruti Suzuki down by 2.17%, HPCL down by 2.04%, BPCL down by 1.73% and Bajaj Auto down by 0.97% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC decreased 7.32 points or 0.13% to 5,513.99 and Germany’s DAX was down by 16.93 points or 0.13% to 12,631.26, while UK’s FTSE 100 was up by 40.65 points or 0.52% to 7,759.13.

Asian equity markets ended mixed on Wednesday, with investors largely staying on the sidelines and refraining from making significant moves due to lack of triggers. The overnight positive close on Wall Street set up a higher opening for the markets, but lack of support at higher levels resulted in some of these settling down in negative territory. Chinese shares ended lower, weighed down by losses in technology and retail stocks. The mood was a bearish on reports the US would start collecting 25 percent tariffs on an additional $16 billion worth of Chinese goods this month. The world's largest economy is targeting tariffs on Chinese goods worth $50 billion. In economic news, China's exports growth exceeded expectations in July, despite the US tariffs on Chinese goods. Further, Japanese shares ended lower as the market braced for the start of US-Japan trade talks the next day, offsetting gains in companies which posted strong results such as Nikon and Daikin.