Post Session: Quick Review

Snapping two-day record breaking spree, Indian equity benchmarks ended Friday’s trade on a pessimistic note with losses of around half a percent. Sharp selling activity which took place during final hours of trade dragged the markets lower, with Sensex and Nifty slipping below their crucial 38,000 and 11,450 levels, respectively. Markets started the day on negative note and traded marginally in red, following feeble global cues. Traders remained on sidelines ahead of industrial production data for June scheduled to be announced post market hours. Some cautiousness also came with data released by the India Meteorological Department (IMD) showing that 39 percent of the 681 districts in India have received less than normal rainfall in the week ended August 8.  Selling further crept in despite a private report stating that the production and manufacturing sector saw a 60% rise year-on-year (Y-o-Y) in recruitment in July. The market participants even overlooked Finance Minister Piyush Goyal’s statement that he has once again issued hints towards a reduction in prices of more items under GST framework. The revenue collection will increase, GST on more items can be slashed.

On the global front, Asian markets ended mostly in red, as investors fretted about rising trade tensions between the U.S. and China as well as the new set of U.S. sanctions on Russia. European markets were trading in red in early deals on Friday, as investors reacted to corporate earnings, fresh turmoil for Turkey and continued fears of a trade war between the U.S. and China.

Back home, pharma stocks ended lower despite report that India’s pharmaceutical exports grew merely 3 percent to $17.3 billion in 2017-18 due to increasing regulatory concerns and pricing pressures in the global markets, including the US. Besides, real estate sector was in focus as the joint report by Confederation of Indian Industry (CII) and property consultant JLL has indicated that the real estate sector in India attracted an investment of around Rs 24,011 crore during the first half of 2018 (H1 2018), boosted by a rise in consumer confidence on account of the implementation of the Real Estate.

The BSE Sensex ended at 37845.82, down by 178.55 points or 0.47% after trading in a range of 37827.18 and 38051.45. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.84%, while Small cap index was down by 0.84%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.82%, IT up by 0.32%, TECK up by 0.17%, Consumer Disc up by 0.05% and Auto up by 0.05%, while Metal down by 2.22%, Basic Materials down by 1.68%, PSU down by 1.51%, Utilities down by 1.46% and Telecom down by 1.12% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 1.25%, TCS up by 0.88%, ITC up by 0.86%, Hero MotoCorp up by 0.76% and Kotak Mahindra Bank up by 0.73%. (Provisional)

On the flip side, SBI down by 4.28%, Vedanta down by 3.15%, Sun Pharma down by 2.93%, Tata Motors down by 2.85% and Tata Motors - DVR down by 2.27% were the top losers. (Provisional)

Meanwhile, expressing optimism over the new indirect tax regime, interim Finance Minister Piyush Goyal has said that lower Good and Services Tax (GST) rates will improve compliance and enhance revenue collection. Allaying concerns over tax collection, he said that tax collection will not come down despite reduction in taxes. Goyal said GST, which came into force from July 01, 2017, on about 400 goods and 68 services were reduced in the last one year. He added that they are empowering 125 crore people of India through Good and Simple Tax.

On the problems faced by the textile sector, the minister said the GST Council has resolved most of the problems of the sector. With the introduction of GST, textile has become cheaper. While moving the bill for consideration, he said the capacity to slash the GST rates on more items would go up as GST revenues and the compliance rate increases and the economy formalises. He also pointed out that the government was able to collect GST in line with the country’s fiscal deficit target.

Besides, The Lok Sabha has passed four bills to amend the GST law. The move aims at plugging loopholes in existing laws and reducing the compliance burden for taxpayers. The four bills are the Central GST (Amendment) Bill, Integrated GST (Amendment) Bill, GST (Compensation to States) Amendment Bill and Union Territory GST (Amendment) Bill.

The CNX Nifty ended at 11420.65, down by 50.05 points or 0.44% after trading in a range of 11419.65 and 11478.75. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were Eicher Motors up by 5.25%, BPCL up by 3.10%, HPCL up by 1.69%, Mahindra & Mahindra up by 1.18% and HCL Tech up by 0.98%. (Provisional)

On the flip side, SBI down by 4.60%, Vedanta down by 3.56%, Tata Motors down by 3.04%, GAIL India down by 3.00% and Sun Pharma down by 2.88% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 shed by 59.21 points or 0.77% to 7,682.56 and France’s CAC dipped 71.36 points or 1.31% to 5,430.89 and Germany’s DAX was down by 215.31 points or 1.73% to 12,460.80.

Asian equity markets ended mostly in red on Friday as investors fretted about rising trade tensions between the US and China as well as the new set of US sanctions on Russia. A diplomatic rift between the US and Turkey also kept underlying sentiments cautious. Japanese shares fell sharply to hit one-month low, with a firmer yen and heavy selling in the technology sector weighing on markets. The yen rose against the dollar as trade worries persisted and data showed the country's economy grew more than expected in the second quarter, driven by higher consumer spending and business investment. Though, Japan's GDP expanded a seasonally adjusted 0.5 percent sequentially in the second quarter of 2018, the Cabinet Office said in a preliminary reading. That exceeded expectations for an increase of 0.3 percent following the 0.2 percent loss in the three months prior. However, Chinese ended higher with technology companies leading after China revamped a national leadership group charged with planning and studying its key technological development strategies.