Post Session: Quick Review

Extending previous session’s southward journey, Indian equity benchmarks ended first day of the week on a lower note with losses of over half a percent. Markets traded in red since the beginning, mirroring weak global cues, as investors’ sentiments took a hit amid the renewed slump in the Turkish lira. Trading sentiments remained subdued with Fitch Ratings' latest report that its outlook on the Indian banking sector is likely to remain negative until the banks address their weak core capital positions against mounting bad loans and poor financial performance. There was also caution among investors ahead of the macro data of retail inflation for July scheduled to be announced post market hours. Traders also took note of GSTN CEO’s statement that the IT backbone of the Goods and Services Tax (GST) was not given enough time to prepare a system to the satisfaction of the GSTN which led to the glitches in the implementation of the new tax regime.  Moreover, steep fall in the Indian rupee against the US dollar too weighed on investors’ morale. However, markets erased some of the initial losses as traders found some support with report that India’s industrial output recorded a five-month high growth of 7% in June as against 3.9% in May, as production of consumer durables and capital goods picked up pace ahead of festival season. 

On the global front, Asian markets ended in red, while European markets were trading in red in early deals on Monday, on fears that the economic crisis gripping Turkey could spill over into the global economy. Back home, majority of Power stocks ended lower with Crisil’s latest report that India will not be able to achieve its ambitious target of generating 100GW solar power by 2022. Besides, pharma stocks ended higher, supported by Pharmexcil’s (a body under Union Commerce Ministry) report that pharmaceutical exports from the country are expected to cross $19 billion in worth during the current fiscal despite muted growth in the North American markets.

The BSE Sensex ended at 37657.23, down by 212.00 points or 0.56% after trading in a range of 37559.26 and 37799.54. There were 10 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.69%, while Small cap index was down by 0.77%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.27%, TECK up by 0.79%, Healthcare up by 0.50%, FMCG up by 0.25% and Consumer Durables up by 0.01%, while Oil & Gas down by 2.09%, PSU down by 1.90%, Energy down by 1.74%, Basic Materials down by 1.16% and Bankex down by 1.10% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 1.72%, Sun Pharma up by 1.66%, Wipro up by 1.65%, Mahindra & Mahindra up by 0.88% and Indusind Bank up by 0.70%. (Provisional)

On the flip side, Yes Bank down by 3.62%, Vedanta down by 3.60%, SBI down by 2.78%, Tata Motors - DVR down by 2.61% and ONGC down by 2.04% were the top losers. (Provisional)

Meanwhile, a joint survey carried out by the industry body, the Confederation of Indian Industry (CII) and ASCON has stated that India’s economic growth will improve further in the coming quarters on account of recovery in domestic demand as also the investment cycle. It highlighted that the demand and investment will be supported by better consumption patterns due to favourable monsoon, moderation in inflation and the onset of festive season.

Besides, it showed that the current expectations on the investment outlook for the next two months also points towards an impending recovery in investment cycle supported by improving capacity utilization levels amidst domestic demand recovery. Further, a continuous push to structural reforms such as GST, PSU bank recapitalization and time-bound insolvency resolution would also support the recovery. The survey tracked the performance of 70 sectors during the first quarter of the current fiscal (FY19), as against the year-ago period.

The survey witnessed fewer sectors anticipating negative growth trends, which clearly points towards improvement in the economic environment. It showed a sharp increase in the sectors witnessing ‘Excellent’ growth (>20%) in April-June 2018-19, over the year-ago period. The share of sectors witnessing ‘Excellent’ growth has improved to 14.3% (10 out of 70 sectors) in Q1 FY19 from 5.7% (4 out of 70) in Q1 FY18. At the same time, the share of sectors recording ‘High’ growth and ‘Moderate’ growth has improved marginally while the share of sectors witnessing ‘Low’ growth (<0%) has come down substantially.

The share of sectors registering ‘High’ growth inched up to 21.4% in the first quarter (15 out of 70) from 20% (14 out of 70) in Q1 FY18 whereas sectors witnessing ‘Moderate’ (0-10%) growth improved slightly to 44.3% (31 out of 70) from 42.9% (30 out of 70) in same period a year ago. The share of sectors witnessing ‘Low’ growth has come down substantially to 20% (14 out of 70) as compared to 31.4% (22 out of 70) recorded in the same period previous year. 

On the production front, some sectors which have registered excellent growth include Commercial Vehicles, Three Wheelers, Construction Equipment Machinery, Soya Oil, Tractors and Sugar. On exports front, 3 wheelers, tractors, commercial vehicles, two wheelers, sugar, rapeseed meal reported excellent growth. Consequently, the survey observed that while the growth trends remain concentrated in the ‘Moderate’ category, a deceleration in the pace of de-growth suggests firming of the recovery in the economy.

The CNX Nifty ended at 11359.55, down by 69.95 points or 0.61% after trading in a range of 11340.30 and 11406.30. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 3.33%, Tech Mahindra up by 2.54%, Sun Pharma up by 1.80%, HCL Tech up by 1.73% and Grasim Industries up by 1.71%. (Provisional)

On the flip side, BPCL down by 5.95%, HPCL down by 4.88%, Indiabulls Housing Finance down by 3.89%, Indian Oil down by 3.58% and Yes Bank down by 3.55% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 shed by 39.21 points or 0.51% to 7,627.80 and France’s CAC dipped 20.87 points or 0.39% to 5,393.81 and Germany’s DAX was down by 73.69 points or 0.60% to 12,350.66.

Asian equity markets ended in red on Monday as turmoil in Turkey and the lira's free-fall triggered fears of contagion. Tensions between the US and Turkey have been on the rise due to Turkish detention of US pastor Andrew Brunson and Trump's move to double metals tariffs on Turkey. Japanese shares ended lower, tracking weak cues from the US and Europe and a firmer yen on concerns that the financial crisis in Turkey will have a spillover effect on the world economy. Further, Chinese shares ended down, but managed to recoup most of their earlier losses aided by gains in shares of technology firms.