Post Session: Quick Review

Indian equity benchmarks traded on a weak note for most part of the day on Thursday and sharp sell-off in last hour of trade largely forced the markets to close near day’s low, with Nifty ending below 11,400 level. Markets started off with marginal losses, tracking feeble global cues and a weak Indian rupee. Traders remained cautious with report that India’s trade deficit soared to a near five-year high of $18 billion. The commerce ministry data showed that the country’s exports rose by 14.32% to $25.77 billion in July mainly on account of better performance of gems and jewellery sector as well as petroleum products, while imports during July were valued at $43.79 billion, a growth of 28.81% compared to $33.99 billion in the year ago period. Anxiety also persisted on India Ratings’ report that if the steep decline in the household savings rate -- which has fallen to 16.3% from 23.6% between fiscals 2012 and 2017 -- continues, it may pose a serious challenge to overall growth and the macroeconomic stability.

Key indices extended losses in the last leg of trade and traded near intraday low levels, as sentiments on the street weakened further with report that India’s crude oil import bill is likely to jump by about $26 billion in 2018-19 as rupee dropping to a record low has made buying of oil from overseas costlier. However, losses remained capped as sentiments were a little positive with FICCI’s latest Economic Outlook Survey stating that the Indian economy is expected to grow at 7.4% in the current fiscal, higher than the previous year.

On the global front, Asian markets ended in red, after deepening worries about global economic growth, particularly in China, set off a rout on Wall Street. European markets were trading in green in early deals on Thursday, following news that China has accepted an invitation from the United States to talk trade in late August.

Back home, Pharma stocks ended higher despite report stating that Indian drug makers are staring at diminishing margins as raw material imports from China has increased while drug prices have stagnated. The cost of raw materials sourced from China has risen after Chinese government started cracking down on facilities that violate the country’s pollution control norms. Besides, telecom stocks were in focus on report that the Telecom Commission, apex decision-making body at the telecom department, is likely to meet on August 31 to discuss Trai’s recommendation on spectrum allocation.

The BSE Sensex ended at 37692.22, down by 159.78 points or 0.42% after trading in a range of 37634.13 and 37891.92. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell by 0.49%, while Small cap index was down by 0.20%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 0.98%, IT up by 0.75%, TECK up by 0.52%, Utilities up by 0.34% and Auto up by 0.29%, while Metal down by 2.23%, Capital Goods down by 1.06%, Basic Materials down by 1.03%, Consumer Durables down by 0.93% and Energy down by 0.84% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 3.24%, Infosys up by 1.51%, Bharti Airtel up by 1.50%, Hero MotoCorp up by 0.97% and ICICI Bank up by 0.96%. (Provisional)

On the flip side, Kotak Mahindra Bank down by 3.53%, Vedanta down by 3.28%, HDFC down by 2.56%, Wipro down by 1.95% and Tata Steel down by 1.84% were the top losers. (Provisional)

Meanwhile, the industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest Economic Outlook Survey has forecasted that the India’s gross domestic product (GDP) growth is likely to expand at 7.4% in the current fiscal year (FY19), higher than the previous year. However, it said that rising oil prices are putting pressure on the current account, while global uncertainties around trade and financial markets carry serious risks for the rupee. Also, trade tensions between major economies are disturbing the global recovery.

The FICCI survey forecasts an annual median GDP growth at 7.4% for 2018-19, with a minimum and maximum range of 7.1% and 7.5%, respectively. It added that the projection is in line with the estimates put out by the Reserve Bank earlier this month. The expansion in the GDP was 6.7% (provisional) in 2017-18. On the growth in the first quarter of the current fiscal, it said the expansion in the economic activity would be 7.1%. On rupee front, it said the Indian currency will remain under strain. As per the report, the fair value of Indian Rupee vis-a-vis the US Dollar would be in the range of 65 to 66.

On the sectoral front, the industry body said the median growth forecast for agriculture and allied activities has been put at 3% for 2018-19. Although there has been some slippage in the monsoons during June and July, updated forecast for August and September indicate a pick-up in rainfall. Besides, industry and services sector are expected to grow by 6.9% and 8.3%, respectively in 2018-19. Talking about inflation, FICCI said the Consumer Price Index or retail inflation has been forecast at 4.8% for the year as whole. Further, the median growth forecast for IIP has been put at 6.5% for the year 2018-19.

The CNX Nifty ended at 11387.90, down by 47.20 points or 0.41% after trading in a range of 11366.25 and 11449.85. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 3.73%, Sun Pharma up by 3.27%, Dr. Reddys Lab up by 3.23%, Lupin up by 1.60% and Infosys up by 1.54%. (Provisional)

On the flip side, Kotak Mahindra Bank down by 3.68%, Vedanta down by 3.16%, HDFC down by 2.58%, Indiabulls Housing Finance down by 2.56% and Zee Entertainment down by 2.53% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 gained 41.14 points or 0.55% to 7,539.01, France’s CAC rose 22.46 points or 0.42% to 5,327.68 and Germany’s DAX was up by 34.31 points or 0.28% to 12,197.32.

All the Asian markets ended in red terrain on Thursday amid worries about Turkey’s financial crisis. However, markets pared most of their losses to end off their day's lows after China said it has accepted an invitation from the U.S. for a new round of trade talks to be held in late August. China's Ministry of Commerce said that a Chinese delegation led by vice commerce minister Wang Shouwen will travel to the U.S. in late August for trade talks to be held with the US under Secretary of Treasury for International Affairs David Malpass. Traders also took some relief with report that in another development, the United States ruled out removing steel tariffs that have contributed to a currency crisis in Turkey even if Ankara frees a U.S. pastor.

Meanwhile, Japanese benchmarks ended lower after a government report showed that Japan posted a merchandise trade deficit of 231.2 billion yen in July. That was shy of expectations for a shortfall of 41.2 billion yen following the downwardly revised 720.8 billion yen surplus in June. Exports were up 3.9 percent from a year earlier while imports surged an annual 14.6 percent. Chinese shares also ended in red for a fourth straight session on concerns about slowing growth.