Benchmarks eke out slender gain; end at new all-time closing highs

Indian equity benchmarks ended the choppy day of trade with marginal gains on Tuesday, as traders took comfort with a private report stating that India has been remarkably resilient in the recent turmoil in emerging market equities largely driven by macro stability, low policy uncertainty, improving growth and domestic flows. Markets after a positive start turned flat and traded choppy in green and red terrain throughout the day. Overall sentiments remained optimistic with Retirement fund body the Employees’ Provident Fund Organisation (EPFO) payroll data suggesting that as many as 47.13 lakh jobs were created during September 2017 to June this year. Trader took some encouragement from a private report that a spectacular 53% increase in the number of income-tax returns filed electronically till July 31 has given the government renewed hope of continued high-paced growth in compliance and taxpayer base, even 21 months after demonetisation. Market participants also got some solace with Commerce and industry minister Suresh Prabhu reviewing two proposed policies- on agriculture export and new industrial policy to take the country’s exports to a new level.

Meanwhile, the Securities and Exchange Board of India (SEBI) is considering doubling or even quadrupling the minimum ticket size for investment in portfolio management services (PMS) schemes. However, gains remain capped with NITI Aayog’s statement that India needs to focus more on meeting its revenue deficit target than adhering to the fiscal deficit aim. NITI Aayog added that India needs to shift its obsession with the fiscal gap number and this obsession must end. Traders also took note with the International Labour Organisation (ILO) in its latest report title ‘India Wage Report: Wage policies for decent work and inclusive growth’ stating that the country needs to improve its wage policies. Though, it also said that low pay, gender wage gap and informality remain a serious challenge to India’s path to achieving decent working conditions and inclusive growth.

On the global front, European markets were trading mostly in green in early deals, as caution settled in before trade talks between the United States and China later in the week, though a weaker dollar boosted shares in international earners and commodities sectors. Asian counters ended in green, supported by hopes Beijing and Washington would dial back trade hostilities.

Back home, steel sector stocks ended mixed with report that India’s steel ministry has strongly opposed the inclusion of finished steel products in the proposed regional free-trade agreement, saying it would have an adverse impact on the industry that’s recovering from a crisis. Aviation sector stocks ended in red despite report that giving in to demand from the airlines, the GST Council may propose to bring Aviation Turbine Fuel (ATF) under the indirect tax regime in its next meeting. Stocks related to shipping sector remained in focus with a private report that twenty two private shipyards of India asking the government to infuse Rs 50 billion in working capital in order to keep the industry afloat. The domestic shipyard industry has around Rs 250 billion of stressed loans. Two big players Bharati Shipyard and ABG Shipyard are on the insolvency route.

Finally, the BSE Sensex gained 7.00 points or 0.02% to 38,285.75, while the CNX Nifty was up by 19.15 points or 0.17% to 11,570.90.

The BSE Sensex touched a high and a low of 38,402.96 and 38,213.87, respectively and there were 12 stocks advancing against 19 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.52%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Power up by 1.55%, Healthcare up by 1.12%, Utilities up by 0.95%, Energy up by 0.72% and IT was up by 0.45%, while Realty down by 1.45%, Metal down by 0.41%, Consumer Durables down by 0.35%, Telecom down by 0.32% and Consumer Discretionary Goods & Services down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 2.59%, Axis Bank up by 1.92%, NTPC up by 1.70%, Sun Pharma up by 1.69% and Wipro up by 1.48%. On the flip side, Tata Steel down by 2.86%, Hindustan Unilever down by 1.30%, Vedanta down by 1.17%, Mahindra & Mahindra down by 1.12% and Yes Bank down by 0.72% were the top losers.

Meanwhile, Commerce and Industry Minister Suresh Prabhu has reviewed proposed agriculture export policy and new industrial policies. He also scrutinized various export promotion strategies. He said that the government working on new initiatives to take India's exports to the next level.

In March 2018, a draft Agri Export Policy has been released by the Commerce Ministry, which is aimed at doubling agricultural exports and integrate Indian farmers and farm products to the global value chain. Besides, the new industrial policy will replace the old policy of 1991 which was prepared against the backdrop of balance of payment crisis. The proposed industrial policy aims at promoting emerging sectors and modernising existing industries. It will also look to reduce regulatory hurdles and encourage adoption of frontier technologies such as robotics and artificial intelligence.

Last year, in August, the Department of Industrial Policy and Promotion (DIPP) floated a draft industrial policy aiming to create jobs for the next two decades, promote foreign technology transfer and attract $100 billion FDI annually.

The CNX Nifty traded in a range of 11,581.75 and 11,539.60. There were 25 stocks in green as against 25 stocks in red on the index.

The top gainers on Nifty were UPL up by 5.01%, Tech Mahindra up by 2.99%, Coal India up by 2.52%, Lupin up by 2.29% and Grasim Industries up by 2.27%. On the flip side, Tata Steel down by 2.57%, BPCL down by 1.77%, Vedanta down by 1.35%, Hindustan Unilever down by 1.33% and Mahindra & Mahindra down by 1.09% were the top losers.

European markets were trading mostly in green; France’s CAC rose 39.20 points or 0.72% to 5,418.85 and Germany’s DAX added 79.07 points or 0.64% to 12,410.37, while UK’s FTSE 100 was down by 13.94 points or 0.18% to 7,577.32.

Asian equity markets ended mostly in green on Tuesday despite comments from US President Donald Trump that he doesn't expect much progress from trade talks with China this week in Washington. Trump also accused China and Europe of manipulating their currencies and said he was ‘not thrilled’ with the Federal Reserve for raising interest rates. His comments dented some of the market optimism ahead of lower-level trade talks between the US and China starting later today. Investors also looked ahead to the release of the FOMC meeting minutes on Wednesday and a meeting of central bankers at the Kansas City Fed's Jackson Hole symposium later this week. Chinese shares ended higher as consumer and healthcare firms attracted bargain hunters after recent heavy losses. Further, Japanese shares ended little changed with a positive bias and the yen was flat as investors waited for the outcome of trade talks between the US and China.