Markets end lackluster trade with marginal losses

Key equity indices ended the lackluster session of trade with marginal losses on Friday, as traders remained cautious ahead of US Federal Reserve Chairman Jerome Powell’s big Jackson Hole speech that could bring a dovish surprise. Markets started the session on positive note but soon turned pessimistic as traders turned concern about a report that the government has imposed standard conditions for as many as 25 sectors like steel, coal and oil, seeking environment clearance (EC) for expansion of existing projects or new projects. Some cautiousness also crept in with a private report that the Goods and Services Tax (GST) collections may come in as a surprise for the government as collections for the month of July are likely to be lower on both year-on year basis and a month-on-month basis. As per the report, collections may range between Rs 89,000 crore and Rs 91,000 crore for July which are to be reported in August. Traders took note of Niti Aayog vice chairman Rajiv Kumar’s statement that India needs three-four large lenders to figure among top 200 global-sized banks. He also noted that India’s banking sector is highly conservative. He made a strong case for giving banking sector more freedom to take risks and provide credit to industry especially the Micro, Small & Medium Enterprises (MSME) sector.

However, losses remained capped as traders took some solace after Moody’s Investors Service in its Global Macro Outlook for 2018-19 forecasted that India’s gross domestic product (GDP) growth is likely to be around at 7.5% in 2018 and 2019 as it is largely resilient to external pressures like those from higher oil prices. Some support also came with report that India will explore opportunities to increase exports of petroleum products, cars and motorcycles, and mobile phones to Kenya during the joint trade committee meeting of the two countries. Traders also take note of the Commerce Ministry’s statement that a National Logistics Portal is being developed to ensure ease of trading in the international and domestic markets, as India eyes lowering logistics cost from 14% of GDP to less than 10% by 2022.

On the global front, European markets trading in green in early deals on Friday, following US-China trade talks and ahead of a key speech by Jerome Powell, the chair of the US Federal Reserve. Asian markets exhibited mixed trend as trade war tensions and the prospects of a no-deal Brexit threatened to deepen the risks to global growth.

Back home, sugar stocks remained in sweet spot with the food ministry extending the deadline for exporting 2 million tonne of sugar by three months to December as only a fourth of it has been shipped so far. Stocks related to insurance sector remained in focus with International rating agency Moody’s Investors Service in its latest report stating that the launch of government’s flagship health insurance scheme, Ayushman Bharat, is credit positive for India’s insurers as it will help grow health premiums and provide insurers with cross-selling and servicing opportunities.

Finally, the BSE Sensex declined 84.96 points or 0.22% to 38,251.80, while the CNX Nifty was down by 25.65 points or 0.22% to 11,557.10.

The BSE Sensex touched a high and a low of 38,429.50 and 38,172.77, respectively and there were 13 stocks advancing against 18 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index lost 0.26%, while Small cap index was down by 0.34%.

The top gaining sectoral indices on the BSE were Metal up by 1.92%, Basic Materials up by 0.93%, Energy up by 0.64%, Oil & Gas up by 0.43% and Healthcare was up by 0.36%, while Bankex down by 0.80%, Consumer Durables down by 0.79%, FMCG down by 0.62%, IT down by 0.60% and Industrials down was by 0.51% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 4.26%, ONGC up by 1.83%, Axis Bank up by 1.23%, Wipro up by 0.97% and Mahindra & Mahindra up by 0.74%. On the flip side, Yes Bank down by 3.52%, Hero MotoCorp down by 2.08%, ICICI Bank down by 2.02%, Adani Ports & SEZ down by 1.98% and Indusind Bank down by 1.57% were the top losers.

Meanwhile, the Union Ministry of Environment, Forest and Climate Change (MoEFCC) has imposed standard environment clearance (EC) conditions for 25 major sectors to bring in ‘uniformity’. The 25 sectors include iron, steel, cement, coal, petroleum refineries, paper and pulp industries, hydro-electric projects, industrial estates, among others.

The Ministry has prepared standard conditions for 25 sectors, in order to bring uniformity on stipulated terms and conditions across the projects and sectors and as a general guidance to EAC as well as project proponents. The government has constituted green panel called Expert Appraisal Committee (EAC) which assesses the projects and makes recommendations, based on which the Environment Ministry grants the final EC. 

The standard EC conditions will have to be considered by EAC at the time of appraisal of the proposals. EAC after due diligence, can modify, delete and add conditions based on the project specific requirements.

The CNX Nifty traded in a range of 11,604.60 and 11,532.00. There were 21 stocks in green as against 28 stocks in red, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Vedanta up by 4.05%, ONGC up by 1.57%, Grasim Industries up by 1.48%, Axis Bank up by 1.07% and Zee Entertainment up by 1.05%. On the flip side, Yes Bank down by 3.74%, Titan Company down by 2.91%, Adani Ports & SEZ down by 2.00%, Hero MotoCorp down by 1.97% and ICICI Bank down by 1.74% were the top losers.

European markets were trading in green; France’s CAC rose 25.30 points or 0.46% to 5,444.63, Germany’s DAX added 26.47 points or 0.21% to 12,392.05 and UK’s FTSE 100 was up by 10.64 points or 0.14% to 7,573.86.

Asian equity markets ended mixed on Friday as trade war tensions and the prospects of a no-deal Brexit threatened to deepen the risks to global growth. The oil markets held steady while the dollar remained buoyant after US-China trade talks ended without any tangible results. Investors looked ahead to US Federal Reserve Chairman Jerome Powell's big Jackson Hole speech later today for Fed views on Turkey's currency crisis and the US-Chinese trade spat. Japanese shares ended higher as the yen remained weak and a government report showed the country's annual inflation stalled in July, raising speculation the Bank of Japan may delay its exit from ultra-loose policy. Further, Chinese shares ended marginally higher, aided by strength in banking shares.