Post Session: Quick Review

Indian equity benchmarks continued their record hitting spree for the second consecutive session, crossing their crucial 11,700 (Nifty) and 38,900 (Sensex) bastions for the first time ever on Tuesday. Markets started the day on optimistic note and traded in fine fettle, tracking positive cues from the global markets. Traders took encouragement with Economic policy think-tank, the National Council of Applied Economic Research (NCAER) in its latest report retaining India’s growth forecast for the current fiscal at 7.4%, citing comfortable agricultural sector outlook and a marked improvement in the external sector. The sentiments were also supported by Department of Industrial Policy and Promotion’s (DIPP) latest data showing that foreign direct investment (FDI) in India grew by 23% to $12.75 billion during the April-June quarter of 2018-19, as compared to foreign fund inflows of $10.4 billion in April-June 2017-18.

Key indices added some gains in last leg of trade, as local sentiments got buttressed with finance minister Arun Jaitley’s statement the government is looking at achieving economic growth higher than predicted by many in the current financial year and India could become the fifth largest economy (surpassing the UK) next year. Traders also remained optimistic with a private report that India can capture the Chinese commodity market vacated by US exports following the trade war between the world’s two biggest economies. However, further up-ward move got restricted as some anxiety spread among the traders with State Bank of India’s (SBI) research report Ecowrap stating that India’s current account deficit (CAD) is likely to touch 2.8% of the Gross Domestic Product (GDP) in the current fiscal (FY19) on account of surge in crude oil prices and moderate growth in exports.

On the global front, Asian markets ended mostly in green, while European markets were trading in green in early deals on Tuesday, with risk appetite sharpened by news the U.S. and Mexico had reached a deal to overhaul the North American Free Trade Agreement (NAFTA). 

Back home, select textile stocks ended higher on quick estimates by DGCI&S showing that the worst seems to be over for the textile exports, as it increased 11% year-on-year (y-o-y) to Rs 19,636 crore in July. While textile exports grew by a robust 15% y-o-y to Rs 10,879 crore during the month, apparel exports advanced by a modest 6% y-o-y to Rs 8,757 crore. Besides, Renewables sector was in focus with HSBC report stating that renewables sector in India is expected to see strong growth and favourable policy support going forward as traditional fossil fuel power projects are facing growing transition risks.

The BSE Sensex ended at 38912.09, up by 217.98 points or 0.56% after trading in a range of 38760.58 and 38920.14. There were 16 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index fell by 0.40%, while Small cap index was up by 0.35%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.95%, Energy up by 1.28%, Basic Materials up by 0.69%, Auto up by 0.50% and Power up by 0.49%, while PSU down by 1.06%, Realty down by 0.71%, Consumer Durables down by 0.69%, Oil & Gas down by 0.57% and Utilities down by 0.32% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Vedanta up by 2.33%, Adani Ports & SEZ up by 2.32%, Reliance Industries up by 2.20%, Maruti Suzuki up by 1.71% and HDFC up by 1.45%. (Provisional)

On the flip side, Yes Bank down by 2.96%, Hindustan Unilever down by 1.04%, Tata Motors - DVR down by 1.00%, SBI down by 0.97% and Indusind Bank down by 0.94% were the top losers. (Provisional)

Meanwhile, citing comfortable agricultural sector outlook and a marked improvement in the external sector, economic policy think-tank, National Council of Applied Economic Research (NCAER) has retained India’s gross domestic product (GDP) growth forecast at 7.4% for the current fiscal (FY19). As per the NCAER report, the real agriculture Gross Value Added (GVA) is envisaged to grow at 4.6%, real industry GVA at 5.1%, and real services GVA at 8.5% in 2018-19.

Both the NCAER annual and quarterly models forecast that GVA will grow at 7% per annum in 2018-19 on a year-on-year (Y-o-Y) basis. NCAER’s latest Quarterly Review of the Economy said the annual model forecasts that GDP at market prices will grow at 7.4% for 2018-19 on a Y-o-Y basis, same as May 2018. Besides, the growth rates in exports and imports, in dollar terms, are estimated at 11.9% and 15.1% respectively. The current account balance and central fiscal deficit, as percentages of GDP, are projected at 2% and 3.3% respectively.

The economic policy think tank said the trends for both rainfall and prices indicate comfortable agricultural sector outlook for the year as a whole. It noted that there was also a marked improvement in the external sector in 2018-19 and said that the financial year 2017-18 witnessed a rise of 9.9%  and 18.6%, respectively, in exports and imports, on a Y-o-Y basis. It added that the upswing continued even in FY19, wherein the total exports grew at the rate of 18% and total imports surged at 15.1% on a Y-o-Y basis during the period April-May.

The CNX Nifty ended at 11742.95, up by 51.00 points or 0.44% after trading in a range of 11710.50 and 11760.20. There were 22 stocks advancing against 27 stocks declining on the index, while 1 stock remained unchanged. (Provisional)

The top gainers on Nifty were Hindalco up by 4.17%, Reliance Industries up by 2.44%, Adani Ports &SEZ up by 2.42%, Vedanta up by 2.26% and Maruti Suzuki up by 1.73%. (Provisional)

On the flip side, GAIL India down by 4.80%, Yes Bank down by 3.20%, Cipla down by 2.11%, HPCL down by 1.83% and Dr. Reddys Lab down by 1.31% were the top losers. (Provisional)

European markets were trading in green; France’s CAC rose 12.06 points or 0.22% to 5,491.16, Germany’s DAX added 28.41 points or 0.23% to 12,566.72 and UK’s FTSE 100 rose 30.41 points or 0.40% to 7,607.90.

Asian equity markets ended mostly higher on Tuesday amid receding trade worries after the United States and Mexico agreed to overhaul the North American Free Trade Agreement (NAFTA). US President Donald Trump also indicated the US would soon begin negotiations with Canada, but suggested that any agreement could be a separate deal. Investors expect Canada too would agree to the new terms to preserve a three-nation pact. Japanese shares ended marginally higher as the US-Mexico trade deal helped lift automobile companies. Though, Chinese stocks ended slightly lower, as investors paused for breath after strong gains the previous session.