Post Session: Quick Review

Indian equity benchmarks ended the choppy day of trade on a flat note with negative bias on Friday, as investors remained on sidelines ahead of the release of the gross domestic product (GDP) data for April-June quarter today. After making a cautious start, markets gained traction and traded in fine fettle, as traders reacted positively to Finance Minister Arun Jaitley’s statement that India is likely to surpass the UK to become the world’s fifth largest economy next year on growing consumption and strong economic activity. Some optimism also spread among the local traders with a private report stating that the economic growth is expected to rise to 7.6% in the April-June quarter of 2018-19 from a sub-6% figure in the year-ago period mainly due to a low-base effect.

However, key indices erased gains and slipped into red zone, as market-men got anxious with Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta’s statement that exporters are facing uncertainty due to a continuous depreciation of the domestic currency as they are not able to negotiate properly prices of goods in the global markets. Anxiety also persisted with the International Energy Agency’s (IEA) statement crude oil prices are likely to rise further in 2018 and may remain above $75 a barrel for some time, owing to the geo-political situations across the world - including Iran sanctions and drop in Venezuela production. Although, losses remained limited as traders found some solace with Niti Aayog Vice-Chairman Rajiv Kumar’s statement that the government is committed to fiscal discipline and added that the Prime Minister resisted the pressure to cut down excise duty on fuel despite rising oil prices.

On the global front, Asian markets ended mostly lower on Thursday, while European markets were trading in red in early deals, amid heightened fears of an escalating global trade war between the world's two largest economies. Back home, Cement sector stocks ended higher despite ICRA’s report that even with pick-up in cement demand in Q1 FY19, higher coal, pet coke prices and freight costs in the near-term are likely to put pressure on the profitability margins and debt metrics of the cement companies. Besides, Airline sector was in focus with report that the aviation ministry is now working on a package to provide some relief to the financially-stressed airline sector. It will seek finance ministry’s approval for the package, though an earlier request of getting jet fuel in lower GST slab was not approved.

The BSE Sensex ended at 38643.79, down by 46.31 points or 0.12% after trading in a range of 38562.21 and 38838.45. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.29%, while Small cap index was up by 0.55%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 2.11%, IT up by 1.34%, Power up by 1.31%, Capital Goods up by 1.17% and TECK up by 1.11%, while Energy down by 1.65%, Metal down by 0.66%, Oil & Gas down by 0.40%, Bankex down by 0.16% and Auto down by 0.14% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 2.72%, Power Grid up by 2.45%, Tata Motors - DVR up by 2.31%, Bajaj Auto up by 1.89% and Sun Pharma up by 1.85%. (Provisional)

On the flip side, Yes Bank down by 5.14%, Reliance Industries down by 2.79%, Mahindra & Mahindra down by 1.67%, Maruti Suzuki down by 1.21% and Tata Steel down by 1.20% were the top losers. (Provisional)

Meanwhile, expressing concerns over continues depreciation of the Indian currency, Federation of Indian Export Organisations (FIEO) has said that exporters are facing uncertainty due to this issue. FIEO President Ganesh Kumar Gupta has said that exporters are not able to negotiate properly prices of goods in the global markets.

Gupta said exporters are unable to hedge as they do not know where the rupee value would go tomorrow. With fluctuation in rupee value, he said that global buyers start asking for review of contracts. He added that only 20% exporters make profits due to the depreciation as they do not indulge in hedging practices and 80% do not get any benefit. Besides, exports grew by about 10% to $303 billion in 2017-18.

FIEO President further expressed hope that the rupee would stabilise at 67-68 in the coming days. Meanwhile, Indian rupee continued its fall and touched life-time low of 70.82 on August 30, 2018, on strong month-end demand for the US currency amid sustained foreign fund outflows.

The CNX Nifty ended at 11675.45, down by 1.35 points or 0.01% after trading in a range of 11640.10 and 11727.65. There were 28 stocks advancing against 21 stocks declining on the index, while 1 stock remained unchanged. (Provisional)

The top gainers on Nifty were Tech Mahindra up by 4.89%, Dr. Reddys Lab up by 4.70%, Lupin up by 4.26%, Tata Motors up by 3.12% and HCL Tech up by 3.10%. (Provisional)

On the flip side, Yes Bank down by 5.04%, Reliance Industries down by 2.82%, Bajaj Finserv down by 2.64%, Bajaj Finance down by 2.32% and Mahindra & Mahindra down by 1.85% were the top losers. (Provisional)

European markets were trading in red; France’s CAC shed 49.45 points or 0.91% to 5,428.61, Germany’s DAX was down by 111.65 points or 0.90% to 12,382.59 and UK’s FTSE 100 fell 28.16 points or 0.38% to 7,487.87.

Asian equity markets ended mostly lower on Friday after media reports suggested that US President Donald Trump is eager to push ahead with higher tariffs on Chinese exports as soon as next week. Trump's threat to pull out of the World Trade Organization and his comments that the European Union is ‘possibly almost as bad as China’ when it comes to trade, also stoked fears of a worsening trade war. Chinese stocks ended lower as renewed concerns over the US-China trade spat overshadowed positive economic data. The manufacturing sector in China continued to expand in August, and at a slightly faster rate, the latest survey from the National Bureau of Statistics showed with a PMI score of 51.3. That beat expectations for a score of 51.0 and was up from 51.2 in July. The non-manufacturing PMI came in at 54.2 also exceeding expectations for 53.7 and up from 54.0 in the previous month. Further, Japanese shares ended marginally lower as jitters over emerging market currencies persisted and a slew of economic data painted a mixed picture of the economy. Japan's industrial output dropped marginally in July and the unemployment rate rose marginally from a month earlier, while the annual core consumer inflation held steady in the month, separate reports showed. Meanwhile, Malaysian markets were closed for a national holiday.