Post Session: Quick Review

Tracking muted trend in global markets, the key Indian equity benchmarks ended Monday’s session lower, impacted by trade war fears and volatile rupee. After a weak start, the key indices remained under the grip of bears, amid a private report stating that the government's rupee depreciation arresting measures announced Friday may not drive fund inflows and are a negative from a longer term perspective as they increase short term debt. Domestic sentiments also got hit after another private report which stated that India’s world-beating stock market run is over. It has downgraded domestic stocks to the equivalent of a hold rating from buy. This is the first time it has lowered Indian stocks since 2014. Adding some pessimism, ICRA in its latest report said that states are likely to miss fiscal consolidation targets in the current financial year (FY19), on the back of various majors like funding of crop loan waivers, election-related spending and the flood relief.

Further, the market participants took a note of another private report stating that ahead of the festive season, the surge in petrol rates has left consumers scrambling and cutting household expenses to adjust with the price hike. The street paid no heed towards Finance Minister Arun Jaitley’s statement that the government is confident of meeting its fiscal deficit target of 3.3% of gross domestic product (GDP) in the fiscal year 2018-19. Traders even overlooked data report showing that India’s merchandise exports rose at the fastest pace in three months in the month of August 2018, mainly on the back of healthy growth in petroleum products, engineering, pharma, and gems and jewellery shipments. As per the data released by the Commerce Ministry, exports grew by 19.21% to $27.84 billion in August 2018, as compared to $23.36 billion in the same month a year ago.

On the global front, European markets were trading in red, ahead of final inflation data from euro area which is due later in the session. However, inflation is expected to ease to 2 percent in August, in line with flash estimate, from 2.1 percent in July. Asian markets ended in red, amid the US-China trade standoff that could imperil global economic growth. Back home, on the sectoral front, metal stocks ended in red, amid reports that the decision to impose steep tariffs by the US on steel and aluminium may impact the domestic metal sector. Separately, steel minister Chaudhary Birender Singh said negotiations are under way with the US over the 25% tariff it had imposed on steel imports.

The BSE Sensex ended at 37585.51, down by 505.13 points or 1.33% after trading in a range of 37548.93 and 38027.81. There were 4 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell by 0.76%, while Small cap index down by 0.05%. (Provisional)

The few gaining sectoral indices on the BSE were Realty up by 1.36%, Power up by 0.14% and Utilities up by 0.04%, while Energy down by 1.30%, Consumer Durables down by 1.25%, FMCG down by 1.20%, Bankex down by 1.08% and Healthcare down by 1.08% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 0.42%, Adani Ports & SEZ up by 0.32%, Power Grid Corporation up by 0.10% and Indusind Bank up by 0.07%. On the flip side, Sun Pharma down by 2.75%, Tata Motors down by 2.50%, HDFC down by 2.38%, Reliance Industries down by 2.30% and Asian Paints down by 2.25% were the top losers. (Provisional)

Meanwhile, allaying market concerns that a confluence of factors could derail the India’s economic growth, Finance Minister Arun Jaitley has said that the government is confident of meeting its fiscal deficit target of 3.3% of gross domestic product (GDP) in the fiscal year 2018-19. He added that the government is sure of meeting the fiscal deficit target given robust tax collections.

Jaitley said ‘We will have a growth rate higher than what we’d projected earlier this year in the budget’. He also said the fiscal year that ends in March 2019, will be completed without any spending cuts and inflation remained broadly under control.

Finance Minister’s comment comes a day after he outlined a slew of measures aimed at stemming a decline in the rupee-the worst-performing Asian currency this year. Despite strong GDP growth, the rupee has weakened about 11% this year amid higher oil prices and an emerging markets sell-off. This has widened India’s current account deficit and pushed its balance of payments into the red in April-June for the first time in six quarters.

The CNX Nifty is currently trading at 11377.75, down by 137.45 points or 1.19% after trading in a range of 11366.90 and 11464.95. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 2.68%, HPCL up by 2.26%, Eicher Motors up by 0.95%, Tech Mahindra up by 0.93% and Power Grid Corporation up by 0.87%. On the flip side, Sun Pharma down by 2.86%, Bharti Infratel down by 2.82%, Bajaj Finance down by 2.53%, HDFC down by 2.42% and Tata Motors down by 2.38% were the top losers. (Provisional)

All European markets were trading in red; UK’s FTSE 100 decreased 13.62 points or 0.19% to 7,290.42, France’s CAC fell 12.41 points or 0.23% to 5,340.16 and Germany’s DAX was down by 46.26 points or 0.38% to 12,078.07.

Asian markets ended in red on Monday after talks between the US and Canadian chief negotiators ended inconclusively last week and the Wall Street Journal reported that Beijing is considering declining the offer of talks with the US aimed at diffusing trade tensions, as it isn't prepared to negotiate with a ‘gun pointed to its head’. Further, reports that the Trump administration has instructed aides to proceed with plans to impose tariffs on Chinese imports as early as this week, which too dented Asian market sentiments. Chinese shares ended lower as trade concerns resurfaced before the US announcement of new US tariffs on Chinese products. Meanwhile, the markets in Japan and Malaysia were closed for the Respect for the Aged Day and Malaysia Day holidays, respectively.