Post Session: Quick Review

Indian equity indices saw an extended sell-off for the sixth continuous day on Wednesday, as mounting trade tensions between US and China continued to weigh. Heavy selling in the last hour of trade largely forced the markets to close at day’s low, with Sensex and Nifty settling below their crucial 37,800 and 11,400 levels, respectively. Key indices opened in red and stayed in the negative terrain for whole trading session, as traders remain concerned on report that US Commerce Secretary Wilbur Ross warned any retaliatory tariff by India in response to the United States' planned withdrawal of trade privileges will not be appropriate under WTO rules. India has raised the prospect of higher import duties on more than 20 US goods if US President Donald Trump presses ahead with a plan announced in March to end the Generalized System of Preferences (GSP) for India. India is the biggest beneficiary of GSP, which allows preferential duty-free imports of up to $5.6 billion from the South Asian nation. Subdued corporate results and caution ahead of national election outcome also weighed on the markets.

Markets extended their fall in last leg of trade, amid reports that direct Tax collections fell short by Rs 82,000 crore at Rs 11.18 lakh crore during 2018-19 with lower corporate tax collections emerging as one of the reasons for the lower mop. The government had set a target of Rs 12 lakh crore. Market participants shrugged off private report that the number of business-to-business (B2B) startups has jumped four times to 3,200 in 2018 from 800 in 2014, enabling faster growth of the ecosystem, attracting investments worth $3.7 billion from $797 million, during the period. Traders also failed to draw any sense of relief from a report that in order to facilitate private companies in India and the US, Commerce and Industry Minister Suresh Prabhu has made a case for a government-to-government agreement between both the countries.

On the global front, Asian markets ended lower on Wednesday, while European markets were trading in red, as mixed trade data from China and concerns that a US-China trade war will dent growth kept underlying sentiment cautious. Back home, IT stocks ended lower with US Labour Secretary Alexander Acosta stating that IT service companies based in India, which account for a large number of H-1B applications, are likely to face the additional financial burden because of proposed increase in H-1B filing fees. Solar stocks were in focus on report that India needs faster implementation of roof-top solar projects to meet the 175 gigawatts of renewable energy target by 2022.

The BSE Sensex ended at 37771.75, down by 504.88 points or 1.32% after trading in a range of 37752.96 and 38248.57. There were 3 stocks advancing against 28 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.05%, while Small cap index was down by 1.27%.(Provisional)

The top losing sectoral indices on the BSE were Energy down by 2.72%, Realty down by 2.24%, Power down by 1.59%, Oil & Gas down by 1.51% and PSU down by 1.50%, while there were no gainers on the BSE sectoral front. (Provisional)

The few gainers on the Sensex were HCL Tech. up by 0.28%, Asian Paints up by 0.17% and TCS up by 0.13%. (Provisional)

On the flip side, Bajaj Finance down by 3.95%, Reliance Industries down by 3.50%, Tata Motors down by 2.83%, Yes Bank down by 2.67% and Tata Motors - DVR down by 2.63% were the top losers. (Provisional)

Meanwhile, in order to facilitate private companies in India and the US, Commerce and Industry Minister Suresh Prabhu has made a case for a government-to-government agreement between both the countries. The commerce minister stated ‘public policies may sometimes create challenges for corporate but if we have a government-to-government agreement, we can clearly spell out the certainty, stability, forward-looking policies and this will facilitate companies to prepare their corporate plans.

He further expressed hope that problems being faced by businesses in India and the US can be sorted out in a way that benefits both the countries. He added one needs to look at big picture and make sure that irritants are tackled in a manner that helps foster this relationship. The remarks assumes significance as Indian companies are raising issues like restrictive visa regime in the US, American firms are flagging concerns related to India's intellectual property policies and e-commerce norms.

Besides, he said India's economy is expected to touch $5 trillion in the next 7-8 years and $10 trillion by 2035 and in this, US companies can help. These numbers are possible to achieve only when India has friends like the US. With this growth, US companies will also benefit.

The CNX Nifty ended at 11356.40, down by 141.50 points or 1.23% after trading in a range of 11346.95 and 11479.10. There were 9 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were UPL up by 1.15%, Hindalco up by 0.67%, Titan Comapny up by 0.37%, JSW Steel up by 0.21% and Cipla up by 0.19%. (Provisional)

On the flip side, Zee Entertainment down by 10.54%, Bajaj Finance down by 3.73%, Reliance Industries down by 3.54%, Tata Motors down by 3.04% and Bajaj Finserv down by 2.94% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 26.30 points or 0.36% to 7,234.17, France’s CAC was down by 12.30 points or 0.23% to 7,234.17 and Germany’s DAX fell 17.45 points or 0.14% to 12,075.29.

Asian markets ended lower on Wednesday as mixed trade data from China and concerns that a US-China trade war will dent growth kept underlying sentiment cautious. Meanwhile, after the US confirmed that it planned to raise tariffs on $200 billion of Chinese goods this Friday, investors remained edgy ahead of trade talks on Thursday and Friday in Washington. Chinese shares ended lower as trade worries lingered and April exports data added to investor concerns over slowing growth. China's exports unexpectedly shrank 2.7 percent in April from a year earlier, while imports surprised with their first increase in five months. Japanese shares ended down as the yen rallied to a six-week high against the dollar on fears of worsening US-China trade tensions.