Post Session: Quick Review

Indian equity benchmarks went down for the seventh straight trade session on Thursday, as escalated trade tensions between China and the US have prompted investors to remain cautious. Markets traded in negative note since the beginning, as traders remain concerned with the report that the Reserve Bank of India (RBI) has warned that income support schemes and farm loan waivers would lead to fiscal slippages for the states. The RBI listed out specific factors that would drive fiscal slippages in the revised estimates of 2018-19, including farm loan waivers and income support schemes. Key indices added losses in the afternoon deals, as sentiments remain dampened with former finance minister P Chidambaram’s statement that macroeconomic indicators confirm that the Indian economy has entered a disastrous phase of slowdown. He further said the Finance Ministry's report is a damning indictment of the state of the economy in the country.

But, the markets gave up most of their losses in late afternoon session, as traders found some solace with a report that India is expecting improvement in its ranking in the World Bank’s doing business report this year particularly in indicators such as paying taxes and trading across borders. But, the trade remained in negative terrain, as anxiety persisted with a private report stating that the Indian economy is running the risk of a structural crisis, and could soon be ensnared in a 'middle-income trap', eventually becoming like Brazil or South Africa. Lower-than-expected Q4 earnings along with weakness in the rupee also dampened the trading sentiment.

On the global front, Asian markets ended lower on Thursday, while European markets were trading in red as investors fretted ahead of high-stakes trade talks between China and the United States. Back home, stocks related to Telecom sector ended lower despite industry body COAI stating that stability and rationality may to return to the telecom market by the fourth quarter of 2019-20, as mobile operators move beyond hyper-competitive pricing into tapping new, value-added avenues of revenue to bolster topline and profit.

The BSE Sensex ended at 37565.64, down by 223.49 points or 0.59% after trading in a range of 37405.40 and 37780.46. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.10%, while Small cap index was down by 0.34%. (Provisional)

The top gaining sectoral indices on the BSE were TECK up by 0.59%, IT up by 0.49%, Realty up by 0.43%, Consumer Durables up by 0.25% and FMCG up by 0.16%, while Energy down by 2.71%, Metal down by 1.45%, Power down by 1.27%, Oil & Gas down by 1.14% and Telecom down by 0.85% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 6.13%, Bajaj Finance up by 1.61%, Hero MotoCorp up by 1.31%, Bajaj Auto up by 1.00% and Hindustan Unilever up by 0.92%. (Provisional)

On the flip side, Reliance Industries down by 3.54%, Asian Paints down by 2.71%, Coal India down by 2.65%, NTPC down by 2.44% and Bharti Airtel down by 2.05% were the top losers. (Provisional)

Meanwhile, secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Ramesh Abhishek has said India is hoping to further improve its rank in World Bank’s Doing Business report this year especially in indicators of paying taxes, insolvency resolution, trading across borders, issue of building permits and starting a business.  Improving ranking helps a country to provide a better investment climate for investors. The next report is expected to be released in October 2019. India improved its ranking by 23 places to the 77th position in the 2018 report. India is aiming to improve its ranking to the top 50th in the coming years.

The World Bank in its annual Doing Business report ranks nations based on 10 parameters relating to starting and doing business in a country. These parameters include ease of starting a business, construction permits, getting electricity, getting credit, paying taxes, trade across borders, enforcing contracts and resolving insolvency.

The government's initiatives such as relaxed norms for company incorporation and removing the requirement of a bank account for GST registration may help India further improve its ranking.  Other steps, which the government has taken, include clubbing of several forms into one; elimination of fee for incorporation of companies where authorised capital is up to Rs 15 lakh, removal of company seal or rubber stamp and combined registration for EPFO (Employees' Provident Fund Organisation) and Employees' State Insurance Corporation (ESIC).

The CNX Nifty ended at 11304.05, down by 55.40 points or 0.49% after trading in a range of 11255.05 and 11357.60. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 8.40%, Yes Bank up by 6.28%, Bajaj Finserv up by 1.71%, Bajaj Finance up by 1.46% and Hero MotoCorp up by 1.35%. (Provisional)

On the flip side, Reliance Industries down by 3.44%, BPCL down by 3.41%, Asian Paints down by 2.75%, Coal India down by 2.73% and NTPC down by 2.29% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 32.01 points or 0.44% to 7,238.99, France’s CAC was down by 70.09 points or 1.29% to 5,347.50 and Germany’s DAX fell 94.31 points or 0.77% to 12,085.62.

Asian markets ended lower on Thursday as investors waited to see if the US and China can strike a trade deal during two days of talks in Washington starting later in the day. Underlying sentiment turned cautious after US President Donald Trump said he would be happy to keep tariffs on Chinese imports, while Beijing announced it would take ‘necessary countermeasures’. Japanese shares ended lower as the yen remained well bid against the dollar on safe-haven demand. Fears of the rapidly escalating trade tensions were eased a bit by China inflation data suggesting demand may be starting to perk up thanks to Beijing's stimulus. China's consumer price inflation rose to a six-month high in April, while producer price inflation increased at the fastest pace in four months. The consumer price index rose 2.5 percent year-on-year, following a 2.3 percent increase in March. The producer price index rose an annual 0.9 percent in the month, following a 0.4 percent increase in March. Separately, central bank data showed that new yuan loans given by Chinese banks totaled CNY 1.02 trillion in April, well below expectations, and March's CNY 1.69 trillion.