Post Session: Quick Review

Indian equity benchmarks ended the volatile day of trade in red terrain on Tuesday, as investors awaited RBI's monetary policy decision, amid weak cues from global markets. Key indices have made a cautious start and traded marginally in red, as traders remain worried with a private report that the pre-monsoon rainfall in the country was the second lowest in 65 years. The three-month pre-monsoon season March, April and May ended with a rainfall deficiency of 25%. As per the report, all the four meteorological divisions - Northwest India, Central India, East-Northeast India and South Peninsula - recorded deficit rainfall of 30%, 18%, 14% and 47%, respectively. Selling also crept in with the Reserve Bank of India’s (RBI) statement that Over 6,800 cases of bank fraud involving an unprecedented Rs 71,500 crore have been reported in 2018-19. In the last 11 fiscal years, a total of 53,334 cases of fraud were reported by banks involving a massive amount of Rs 2.05 lakh crore.

Markets continued their weak run in late afternoon deals, as anxiety remained among the traders with Industry chamber, Confederation of Indian Industry’s (CII) statement that the US decision to withdraw export incentives from India has been taken in a haste and would hurt the domestic exporters. CII President Vikram Kirloskar expressed hope that both the US and India would discuss the matter and find an amicable solution to this issue. However, further losses got restricted as investors found some comfort with Finance Secretary Subhash Chandra Garg’s statement that declining global oil prices, stable rupee and falling interest rate are sure signs of high growth in coming months. India's growth rate has declined to 5-year low of 5.8% in the fourth quarter of the previous fiscal and 6.8% for the full financial year 2018-19. Traders took note of a report that India is forecast to overtake the UK to become the world’s fifth largest economy this year and projected to surpass Japan to feature at the second position in the Asia-Pacific region by 2025. It added the economic outlook ‘looks positive’ for the second term of Modi government, with GDP growth forecast to average around 7 per cent per year over the 2019-2023 period.

On the global front, Asian markets ended mostly lower on Tuesday in cautious trade as worries about rising trade tensions and impact on global economic growth sapped risk appetite. European markets were trading in green, after the euro area unemployment rate dropped to the lowest since 2008 in April. The figures from Eurostat showed that the unemployment rate came in at 7.6 percent versus 7.7 percent in March. Back home, the power sector stocks were in focus with global ratings agency Moody's Investors Service’s statement that the increasing share of renewables in the total energy mix of the country may lead to an increase in regulatory risk for coal-based projects in the long term.

The BSE Sensex ended at 40121.65, down by 145.97 points or 0.36% after trading in a range of 40031.05 and 40312.07. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.15%, while Small cap index was down by 0.21%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.38%, Utilities up by 0.30%, Metal up by 0.29%, Telecom up by 0.24% and Industrials up by 0.13%, while IT down by 1.55%, TECK down by 1.44%, Oil & Gas down by 0.88%, Healthcare down by 0.87% and Basic Materials down by 0.81% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.51%, Axis Bank up by 1.48%, NTPC up by 1.47%, Coal India up by 1.32% and Vedanta up by 1.25%.
On the flip side, Hero MotoCorp down by 3.11%, TCS down by 2.46%, Asian Paints down by 2.41%, HCL Tech. down by 2.09% and Bajaj Auto down by 1.68% were the top losers.

Meanwhile, expressing hopes on growth of economy, Finance Secretary Subhash Chandra Garg has said that declining global oil prices, stable rupee and falling interest rate are sure signs of high growth in coming months following the government’s data showed that India’s economy slowed down in the fourth quarter as well as in full fiscal year 2018-19.

Garg said ‘Turn around in demand and financing conditions beginning well. PMI manufacturing is at 52.7. Crude is moving towards 60 dollars. Govt bond yield has gone below 7%. Spread for NBFCs/HFCs over Govt bond is narrowing. Rupee is firmly below 70. Sure signs of coming high growth.’ Earlier, he had said slowdown would continue in the first quarter of this fiscal. However, he had expressed hope that growth will pick up from the second quarter of the current financial year.
Besides, India's growth rate has declined to 5-year low of 5.8% in in Q4FY19 and the country lost the fastest-growing large economy status, trailing China’s growth (6.4%) for the first time in nearly two years. The full-year GDP growth, too, slumped to a five-year low of 6.8% in FY19.

The CNX Nifty ended at 12033.05, down by 55.50 points or 0.46% after trading in a range of 12005.85 and 12095.20. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.68%, Bharti Infratel up by 2.05%, Axis Bank up by 1.51%, NTPC up by 1.43% and Vedanta up by 1.07%.

On the flip side, Zee Entertainment down by 3.85%, Hero MotoCorp down by 2.85%, Asian Paints down by 2.55%, Indian Oil Corp. down by 2.50% and TCS down by 2.43% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 12.07 points or 0.17% to 7,196.87, France’s CAC rose 5.50 points or 0.1% to 5,246.96 and Germany’s DAX was up by 104.68 points or 0.89% to 11,897.49.

Asian markets ended mostly lower on Tuesday in cautious trade as worries about rising trade tensions and impact on global economic growth sapped risk appetite. Tech stocks in Asia followed their US counterparts lower as news of an antitrust probe into big tech companies stoked concerns about the sector. St. Louis Fed President James Bullard said that interest rates may have to be cut soon because of low inflation and the trade war’s threat to the economy. Some forecasters now expect as many as two rate cuts by the end of the year. Seoul shares ended lower as weak GDP data and rising trade tensions dented investor sentiment. Meanwhile, Japanese shares closed flat with a negative bias in choppy trade amid worries about global economic growth and on a stronger safe-haven yen. The Indonesia market is closed all week in observance of Eid-ul-Fitr.