Post Session: Quick Review

Indian equity benchmarks traded between green and red terrain for most part of the day and somehow managed to end the session slightly in green on Friday, on the back of buying by participants amid positive global cues. Key indices have made a cautious start and traded in red as traders remained anxious with the India Meteorological Department’s (IMD) statement that the arrival of the monsoon in the national capital is likely to be delayed by two-three days, though the city is expected to receive normal rainfall. It said normally, the monsoon reaches Delhi by June 29. Since there is a delay in its onset in the southern peninsula, the wind system is likely to take two-three days longer to reach northwest India. However, markets soon erased losses and started trading on positive route, as sentiments turned optimistic with report that a G-20 surveillance note expects India’s economy to grow 7.3% in 2019 and 7.5% in 2020. Traders also took note of the Reserve Bank of India (RBI) governor Shaktikanta Das’ statement that the RBI expects the government to continue to be broadly prudent on the fiscal side. He said the government has broadly maintained the fiscal deficit glide path and RBI expects it to remain broadly fiscally prudent going forward.

But, volatility continued on the bourses as the key indices once again slipped in negative zone in mid-morning trade as some anxiety remained among the investors amid a private report that marked slowdown in Asia’s third-largest economy pushed growth concerns to the top of the Reserve Bank of India’s agenda, suggesting more policy easing will follow its third interest-rate cut of the year. However, markets bounced back from their losses in dying hour of trade and managed to close the session in green, taking support from Commerce and Industry Minister Piyush Goyal’s statement that the repo rate cut by the RBI will help boost India's economy by making loans affordable to MSMEs, exporters and home buyers. He also said that removal of charges on NEFT and RTGS transactions will bring great relief to the people and will help in promoting Digital India initiative.

On the global front, Asian markets ended higher on Friday, while European markets were trading in green on optimism about a possible trade deal between the U.S. and Mexico before tariffs take effect. Back home, textile stocks were in focus with report that India, which is emerging as a global textile hub with huge potential, needs to develop man-made fibre to remain competitive in the global market and it aims to be a $350 billion industry by 2025.

The BSE Sensex ended at 39559.61, up by 29.89 points or 0.08% after trading in a range of 39279.47 and 39703.10. There were 10 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.20%, while Small cap index was down by 0.16%.(Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 0.74%, Bankex up by 0.52%, Consumer Durables up by 0.42%, TECK up by 0.26% and IT up by 0.20%, while Utilities down by 1.30%, Power down by 0.80%, Energy down by 0.76%, Healthcare down by 0.67% and Metal down by 0.65% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 2.10%, Bajaj Finance up by 1.77%, Mahindra & Mahindra up by 1.33%, SBI up by 1.25% and Vedanta up by 1.04%. (Provisional)

On the flip side, Yes Bank down by 2.41%, Power Grid down by 2.20%, Coal India down by 1.51%, Sun Pharma Industries down by 1.45% and NTPC down by 1.21% were the top losers. (Provisional)

Meanwhile, a G-20 surveillance note has said that Indian economy is expected to grow 7.3% in 2019 and 7.5% in 2020. The note said recent manufacturing indicators point to a tentative rebound in Asian and Latin American countries except India. The note comes ahead of the G-20 finance ministers and central bank governors’ meetings on June 8-9. It has been prepared by International Monetary Fund (IMF) staff but does not necessarily reflect the views of the IMF Executive Board.

The note showed that in India, reforms to hiring and dismissal regulations would help incentivise formal job creation. It added that combined with an increase in female labour force participation, would help absorb the country’s large demographic dividend. In commodity exports, economic diversification remains essential for sustained strong growth.

It said global growth is projected to remain stable at around 3.6% but will rely on weights shifting toward countries with relatively higher growth rates, mainly G-20 emerging markets such as China and India. The April 2019 World Economic Outlook (WEO) revised down projections for global growth to 3.3% in 2019, 0.4 percentage points lower than projected in the October 2018 WEO.

The CNX Nifty ended at 11863.75, up by 20.00 points or 0.17% after trading in a range of 11769.50 and 11897.50. There were 20 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indusind Bank up by 2.26%, Bharti Infratel up by 2.14%, Bajaj Finance up by 1.80%, BPCL up by 1.56% and SBI up by 1.54%. (Provisional)

On the flip side, Dr. Reddys Lab down by 2.91%, Yes Bank down by 2.37%, Cipla down by 1.83%, Power Grid down by 1.79% and JSW Steel down by 1.76% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 48.55 points or 0.67% to 7,308.40, France’s CAC rose 78.45 points or 1.49% to 5,356.88 and Germany’s DAX was up by 96.72 points or 0.81% to 12,049.86.

Asian markets ended higher on Friday after reports showing that the Trump administration could delay tariffs on Mexican imports. Investors also looked ahead to the release of the US jobs data for May to be released later in the day for further clues on the prospects for a near-term interest rate cut by the Federal Reserve. The report is expected to show employment increased by 185,000 jobs in May after surging up by 263,000 jobs in April. The unemployment rate is expected to hold at 3.6 percent. Following Wednesday's weaker-than-expected private sector jobs data, the jobs report due later in the day could have a notable impact on the perceived prospects for a near-term interest rate cut by the Federal Reserve. Japanese shares ended higher as investors awaited the outcome of the US-Mexican tariff deal as well as the release of latest US jobs report for May. Investors shrugged off a report showing that the average of household spending in Japan rose an annual 1.3 percent in April, missing expectations for an increase of 2.7 percent and down from 2.1 percent in March. Markets in Taiwan, China and Hong Kong were closed for the Dragon Boat Festival, while Indonesia remains shuttered for Eid-ul-Fitr.