Sensex, Nifty end volatile session with marginal gains

Indian equity benchmarks ended volatile session with marginal gains on Friday, with Sensex and Nifty settling above their crucial psychological levels of 39,600 and 11,850, respectively. After a cautious start, key indices swung between green and red terrain, 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. Traders got anxious, amid a private report stating that marked slowdown in Asia’s third-largest economy pushed growth concerns to the top of the Reserve Bank of India’s (RBI’s) agenda, suggesting more policy easing will follow its third interest-rate cut of the year.

In the last leg of trade, markets staged recovery to settle the day above their neutral lines, tracking firm global markets. The street got relief with 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 added that removal of charges on NEFT and RTGS transactions will bring great relief to the people and will help in promoting Digital India initiative. Adding some comfort, industry chambers hailed the RBI's decision to cut lending rate by 0.25 per cent as a welcome step to boost demand and revive economy. Traders took a note of the RBI governor Shaktikanta Das’ statement that the RBI expects the government to continue to be broadly prudent on the fiscal side.

On the global front, European markets were trading in green, as France's industrial production recovered in April despite the weakness in output of transport equipment and petroleum. The data published by the statistical office Insee showed that industrial output rose 0.4 percent in April from March when it was down 1.1 percent. The April rate came in line with expectations. Asian markets ended in green, after Singapore's private sector economy continued to expand in May, albeit at a slower pace. The latest survey from Nikkei revealed with a business PMI score of 52.1. That's down from 53.3 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Back home, auto industry stocks ended lower, after Federation of Automobile Dealers Associations (FADA) said the hike in third-party motor insurance premiums for FY20 will further hit vehicle sales, which have already been witnessing a prolonged slump. Insurance Regulatory and Development Authority of India's (IRDAI) order to hike premium rates for the third party motor insurance for the current financial year will come into effect from June 16. Further, metal industry stocks also fell, despite CARE Ratings’ report that India’s steel consumption is expected to grow by 5%-6% this year, on the back of government’s expenditure towards infrastructure and construction.

Finally, the BSE Sensex gained 86.18 points or 0.22% to 39,615.90, while the CNX Nifty was up by 26.90 points or 0.23% to 11,870.65.

The BSE Sensex touched a high and a low of 39,703.10 and 39,279.47, respectively and there were 12 stocks advancing against 19 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.17%, while Small cap index was down by 0.11%.

The top gaining sectoral indices on the BSE were Telecom up by 0.79%, Consumer Durables up by 0.64%, Bankex up by 0.61%, TECK up by 0.43% and IT up by 0.39%, while Utilities down by 1.29%, Power down by 0.75%, Energy down by 0.57%, Realty down by 0.53% and Healthcare down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.90%, Bajaj Finance up by 1.69%, Mahindra & Mahindra up by 1.49%, SBI up by 1.36% and ICICI Bank up by 1.28%. On the flip side, Yes Bank down by 2.37%, Power Grid down by 2.22%, Coal India down by 1.47%, Sun Pharma down by 1.13% and Bajaj Auto down by 0.89% were the top losers.

Meanwhile, the textile industry is expecting to become a $350 billion industry by 2025 from the current $137 billion. For India, there is a need to develop man-made fibre to remain competitive in the global market. Textiles Secretary Ajit B Chavan said it is high time that the industry changes its approach to move into the second growth phase and aim for exports of around $100 billion from the current $40 billion.

Chavan further added ‘we need to come up with detailed plans that can take the industry to its next level. All these years we have focused on more production scale, but now the focus has to be on quality and other aspects to improve our competitiveness’.

Besides, in view of the US China trade war, India needs to create a level playing field for local players and protect the domestic industry. The US China trade war holds a lot of opportunities for India, but India need to be competitive.

The CNX Nifty traded in a range of 11,897.50 and 11,769.50. There were 20 stocks advancing against 29 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Indusind Bank up by 2.26%, Bharti Infratel up by 2.14%, Bajaj Finance up by 1.80%, SBI up by 1.57% and BPCL up by 1.56%. On the flip side, Dr. Reddy’s 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 1.72% were the top losers.

European markets were trading in green; UK’s FTSE 100 surged 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.