Post Session: Quick Review

Indian equity benchmarks traded with volatility, but in green terrain, throughout the day and ended Monday’s trade with a gain of over half a percent, on account of strong rally in global stock markets. This was the second consecutive day of rise for the domestic markets, recapturing their crucial 11,900 (Nifty) and 39,800 (Sensex) bastions. Benchmark indices witnessed a gap-up start of session, as traders took some encouragement with report that foreign investors have pumped in a net amount of Rs 7,095 crore into the Indian capital markets during the first week of June in anticipation of continued policy reforms. Traders remained optimistic with Trade Promotion Council of India’s (TPCI) statement that the government should take six concrete steps such as reducing cost and time of port clearance for goods and enhancing availability of credit with a view to boost exports.

However, indices gave up most of their early gains in the afternoon trade to come off their intraday high points, as market-men got anxious with India Meteorological Department’s (IMD) data which showed that a delay in the arrival of monsoon has pushed the country’s rainfall deficiency in the first nine days of June to 45%. Monsoon made an onset over Kerala on June 8, a week after its normal arrival date. This has also delayed its arrival in different parts of the country. Anxiety also spread among the investors with Reserve Bank of India’s (RBI) Survey showing that consumer confidence dropped to 97.3 in May 2019, after a sharp upsurge of 104.6 in the March 2019 round.

Key indices regained traction in the last leg of trade to end higher, as optimism remained among traders with the RBI Governor Shaktikanta Das’ statement that the revised guidelines to deal with stressed assets will sustain improvement in credit culture that have been ushered in by the efforts of the Government and the Reserve Bank so far and will go a long way in promoting a strong and resilient financial system in India. Traders took note of report that India pitched for promoting micro, small and medium enterprises (MSMEs) in developing countries as they are important for employment and income generation.

On the global front, Asian markets ended higher on Monday following the gains on Wall Street Friday after disappointing US jobs data for May raised hopes that the Federal Reserve will cut interest rates in the near future. European markets were trading in green, after US President Donald Trump announced that proposed tariffs on Mexican imports would be suspended indefinitely. Back home, power stocks ended higher as Power and New and Renewable Energy Minister Raj Kumar Singh exuded confidence that the renewable energy target of 175 gigawatt (GW) by 2022 would be achieved.

The BSE Sensex ended at 39830.58, up by 214.68 points or 0.54% after trading in a range of 39619.97 and 39979.48. There were 20 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index rose 0.10%, while Small cap index was down by 0.52%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.74%, TECK up by 1.57%, FMCG up by 1.19%, Capital Goods up by 0.77% and Consumer Durables up by 0.60%, while Oil & Gas down by 1.06%, PSU down by 0.67% and Energy down by 0.19% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 2.31%, Infosys up by 1.86%, Bharti Airtel up by 1.77%, HCL Tech up by 1.45% and ITC up by 1.41%. (Provisional)

On the flip side, Yes Bank down by 2.61%, Tata Motors down by 1.83%, Coal India down by 1.58%, ONGC down by 1.55% and HDFC down by 0.59% were the top losers. (Provisional)

Meanwhile, with a view to boost exports, Trade Promotion Council of India (TPCI) has said that the government should take six concrete steps such as reducing cost and time of port clearance for goods and enhancing availability of credit. Suggesting the six point agenda to push exports, TPCI said identifying new product basket which can easily find world market would have inherent advantage over India's global competitors. Besides, it asked for promotion of Indian products to new and emerging markets creating a national portal for global trade inquires and providing incentives to exporters based on their performances.

TPCI Chairman Mohit Singla has said that Indian port charges should be reduced as it make exports less competitive compared to rest of the world. India has one of the highest port charges, number of days for port clearance and delivery as compared to its major competitors. He added that the logistic cost per kilometer of road transport for India is high as compared to China, Bangladesh, Vietnam and Sri Lanka. While, the custom and port clearance takes six days for India, 1.5 days for China, six days for Vietnam and three days for Sri Lanka. He said availability of credit at competitive rates would significantly increase competitiveness.

Calling for external outreach and promotion of Indian products to new and emerging markets, Singla said, India could utilise 80 trade promotion offices for promotion of various products and brands. He added that in terms of products, processed food alone has huge scope after value addition and can fetch forex exchange. On phasing out subsidies for exports, he said, the government needs a cautious view to deal with this matter as the buyers also negotiate and demands some part of the subsidy. Since 2011-12, India's exports have been hovering at around $300 billion. During 2018-19, the shipments aggregated at $331 billion. Moreover, promoting exports helps a country to create jobs, boost manufacturing and earn more foreign exchange.

The CNX Nifty ended at 11933.65, up by 63.00 points or 0.53% after trading in a range of 11871.75 and 11975.05. There were 35 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Britannia Industries up by 3.46%, Tech Mahindra up by 2.30%, TCS up by 2.21%, JSW Steel up by 1.94% and Dr. Reddy’s Lab up by 1.90%. (Provisional)

On the flip side, BPCL down by 3.24%, Yes Bank down by 2.39%, Coal India down by 2.11%, GAIL India down by 1.91% and Tata Motors down by 1.77% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 32.34 points or 0.44% to 7,364.28 and France’s CAC increased 14.54 points or 0.27% to 5,378.59.

Asian markets ended higher on Monday following the gains on Wall Street Friday after disappointing US jobs data for May raised hopes that the Federal Reserve will cut interest rates in the near future. In addition, news that the US and Mexico have reached a migration deal to avert the implementation of President Donald Trump's threatened tariffs set to begin on Monday, boosted sentiment. The Japanese shares are rising, with stocks higher across the board. Automakers are gaining on news of the US-Mexico deal, as several Japanese automakers use Mexico as a production base.