Post Session: Quick Review

Snapping a three-session gaining run, Indian equity benchmarks ended Wednesday’s trade on a negative note, as traders remained on sidelines ahead of key macro data - index of industrial production (IIP) for April and consumer price index-based inflation for May scheduled to be released later today. Indian equities opened in negative territory, in the light of weak Asian cues due to lingering trade war between the US and China. Traders remained concerned with former Chief Economic Advisor Arvind Subramanian’s statement that country’s growth has been overestimated by nearly 2.5 per cent under both UPA and NDA rule. The actual growth is likely to be lower, at nearly 4.5 per cent, down from 7 per cent between 2011-12 and 2016-17.

However, markets trimmed some of their losses in last hours of trade, as some optimism remained among the investors with the Reserve Bank of India’s (RBI) statement that it will infuse Rs 15,000 crore into the financial system through bond purchases on June 13. Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of (six) Government securities under OMOs through multi-security auction using the multiple price method. Traders took a note of Ficci President Sandip Somany made a case for the creation of a separate ministry for employment to effectively coordinate efforts to generate jobs, terming it one of the key challenges for the new government. 

On the global front, Asian markets ended mostly lower on Wednesday, while European markets were trading in red amid lingering uncertainties surrounding the US-China trade friction after US President Donald Trump said that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five ‘major points’ which he did not specify. Back home, metal stocks were in focus with report that the Steel Ministry has suggested its commerce counterpart to bring certain changes in norms used for imposing anti-dumping duties with a view to making them more effective for protecting domestic players from cheap imports. Textile sector were in focus with Dilip Gaur, chairman of the Confederation of Indian Industry (CII) national committee on textile and apparel stating that India, which is emerging as a global textile hub and aims to be a $350-billion industry by 2025 from $137 billion now, needs to focus on man-made fibres to stay globally competitive.

The BSE Sensex ended at 39791.19, down by 159.27 points or 0.40% after trading in a range of 39623.53 and 39982.10. There were 7 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.83%, while Small cap index was down by 0.47%. (Provisional)

The few gaining sectoral indices on the BSE were Metal up by 0.50%, FMCG up by 0.09% and Energy up by 0.01%, while Realty down by 1.96%, Telecom down by 1.55%, Auto down by 1.12%, Capital Goods down by 1.04% and Bankex down by 0.92% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 2.48%, ONGC up by 0.92%, Vedanta up by 0.62%, Sun Pharma up by 0.53% and TCS up by 0.47%. (Provisional)

On the flip side, Yes Bank down by 3.30%, Maruti Suzuki down by 1.76%, Hero MotoCorp down by 1.62%, Kotak Mahindra Bank down by 1.59% and Bajaj Auto down by 1.42% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) has said that it will infuse Rs 15,000 crore into the financial system through bond purchases on June 13, with a view of evolving liquidity situation in the market. It has decided to conduct purchase of (six) Government securities under open market operations (OMOs) through multi-security auction using the multiple price method. It has decided the same based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward.

The central bank further said there is an overall aggregate ceiling of Rs 15,000 crore for all the securities in the basket put together and there is no security-wise notified amount. The participants have to submit their offers in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system.

The result of the auction will be announced on the same day and payment to successful participants will be made on the following day. The RBI uses OMO for injecting liquidity into the system through the purchase of government bonds (G-sec). The sale or buying of G-secs infuses or reduces liquidity.

The CNX Nifty is currently trading at 11915.30, down by 50.30 points or 0.42% after trading in a range of 11866.35 and 11962.45. There were 15 stocks advancing against 34 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Steel up by 2.71%, GAIL India up by 1.31%, ONGC up by 1.03%, Britannia Inds up by 0.66% and Vedanta up by 0.62%. (Provisional)

On the flip side, Indiabulls Housing Finance down by 7.20%, Bharti Infratel down by 3.60%, Yes Bank down by 3.30%, Maruti Suzuki down by 1.67% and Hero MotoCorp down by 1.66% were the top losers. (Provisional)

European markets were trading in red, UK’s FTSE 100 decreased 43.79 points or 0.59% to 7,354.66, France’s CAC fell 32.92 points or 0.61% to 5,375.53 and Germany’s DAX was down by 51.27 points or 0.42% to 12,104.54.

Asian markets ended mostly lower on Wednesday amid lingering uncertainties surrounding the US-China trade friction after US President Donald Trump said that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five ‘major points’ which he did not specify. Chinese shares ended lower after the release of weak factory inflation data and amid concerns over an escalation in the Sino-US trade war. China's consumer price inflation accelerated on food prices in May, while factory gate inflation slowed on weak commodity demand, data from National Bureau of Statistics showed. Consumer prices advanced 2.7 percent year-on-year in May, after gaining 2.5 percent in April. The rate was the fastest in more than a year and came in line with expectations. On the other hand, producer price inflation eased to 0.6 percent in May, as expected, from 0.9 percent in April. The decrease was largely due to the fall in manufactured industrial input prices. Further, Japanese shares ended down amid the yen’s rise slightly against the dollar as investors fretted about a worsening US-China relationship. Investors ignored data showing an unexpected increase in Japan's core machinery orders in April. The total value of core machine orders in Japan advanced a seasonally adjusted 5.2 percent sequentially in April - standing at 913.7 billion yen. That beat forecasts for a drop of 0.8 percent following the 3.8 percent gain in March.