Post Session: Quick Review

Indian equity benchmarks traded in red throughout the session on Friday and sharp fall in late trading pulled the indices to low of the day. The market made a weak start amid lacklustre movement in Asian peers. Sentiments remain dampened with ICRA’s research report stating that the earnings released by 642 companies in the Indian corporate sector revealed that the revenue growth in the fourth quarter (January-March) of FY18-19 hit a six-quarter low at 10 percent. It added that weak consumer sentiments and softening of commodity prices led to a fall in the revenue growth in the last quarter of FY19.  Traders paid no heed towards the Reserve Bank of India’s statement that it will infuse Rs 12,500 crore into the financial system through bond purchases on June 20. The decision has taken based on a review of the evolving liquidity conditions and assessment of the durable liquidity needs going forward. Easing wholesale price index (WPI) inflation data also failed to support the markets. Wholesale price-based inflation slipped to a 22-month low of 2.45% in May helped by falling prices of food articles, fuel and power items. Meanwhile, the government has reduced the total rate of contribution made by workers and employers towards the Employees’ State Insurance (ESI) scheme to 4 percent from the existing 6.5 percent for the first time in over two decades. A move would results in an estimated annual saving of around Rs 5,000 crore for firms.

On the global front, Asian markets ended mostly lower on Friday, while European markets were trading in red as worries about rising tensions in the Middle East and headlines related to US-China trade disputes kept underlying sentiment cautious. Back home, telecom stocks were in focus with report that the apex decision making body at the Telecom Department has decided to refer to TRAI for reconsideration the recommendations on spectrum auction amid industry's concerns on pricing. The Digital Communications Commission (DCC) also approved the terms and conditions for 5G trials in the country.

The BSE Sensex ended at 39430.53, down by 310.83 points or 0.78% after trading in a range of 39363.45 and 39799.90. There were 5 stocks advancing against 26 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.15%, while Small cap index down by 0.86%. (Provisional)

The only gaining sectoral index on the BSE was Capital Goods up by 0.15%, while Realty down by 2.43%, Telecom down by 1.60%, Bankex down by 1.40%, FMCG down by 1.17% and Auto down by 1.09% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 0.60%, Vedanta up by 0.53%, Power Grid up by 0.41%, Sun Pharma up by 0.26% and TCS up by 0.17%. (Provisional)

On the flip side, Indusind Bank down by 4.44%, Tata Motors - DVR down by 2.78%, Bharti Airtel down by 2.59%, Axis Bank down by 2.53% and Kotak Mahindra Bank down by 2.30% were the top losers. (Provisional)

Meanwhile, in order to meet the durable liquidity needs of the system going forward, the Reserve Bank of India (RBI) has said that it will infuse Rs 12,500 crore into the financial system through purchase of government securities (G-sec) under the Open Market Operation (OMO) on June 20, 2019.

It added that the decision has been taken based on a review of the evolving liquidity conditions and assessment of the durable liquidity needs going forward. The government securities to be purchased in the auction.

Recently, the RBI had injected Rs 15,000 crore into the system through bond purchases. The RBI uses OMO for injecting liquidity into the system through the purchase of government bonds (G-sec) to regulate money supply in the market. The sale or buying of g-secs infuses or reduces liquidity.

The CNX Nifty ended at 11810.85, down by 103.20 points or 0.87% after trading in a range of 11797.70 and 11911.85. There were 7 stocks advancing against 42 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 1.53%, Larsen & Toubro up by 0.50%, Sun Pharma up by 0.50%, Adani Ports &SEZ up by 0.45% and Power Grid up by 0.39%. (Provisional)

On the flip side, Zee Entertainment down by 4.50%, Indusind Bank down by 4.33%, Indiabulls Housing Finance down by 4.08%, Bharti Airtel down by 2.75% and Eicher Motors down by 2.35% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 26.83 points or 0.36% to 7,341.74, France’s CAC decreased 11.34 points or 0.21% to 5,364.29 and Germany’s DAX decreased 80.18 points or 0.66% to 12,088.87.

Asian markets ended mostly lower on Friday as worries about rising tensions in the Middle East and headlines related to US-China trade disputes kept underlying sentiment cautious. The US blamed Iran for the attacks in the Gulf of Oman and said it will defend its forces and interests in the Middle East. Chinese shares ended down as investors kept a cautious stance ahead of data that was released after market hours, while US tariff threats continued to weigh. Government data released late in the day showed that China's industrial output grew at a slower pace, while growth in retail sales improved more-than-expected in May. Industrial production advanced 5 percent year-on-year in May, while growth was expected to remain stable at 5.4 percent. Retail sales grew at a faster pace of 8.6 percent after rising 7.2 percent in the previous month. Sales were forecast to advance 8.1 percent. China's fixed-asset investment grew 5.6 percent year on year in the first five months, down 0.5 percentage points from the first four months. The unemployment rate remained stable at 5 percent in May. Though, Japanese shares ended higher, led by energy stocks as oil prices surged on supply concerns.