Post Session: Quick Review

Extending their losing streak for second straight session, Indian equity benchmarks ended Monday’s trade on a pessimistic note, on the back of trade war fears which pulled the Sensex and Nifty below 39,000, 11,700 levels. Markets traded on feeble note since the beginning, as traders remain concerned about India Meteorological Department stating that the overall monsoon deficiency in the country has reached 43 per cent due to its sluggish pace. Some cautiousness also came in with report that the continuing of high crude and gold imports pushed India’s trade deficit to a six-month high of $15.36 billion in May. Besides, India's exports grew by 3.93 per cent to $30 billion in May on account of healthy growth in sectors such as chemicals, pharmaceuticals and engineering, while imports too rose by 4.31 per cent to $45.35 billion in May.

Selling got intensified during final hours of trade and local barometer gauges traded at intraday low levels, as market sentiment was further dampened with report that housing finance growth is set to slow down to 13-15 percent this fiscal, lower than the average of the past three years, due to the lingering liquidity issues faced by non-banking lenders. There can also be an adverse impact on the outstanding housing credit, which stood at Rs 19.1 lakh crore as of March 2019. Traders overlooked the Reserve Bank of India’s report showing that inching closer to its historic peak, India's forex kitty increased by $1.686 billion to $423.554 billion for the week to June 7.

On the global front, Asian markets ended mixed on Monday as investors were cautious ahead of a closely-watched Federal Reserve meeting, while political tensions in the Middle East and Hong Kong kept risk-appetite in check. European markets were trading in green, as Italy's consumer price inflation slowed more than initially estimated to a 13-month low in May. Back home, stocks related to tea industry were in focus, as the commerce ministry's Tea Board is considering an industry demand for setting up minimum benchmark prices for different grades of tea leaves. Indian Tea Association (ITA) has demanded that the government should set up minimum benchmark prices for different grades of tea leaves to promote the growth of the sector and push exports.

The BSE Sensex ended at 38942.81, down by 509.26 points or 1.29% after trading in a range of 38911.49 and 39540.42. There were 2 stocks advancing against 29 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.37%, while Small cap index was down by 1.35%. (Provisional)

The top losing sectoral indices on the BSE were Metal down by 2.93%, Oil & Gas down by 2.56%, Energy down by 2.56%, Basic Materials down by 2.31% and Telecom down by 1.85%. (Provisional)

The top gainers on the Sensex were Yes Bank up by 0.74% and Coal India up by 0.06%. (Provisional)

On the flip side, Tata Steel down by 5.49%, Tata Motors down by 3.20%, ONGC down by 3.20%, Vedanta down by 3.15% and Tata Motors - DVR down by 2.98% were the top losers. (Provisional)

Meanwhile, in response to higher tariffs imposed by Washington on Indian products like steel and aluminium, India has increased customs duties on 28 US products, including almond, pulses and walnut with effect from June 15, 2019. The move will hurt American exporters of these 28 items as they will have to pay higher duties, making those items costlier in the Indian market. Earlier, America had imposed 25% tariff on steel and a 10% import duty on aluminium products.

India extended the deadline for imposition of these duties eight times in the hope that some solution would emerge during a negotiation between India and the US on a proposed trade package. But those negotiations came to a halt following the decision of the US to withdraw export incentives to Indian exporters under its Generalised System of Preferences (GSP) programme. These benefits were rolled back from June 5. It will impact goods worth $5.5 billion from India to America.

The country has notified higher tariffs on several goods. Import duty on walnut has been hiked to 120% from 30%, duty on chickpeas, Bengal gram (chana) and masur dal will be raised to 70%, from 30% currently. Levy on lentils will be increased to 40%. The duty on boric acid and binders for foundry moulds would be hiked to 7.5%, while that on domestic reagents will be increased to 10%.

The other products on which duties will be hiked include certain kind of nuts, iron and steel products, apples, pears, flat rolled products of stainless steel, other alloy steel, tube and pipe fittings, and screws, bolts and rivets. Besides, India’s exports to the US in 2017-18 stood at $47.9 billion, while imports were at $26.7 billion. The trade balance is in favour of India.

The CNX Nifty ended at 11667.30, down by 156.00 points or 1.32% after trading in a range of 11657.75 and 11844.05. There were 4 stocks advancing against 46 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 0.96%, Zee Entertainment up by 0.34%, Wipro up by 0.08% and Coal India up by 0.04%. (Provisional)

On the flip side, Tata Steel down by 5.61%, JSW Steel down by 3.67%, Indiabulls Housing Finance down by 3.60%, ONGC down by 3.57% and Tata Motors down by 3.41% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 9.68 points or 0.13% to 7,355.46, France’s CAC rose 14.43 points or 0.27% to 5,382.05 and Germany’s DAX was up by 22.99 points or 0.19% to 12,119.39.

Asian markets ended mixed on Monday as investors awaited the outcome of the US Federal Reserve and the Bank of Japan meetings due this week. Political tensions in the Middle East and Hong Kong also kept risk-appetite in check. Chinese shares ended up as investors watched the US Trade Representative's public hearings on the Trump administration's plans to impose fresh tariffs on Chinese-made goods, starting June 19. Further, Hong Kong shares ended higher after the territory's leader Carrie Lam climbed down on a bill that would have allowed extradition to China.