Post Session: Quick Review

In a volatile session, Indian equity Markets managed to end in green terrain on Wednesday, on the back of buying by participants amid positive trade in other Asian equities. Key indices have made a positive start and traded jubilantly during the morning session as traders took encouragement with the Reserve Bank of India’s (RBI) statement that it will infuse Rs 12,500 crore of liquidity into the system through purchase of government bonds. 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 five government securities. Investors also took note of a private report that seven million jobs were formalised between 2015 and 2018 because of various measures, including GST, demonetisation, Skill India policies, fixed-term contract, maternity leave enhancement, among others. The report estimated job formalisation to the tune of 11 million between 2018 and 2021.

However, markets reversed all of their strong gains and taken a turn towards the negative zone in late afternoon session, as Healthcare, Telecom and Auto shares witnessed selling. Though, markets once again entered into green terrain and managed to keep their heads above water in dying hour of trade, as traders found solace with a private report stating that the Centre is considering the establishment of a special purpose vehicle (SPV) to monitor, screen, and rate commercial borrowers. One of the initiatives the new government will work on in its first 100 days, the SPV, similar to the Goods and Services Tax Network (GSTN) will form a database compiling information from public sector banks (PSBs).

On the global front, Asian markets ended higher on Wednesday after Donald Trump hailed 'very good' phone talks with Xi Jinping and said the two would meet at the G20 next week, renewing hopes of a deal to end a painful China-US trade war that has jolted the global economy. European markets were trading mostly in red, ahead of a much-anticipated U.S. Federal Reserve decision on interest rates. Back home, aviation stocks were buzzing with aviation regulator DGCA’s data showing that domestic air passenger traffic saw a rebound in May as it increased by 2.96 per cent after a slump in April. The domestic air traffic in May this year consisted of 12.20 million passengers as compared to 11.85 million passengers in the same month last year.

The BSE Sensex ended at 39154.75, up by 108.41 points or 0.28% after trading in a range of 38881.05 and 39435.80. There were 15 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.67%, while Small cap index was down by 1.30%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.34%, Consumer Durables up by 0.93%, Metal up by 0.76%, Power up by 0.37% and FMCG up by 0.20%, while Healthcare down by 1.17%, Telecom down by 1.03%, Auto down by 1.03%, Industrials down by 0.82% and Basic Materials down by 0.50% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 5.31%, Kotak Mahindra Bank up by 2.69%, NTPC up by 1.77%, HDFC up by 1.24% and Power Grid up by 1.09%. (Provisional)

On the flip side, Yes Bank down by 4.76%, Indusind Bank down by 2.30%, Hero MotoCorp down by 2.13%, Tata Motors - DVR down by 1.95% and Tata Motors down by 1.93% were the top losers. (Provisional)

Meanwhile, with a view of evolving liquidity situation in the market, the Reserve Bank of India (RBI) has said that it will infuse Rs 12,500 crore of liquidity into the system through purchase of government bonds (G-sec). The Central bank would purchase five government bonds under open market operations (OMOs) on June 20, 2019.

RBI in its release said 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 five government securities under OMOs. The Central bank would buy 7.94 per cent-2021; 7.72 per cent-2025; 6.79 per cent-2027; 7.61 per cent-2030 and 7.73 per cent-2034 government bonds under the OMO.

The eligible participants should submit their offers in electronic format on the RBI Core Banking Solution (E-Kuber) system on June 20. Recently, on June 11, the RBI had infused Rs 15,000 crore into the system through OMO purchase of six government bonds. The RBI uses OMO for injecting liquidity into the system through the purchase of G-sec. The sale or buying of G-secs infuses or reduces liquidity.

The CNX Nifty ended at 11710.20, up by 18.70 points or 0.16% after trading in a range of 11625.10 and 11802.50. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Steel up by 5.41%, Zee Entertainment up by 5.32%, Kotak Mahindra Bank up by 2.73%, NTPC up by 1.77% and Titan Co up by 1.45%. (Provisional)

On the flip side, Indiabulls Housing Finance down by 8.08%, Yes Bank down by 4.89%, UPL down by 4.51%, Adani Ports &SEZ down by 3.08% and Cipla down by 2.40% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 decreased 25.49 points or 0.34% to 7,417.55 and France’s CAC fell 4.47 points or 0.08% to 5,505.26, while Germany’s DAX was up by 9.12 points or 0.07% to 12,340.87.

Asian markets ended higher on Wednesday after European Central Bank President Mario Draghi opened the door to more monetary stimulus and US President Donald Trump announced plans for an ‘extended’ meeting with Chinese leader Xi Jinping at the Group of 20 summit in Japan next week. Investors also waited for the outcome of the FOMC meeting amid increased expectations for dovish remarks. Chinese shares ended higher on expectations of monetary easing in both the United States and Europe. Further, Japanese shares closed up as dovish comments from ECB President Mario Draghi and Trump's upbeat tone on the trade front boosted investors' appetite for risk. Fed rate cut hopes also supported sentiment.