Key indices sustain rally for second straight day

Indian equity indices sustained their gaining rally for the second straight session on Wednesday, with Sensex and Nifty closing higher by around 0.40% each. The markets made a negative start of the day, amid Former RBI deputy governor Rakesh Mohan’s statement that manufacturing growth is not consistent with India’s overall Gross Domestic Product (GDP) growth figures. He noted that the country cannot grow at 8 percent without manufacturing sector posting 10 percent growth. But soon, markets staged recovery, taking support with exporters body Federation of Indian Export Organisations’ (FIEO) statement that exports are likely to touch $1 trillion in the next 3 years with the help of the government's focus to improve logistics, ease of doing business and modern trade infrastructure.

Key indices remained positive for the most part of the session to end in green terrain, as the Employees' State Insurance Corporation's (ESIC) gross payroll data showed that Job creation was slightly up at 10.88 lakh in April as compared with 10.77 lakh in the year-ago month. Gross new enrolments in 2018-19 stood at 1.49 crore, indicating that these many jobs were created in the financial year. Traders were also positive, as the Vice President Venkaiah Naidu made some suggestions to the Finance Minister with regard to the upcoming Budget. Among others, he stressed the need to take steps to protect agriculture and introduce structural changes. Naidu also suggested to the minister to undertake a review of the Import-Export Policy and protect the interests of the farming community.

On the global front, European markets were trading in green, after French consumer confidence rose to a 14-month high in June. The survey data from the statistical office Insee showed that the consumer sentiment index climbed to 101 in June from 99 in May. The score was forecast to rise marginally to its long-term average of 100. A similar higher score was last seen in April 2018. This was the sixth consecutive rise in confidence. Asian markets ended in red, as Singapore industrial production declined in May after rising in the previous month. The data from the Economic Development Board showed that manufacturing output dropped 2.4 percent year-on-year in May, after a 0.1 percent rise in April.

Back home, realty stocks ended higher, amid reports that the Centre has planned to set up a common online platform for the Real Estate Regulatory Authority (RERA) of all states and UTs, a move which will provide an opportunity to home-buyers, builders and authorities to exchange views. Besides, stocks related to the banking industry also gained, after credit rating agency, CRISIL in its latest report said that gross non-performing loans (GNPAs) of banks may reduce to 8% by March 2020. This will be driven by a combination of a reduction in fresh accretions to NPA as well as stepped-up recoveries from existing NPA accounts.

Finally, the BSE Sensex gained 157.14 points or 0.40% to 39,592.08, while the CNX Nifty was up by 51.10 points or 0.43% to 11,847.55.

The BSE Sensex touched a high and a low of 39,674.22 and 39,319.64, respectively and there were 20 stocks advancing against 11 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index surged 0.85%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Metal up by 2.88%, Power up by 2.16%, Utilities up by 1.83%, Basic Materials up by 1.63% and Realty up by 1.48%, while IT down by 0.65%, TECK down by 0.60%, Telecom down by 0.25%, FMCG down by 0.03% and Consumer Durables down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 4.40%, Power Grid up by 4.12%, Sun Pharma up by 3.59%, Yes Bank up by 2.77% and Tata Steel up by 2.59%. On the flip side, Infosys down by 1.12%, Indusind Bank down by 1.02%, Tech Mahindra down by 0.87%, Bharti Airtel down by 0.85% and Maruti Suzuki down by 0.68% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that the government is planning to bring out a national policy on e-commerce in the next 12 months to facilitate achieving holistic growth of the sector. He said India wants to engage with the world on data and e-commerce issues but there has to be reciprocity.

Goyal stated that several foreign e-commerce firms have raised concerns over some points in the draft pertaining to data. He also said that the government has decided to form an inter-ministerial panel under the Department for Promotion of Industry and Internal Trade (DPIIT) to address stakeholder grievances on FDI and the draft e-commerce policy.

In February, the government had released the draft national e-commerce policy proposing setting up a legal and technological framework for restrictions on cross-border data flow and also laid out conditions for businesses regarding collection or processing of sensitive data locally and storing it abroad.

The CNX Nifty traded in a range of 11,871.85 and 11,757.55. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 5.08%, JSW Steel up by 4.03%, Power Grid up by 3.52%, Sun Pharma up by 3.36% and Hindalco up by 3.11%. On the flip side, Britannia down by 2.80%, Indiabulls Housing Finance down by 1.74%, Infosys down by 1.16%, Indusind Bank down by 1.15% and Bharti Airtel down by 0.89% were the top losers.

European markets were trading in green; UK’s FTSE 100 rose 11.00 points or 0.15% to 7,433.43, France’s CAC increased 10.05 points or 0.18% to 5,524.62 and Germany’s DAX was up by 66.89 points or 0.55% to 12,295.33.

Asian markets ended mostly lower on Wednesday after comments from Federal Reserve officials tempered rate cut hopes. Fed Reserve Chairman Jerome Powell pushed back against pressure from President Trump to cut interest rates, saying that monetary policy should not overreact to any individual data point or short-term swing in sentiment. Separately, well-known Fed dove Bullard said that a 50 bps rate cut in July would be too much. Investors also awaited the outcome of the G20 summit this week for directional cues. Chinese shares ended lower, dragged down by financials as caution prevailed ahead of the Trump-XI meeting. Further, Japanese shares ended down after Fed Chairman Jerome Powell said the US central bank is ‘insulated from short-term political pressures,’ dampening market hopes the central bank would deliver a half-point interest-rate cut in July.