Post Session: Quick Review

Indian stock markets traded firmly in green on Monday and ended with gains of over half a percent, on the back of buying by participants, tracking positive global sentiment stemmed from trade truce between the US and China. Traders took encouragement with report that the Reserve Bank of India (RBI) has relaxed the leverage ratio (LR) for banks to help them boost their lending activities. The leverage ratio stands reduced to 4% for Domestic Systemically Important Banks (DSIBs) and 3.5% for other banks effective from the quarter commencing October 1, 2019. Some optimism also came with report that foreign investors infused a net amount of Rs 10,384 crore into the Indian capital markets in June and remained net buyers for the fifth month in a row on expectations of continued economic reforms.

Markets extended northward moment in the late afternoon trade, as sentiments remained up-beat amid report that the finance ministry will come up with further reforms in the indirect tax system with the introduction of new return system, rationalization of cash ledger system and a single refund-disbursing mechanism, among others. Some support also came with a report that the government is working on a proposal to extend tax benefits to retail investors in its two exchange-traded funds - CPSE and Bharat-22 ETF. However, markets trimmed some of their gains, as market-men got anxious with monthly survey showing that the Indian manufacturing sector growth moderated in June, largely owing to softer increase in new work intakes, which in turn translated into slower rises in output and employment. The IHS Markit India Manufacturing Purchasing Managers' Index (PMI) was at 52.1 in June, down from May's three-month high of 52.7, indicating a slight setback in the Indian manufacturing sector. 

On the global front, Asian markets ended mostly higher on Monday, while European markets were trading in green after the US and China agreed to restart trade talks on the sidelines of the G-20 summit and decided to not impose additional tariffs on each other's products. Back home, power stocks came in focus amid report that supply of coal to the power sector by state-owned Coal India declined by 2.6% to 80.9 million tonnes (MT) in the first two months (April-May) of the ongoing fiscal as compared to 83.1 MT of coal supplied in April-May period of FY’18.

The BSE Sensex ended at 39675.52, up by 280.88 points or 0.71% after trading in a range of 39541.09 and 39764.82. There were 23 stocks advancing against 8 stocks declining on the index.(Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.53%, while Small cap index was up by 0.30%.(Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.68%, Auto up by 1.17%, Power up by 1.14%, Healthcare up by 1.09%, Consumer Discretionary Goods & Services up by 0.74% while, Oil & Gas down by 1.69%, PSU down by 0.71%, Consumer Durables down by 0.30%, Metal down by 0.11%, Telecom down by 0.11% were the losing indices on BSE.(Provisional)

The top gainers on the Sensex were Tata Motors up by 3.08%, Bajaj Auto up by 2.93%, Tata Motors - DVR up by 2.64%, HDFC up by 2.60% and Indusind Bank up by 1.69%. (Provisional)

On the flip side, ONGC down by 4.02%, HCL Tech. down by 1.55%, Hindustan Unilever down by 0.52%, Maruti Suzuki down by 0.43% and Asian Paints down by 0.37% were the top losers.(Provisional)

Meanwhile, the Controller General of Accounts (CGA) in its latest data has showed that the government's fiscal deficit, or the gap between the government's expenditure and revenue, touched 52% of the Budget Estimate (BE) for the full year in the first two months (April-May) of 2019-20. In absolute terms, the fiscal deficit was Rs 3,66,157 crore, while it was 55.3% of 2018-19 budget estimate in the year-ago period.

The data showed that revenue receipts of the government during April-May, 2019-20 was 7.3% of the BE. In the year-ago period also, the revenue receipts were at similar level. However, the capital expenditure was only 14.2% of the BE as compared to 21.3% in the year-ago period. Total expenditure during April-May period stood at Rs 5.12 lakh crore or 18.4% of BE. It was 19.4% of BE in the corresponding period of the last fiscal.

In the Interim Budget passed in February, the government had estimated the fiscal deficit at Rs 7.03 lakh crore for 2019-20. The government aims to restrict the fiscal deficit at 3.4% of the Gross Domestic Product (GDP) during the current fiscal, same as the last financial year.

The CNX Nifty ended at 11861.75, up by 72.90 points or 0.62% after trading in a range of 11830.80 and 11884.65. There were 33 stocks advancing against 17 stocks declining on the index.(Provisional)

The top gainers on Nifty were Zee Entertainment up by 7.23%, Dr. Reddys Lab up by 4.10%, Tata Motors up by 3.14%, Bajaj Auto up by 2.96% and HDFC up by 2.52%. (Provisional)

On the flip side, BPCL down by 4.12%, ONGC down by 3.96%, Indian Oil Corp. down by 2.50%, Coal India down by 1.91% and HCL Tech. down by 1.48% were the top losers.(Provisional)

European markets were trading in green; UK’s FTSE 100 increased 77.87 points or 1.05% to 7,503.50, France’s CAC rose 42.71 points or 0.77% to 5,581.68 and Germany’s DAX added 159.27 points or 1.28% to 12,558.07.

Asian markets ended mostly higher on Monday after the US and China agreed to restart trade talks on the sidelines of the G-20 summit and decided to not impose additional tariffs on each other's products. The Unites States agreed to put off additional tariffs on Chinese goods indefinitely while removing some curbs on Huawei Technologies Co. buying high-tech equipment from the US. In response, China agreed to make unspecified new purchases of US farm products and return to the negotiating table. Chinese shares ended higher after China said it would soften or lift restrictions on foreign investment in new sectors from July 30. Investors shrugged off data showing that Chinese manufacturing activity contracted for the first time in four months in June on trade disputes. The Caixin manufacturing PMI dropped to 49.4 from 50.2 in May as trade tensions caused renewed declines in total sales, export orders and production. Further, Japanese shares ended higher as the safe-haven yen slid on improved risk sentiment and tech shares gained ground on an easing of restrictions on Huawei. Meanwhile, Hong Kong was closed for a public holiday.