Markets stage recovery after early fall

Indian equity indices staged late recovery after early fall on Tuesday’s trading session, with Sensex and Nifty reclaiming their crucial levels of 39,800 and 11,900, respectively. After a cautious start, key indices entered into negative terrain, as the finance ministry said that Goods and Services Tax (GST) collection registered at Rs 99,939 crore in the month of June 2019. The growth was sluggish as compared to Rs 1,00,289 crore in May 2019. Adding more worries, the audit report of Comptroller and Auditor General of India (CAG) showed that total service tax arrears rose to Rs 1.66 lakh crore in 2017-18, up from Rs 1.18 lakh crore in the preceding financial year.

But in the second half of the day, benchmarks erased all of their losses to end in positive terrain. Domestic sentiments got boost, after Finance Minister Nirmala Sitharaman said economic growth is high on the agenda of the Narendra Modi 2.0 government and various steps are being taken to accelerate the GDP. Traders took some support with reports that the growth of India's eight core sectors has improved to 5.1% in May 2019 against 4.1% in the same month last year, helped by rise in output in steel and electricity. According to data released by the ministry of Commerce and Industry, the combined Index of eight core industries stood at 138.7 in May 2019.

On the global front, European markets were trading in red, after Germany's retail sales grew at a slower rate in May. The data from Destatis showed that retail sales climbed 4.0 percent year-on-year in May, after a 4.6 percent increase in April.  In nominal terms, retail sales dropped 0.4 percent from the previous month, while turnover grew 4.8 percent from the same period last year. Asian markets ended mixed, as Japan's consumer confidence weakened to the lowest level in four-and-a-half years in June. The consumer confidence index for households with two or more persons fell to a seasonally adjusted 38.7 in June from 39.4 in May.

Back home, stocks related to the metal industry ended higher, after the Ministry of Steel released draft steel scrap policy, which is aimed at promoting circular economy in the steel sector and produce high-quality ferrous scrap for quality steel production thus reducing dependence on imports. Further, banking industry stocks remained in focus, amid reports showing that unclaimed deposits in the banking system have witnessed a jump of 26.8 per cent to Rs 14,578 crore in 2018. The unclaimed deposits rose to Rs 11,494 crore in 2017 from Rs 8,928 crore in 2016.

Finally, the BSE Sensex gained 129.98 points or 0.33% to 39,816.48, while the CNX Nifty was up by 44.70 points or 0.38% to 11,910.30.

The BSE Sensex touched a high and a low of 39,838.49 and 39,499.19, respectively and there were 19 stocks advancing against 12 stocks declining on the index.

The BSE Mid cap index rose 0.38%, while Small cap index remained unchanged.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.11%, Energy up by 0.94%, Utilities up by 0.84%, IT up by 0.84% and Power up by 0.80%, while Realty down by 1.82%, Healthcare down by 0.63%, Bankex down by 0.38% and Industrials down by 0.03% were the few losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.89%, HDFC up by 1.50%, Bharti Airtel up by 1.43%, Infosys up by 1.20% and HCL Tech. up by 1.02%. On the flip side, Yes Bank down by 7.60%, Tata Motors down by 2.47%, Sun Pharma down by 2.36%, Tata Motors - DVR down by 2.33% and Indusind Bank down by 1.17% were the top losers.

Meanwhile, the Reserve Bank has released the quarterly house price index (HPI) (base: 2010-11=100) for Q4 of last financial year (Q4FY19), based on transaction data received from housing registration authorities in ten major cities (Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow and Mumbai). It showed that on a year-on-year basis, the growth in all-India HPI continued to moderate and stood at 3.6 per cent in Q4FY19 as against 5.1 per cent in the previous quarter and 6.7 per cent a year ago.

Barring Jaipur and Kanpur, all the cities recorded an increase in HPI on an annual basis. The annual growth or contraction in HPI ranged from 19.5 per cent (in Kochi) to (-)11.4 per cent (in Jaipur).

Besides, on a year-on-year basis, the all-India HPI had recorded a growth of 5.7% in Q2FY19 as against 5.3% in the previous quarter and 7.4% a year ago. Except Kanpur, all other cities recorded a rise in housing prices on an annual basis. The annual growth/contraction in HPI ranged from 20.8% (in Kochi) to (-) 3.0% (in Kanpur), indicating large divergences in city-wise housing price movements. City-wise, large variance was observed, with Chennai recording the highest rise 6.2% and Kanpur recording the maximum contraction (-) 5.6%.

The CNX Nifty traded in a range of 11,917.45 and 11,814.70. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were UPL up by 3.75%, ONGC up by 2.98%, Indiabulls Housing Finance up by 2.83%, Indian Oil Corporation up by 2.01% and Eicher Motors up by 1.86%. On the flip side, Yes Bank down by 8.29%, Tata Motors down by 2.68%, Sun Pharma down by 2.63%, Dr. Reddy’s Lab down by 1.01% and Axis Bank down by 0.97% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 7.31 points or 0.13% to 5,560.60 and Germany’s DAX shed 28.99 points or 0.23% to 12,492.39, while UK’s FTSE 100 was up by 29.85 points or 0.4% to 7,527.35.

Asian markets ended mixed on Tuesday as weak global manufacturing data rekindled worries on slowing growth and the US proposed new tariffs on European goods as part of a continuing dispute over aircraft subsidies. Chinese shares ended little changed with a negative bias after US President Donald Trump said on Monday that trade talks with China have ‘already begun’ but any deal would need to be somewhat tilted in Washington's favor. Meanwhile, Japanese shares ended marginally higher on skepticism over whether the United States and China can reach a deal to end their bitter trade dispute.