Post Session: Quick Review

Indian equity Markets traded range-bound throughout the intraday trade session and somehow managed to end in green terrain on Wednesday, as investors remained on the sidelines a day before the new government tables the Economic Survey in the Parliament on Thursday, July 4. Key indices have made cautious start and traded flat, amid sharp fall in crude oil prices. Some cautiousness came with the finance minister’s statement that India's state-owned banks had classified Rs 1.50 trillion ($21.76 billion) worth of loans as wilful defaults in 2018-19, with the biggest lender State Bank of India accounting for nearly a third.  However, some buying crept in as traders found some solace with Finance Minister Nirmala Sitharaman’s statement that India still continues to be the fastest growing economy and demonetisation has had no effect on the Indian economy. Investors were also taking some support with Agriculture Minister Narendra Singh Tomar’s statement that there was 'no cause of concern' about monsoon following the latest IMD estimate, but the government is keeping a close watch on it. He said that the sowing of kharif (summer) crops like paddy will pick up as the IMD estimates good rains in the coming months.

Though, gains were limited as anxiety remained among the traders with a monthly survey showed the country’s services sector activity in June contracted for the first time since May 2018 as weak sales, competitive pressures and unfavourable taxation hampered output. The IHS Markit India Services Business Activity Index fell to 49.6 in June, down from 50.2 in May, as broadly stagnant sales caused the first drop in business activity in over a year. Traders took note of report that the apex NBFC body Finance Industry Development Council (FIDC) said they should be allowed to avail of refinance facility under the Mudra scheme and also setting up of a permanent refinance window at RBI similar to the one that National Housing Bank (NHB) offers them to help meet their liquidity needs. The liquidity crisis has seen a massive 19 percent points drop in disbursement by NBFCs in the fourth quarter of FY19.

On the global front, Asian markets ended lower on Wednesday as lingering worries about trade tensions and slowing global economic growth dented investors' appetite for risk. European markets were trading in green, after Spain's service sector growth improved to the most in last three months in June on stronger gains in new work. The data from IHS Markit showed that the Purchasing Managers' Index rose to 53.6 in June from 52.8 in May. A score above 50 indicates expansion.. Back home, the Information Technology (IT) stocks ended mixed amid Crisil’s report that scaling up and the need to build digital capabilities will lead to faster consolidation among the mid-tier information technology companies in India.

The BSE Sensex ended at 39837.24, up by 20.76 points or 0.05% after trading in a range of 39732.38 and 39934.99. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.11%, while Small cap index was up by 0.26%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 0.68%, Capital Goods up by 0.57%, PSU up by 0.50%, FMCG up by 0.46% and Industrials up by 0.37%, while IT down by 0.97%, TECK down by 0.76%, Consumer Durables down by 0.12%, Utilities down by 0.12% and Auto down by 0.09% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 3.78%, ITC up by 1.30%, Larsen & Toubro up by 0.93%, Asian Paints up by 0.59% and Power Grid up by 0.58%. (Provisional)

On the flip side, Tech Mahindra down by 1.60%, Yes Bank down by 1.19%, Vedanta down by 1.17%, Infosys down by 1.13% and HCL Tech. down by 1.04% were the top losers. (Provisional)

Meanwhile, expressing optimism over India’s growth, Finance Minister Nirmala Sitharaman has said that the country still continues to be the fastest growing economy. She added that the manufacturing sector has had a certain fall, but it is not attributable to demonetisation. She noted that if the United States' growth has grown between 1.6, 2.2, 2.9 and 2.3 per cent in 2016, 2017, 2018 and 2019, and China's growth has also decelerated from 6.7, 6.8, 6.6 and 6.3 per cent, India is still well above 7 per cent at 7.3 per cent growth.

She said economic growth is high on the agenda of the Government and various reforms are being undertaken in many spheres to improve Gross Domestic Product (GDP) growth. The key reforms in Governments new term include expansion to all farmers the cash transfer scheme 'PM-Kisan' providing an income support of Rs 6000 per year, which was earlier limited to farmers with a land holding of less than 2 hectares. Along with this, the Government has launched voluntary pension scheme for small and marginal farmers and small shopkeepers or retail traders.

Sitharaman further said the moderation in growth momentum in 2018-19 is primarily on account of lower growth in ‘Agriculture and allied’, ‘trade, hotel, transport, storage, communication and services related to broadcasting’ and ‘public administration and defence sectors’. Regarding steps taken, the minister said the government has taken several steps in order that more money goes to people and that is why the PM's Kisan Samman Yojna, the Pension Yojna, where money goes directly through DBT into the people's hands, are activities through which people are getting the benefit.

She said over and above that, in order that institutions will have to extend more credit facilities for industry and for those entrepreneurs in the ground, the credit situation and also taking care of resolutional stressed assets through banks is also happening. She further said as per estimates available from Central Statistics Office, Growth of GDP at constant prices was 6.8 percent in 2018-19, as compared to 7.2 percent in 2017-18 and 8.2 percent in 2016-17. Besides, to give focused attention to issues of growth, Government has constituted a five-member cabinet committee on investment and growth chaired by Prime Minister.

The CNX Nifty ended at 11917.10, up by 6.80 points or 0.06% after trading in a range of 11887.05 and 11945.20. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing Finance up by 7.40%, Indusind Bank up by 3.84%, ITC up by 1.28%, Zee Entertainment up by 1.22% and Grasim Industries up by 1.10%. (Provisional)

On the flip side, Eicher Motors down by 2.59%, GAIL India down by 1.94%, Tech Mahindra down by 1.60%, Infosys down by 1.20% and Yes Bank down by 1.19% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 51.15 points or 0.68% to 7,610.34, France’s CAC increased 39.02 points or 0.7% to 5,615.84 and Germany’s DAX increased 92.20 points or 0.74% to 12,618.92.

Asian markets ended lower on Wednesday as lingering worries about trade tensions and slowing global economic growth dented investors' appetite for risk. Underlying sentiment remained cautious ahead of an US holiday on Thursday and the release of US non-farm payrolls data for June on Friday. Chinese shares ended lower after survey data from IHS Markit showed China's private sector expanded marginally in June despite contraction in manufacturing. The Caixin composite output index fell to 50.6 from 51.5 in May, signaling the weakest growth since last October. The services Purchasing Managers' Index dropped more-than-expected to 52.0 in June from 52.7 in the previous month as the U.S.-China trade conflict impacted business confidence rather heavily. The expected reading was 52.6. Further, Japanese shares closed down as a higher yen and losses in Chinese stocks dented sentiment. Meanwhile, Japan's services sector maintained its growth trend in June, driven by output and improved demand, survey data from IHS Markit showed today. The corresponding index rose to 51.9 from 51.7 in May, extending its upward trend into a thirty-third month.