Post Session: Quick Review

Indian equity Markets traded with volatility for whole trading session and somehow managed to end in green terrain on Thursday, as the economic survey predicated 7% Gross Domestic Product (GDP) growth for FY20 on stable macro-economic conditions. Traders took some encouragement with commerce & industry minister Piyush Goyal’s statement that India will get additional $217 million of revenue from the retaliatory tariffs it imposed on 28 American products. Some support also came as the Union Cabinet approved the Code on Wages Bill which seeks to subsume existing laws related to workers remuneration and enable the Centre to fix minimum wages for the entire country. The Code on Wages is one of the four codes that would subsume 44 labour laws with certain amendments to improve the ease of doing business and attract investment for spurring growth.

Sentiments also remained positive with the United Nations Conference on Trade and Development’s (UNCTAD) annual World Investment Report (WIR), which found that Foreign Direct Investment (FDI) into Bahrain and India rose to $1.5 billion and $42 billion respectively in 2018. India's $42 billion also represented a 6% rise from the previous year, as well as the largest share of South Asia's $54 billion total. Although, indices gave up most of their gains in dying hour of trade as anxiety remained amongst the traders with a private report stated that the Indian companies supplying US-made technology components to Chinese telecom firm Huawei Technologies may face penalties under US regulations. Some cautiousness also crept in ahead of the Union Budget, set to be placed on Friday by Finance Minister Nirmala Sitharaman. 

On the global front, Asian markets ended mixed on Thursday on a slew of weak US data on private sector job growth, trade balance and service sector growth reinforced expectations for a near-term interest rate cut by the Federal Reserve. European markets were trading in green. Back home, agriculture stocks were in focus with the Union Cabinet giving its nod to hike the minimum support price (MSP) for kharif crops. MSP of paddy increased by Rs 65 per quintal, Jowar by Rs 120 per quintal and Ragi by Rs 253 per quintal. Banking stocks were buzzing after the Economic Survey 2018-19 said the performance of banking sector has improved as bad loans declined in the last fiscal, but financial flows are constrained due to fall in money raised from capital markets and stress in the non-banking financial sector.

The BSE Sensex ended at 39882.98, up by 43.73 points or 0.11% after trading in a range of 39858.33 and 39979.10. There were 18 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in mixed; the BSE Mid cap index fell 0.27%, while Small cap index was up by 0.08%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 1.44%, Realty up by 0.79%, Basic Materials up by 0.41%, FMCG up by 0.36% and Oil & Gas up by 0.28%, while Consumer Durables down by 1.64%, Metal down by 1.25%, Healthcare down by 0.35%, Utilities down by 0.16%, Consumer Discretionary Goods & Services down by 0.13% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 2.35%, Indusind Bank up by 1.62%, Kotak Mahindra Bank up by 1.45%, Tata Motors up by 1.45% and Hero MotoCorp up by 0.67%. (Provisional)

On the flip side, Yes Bank down by 3.46%, Tata Steel down by 3.21%, Vedanta down by 1.33%, HCL Tech. down by 1.15% and Sun Pharma down by 0.95% were the top losers. (Provisional)

Meanwhile, with an aim to strengthen the corporate governance framework of core investment companies (CICs), the Reserve Bank of India (RBI) has constituted a six-member working group that will review the regulatory and supervisory framework for CICs. The working group is to be headed by Tapan Ray, non-executive chairman, Central Bank of India and former secretary, Ministry of Corporate Affairs. It added that the working group shall submit its report by October 31, 2019.

The terms of reference of the working group include examination of the current regulatory framework for CICs in terms of adequacy, efficacy and effectiveness of every component thereof and suggest changes therein. It will also assess the appropriateness of and suggest changes to the current approach of RBI towards registration of CICs including the practice of multiple CICs being allowed within a group. The working group will also suggest measures to strengthen corporate governance and disclosure requirements for CICs; assess the adequacy of supervisory returns submitted by CICs; and suggest appropriate measures to enhance RBI’s off-sight surveillance and on-site supervision over CICs.

In August 2010, RBI had introduced a separate framework for the regulation of systemically important CICs, recognising the difference in the business model of a holding company relative to other non-banking financial companies. Over the years, corporate group structures have become more complex involving multiple layering and leveraging, which has led to greater inter-connectedness with the financial system through their access to public funds.

The CNX Nifty ended at 11939.50, up by 22.75 points or 0.19% after trading in a range of 11923.65 and 11969.25. There were 31 stocks advancing against 18 stocks declining on the index. (Provisional)

The top gainers on Nifty were UPL up by 6.69%, Bharti Airtel up by 2.45%, Ultratech Cement up by 1.84%, Britannia Industries up by 1.80% and Indusind Bank up by 1.63%. (Provisional)

On the flip side, Yes Bank down by 3.41%, Tata Steel down by 3.20%, Titan Co down by 2.99%, Vedanta down by 1.42% and Zee Entertainment down by 1.15% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 10.07 points or 0.13% to 7,619.39, France’s CAC rose 1.96 points or 0.03% to 5,620.77 and Germany’s DAX was up by 11.36 points or 0.09% to 12,627.60.

Asian markets ended mixed on Thursday on a slew of weak US data on private sector job growth, trade balance and service sector growth reinforced expectations for a near-term interest rate cut by the Federal Reserve. Hong Kong shares finished down after a survey showed Hong Kong's private sector contracted further in June, with declines in business activity and export orders from mainland. Meanwhile, Seoul shares closed higher as Finance Minister Hong Nam-ki warned of possible countermeasures against Japan if it keeps restrictions on exports of high-tech materials to its companies for a long time. Japanese shares ended up even as the dollar slipped against the yen on Fed rate cut hopes.