Markets cheer economic survey

Indian equity benchmarks cheered the economic survey on Thursday, with Sensex and Nifty closing higher by 69 and 30 points, respectively. After a firm start, key indices remained positive for the whole day, with Steel Minister Dharmendra Pradhan’s statement that ‘we are working on a mission mode to build India into a $5 trillion economy as envisioned by Prime Minister Narendra Modi.’ Adding more comfort among market participants, Commerce & Industry Minister Piyush Goyal said that India will get additional $217 million of revenue from the retaliatory tariffs it imposed on 28 American products.

Despite some volatility, markets managed to hold their gains, as the economic survey predicated 7% Gross Domestic Product (GDP) growth for FY20 on stable macro-economic conditions. Traders 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.

On the global front, European markets were trading in green, despite Hungary retail sales growth slowed to the weakest level in twenty-seven months in May. The data from the Hungarian Central Statistical Office showed that retail sales rose 2.6 percent year-on-year in May, which was slower than 7.3 percent in April. Asian markets ended mixed after Hong Kong's private sector contracted further in June, with declines in business activity and export orders from mainland. As per survey data from IHS Markit, the Purchasing Manager's Index rose to 47.9 in June from 46.9 in May.

Back home, banking stocks ended higher, after the Economic Survey 2018-19 said that 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. Further, agriculture industry stocks remained in focus, as Union Cabinet gave 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.

Finally, the BSE Sensex gained 68.81 points or 0.17% to 39,908.06, while the CNX Nifty was up by 30.00 points or 0.25% to 11,946.75.

The BSE Sensex touched a high and a low of 39,979.10 and 39,858.33, respectively and there were 21 stocks advancing against 10 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index lost 0.19%, while Small cap index was up by 0.12%.

The top gaining sectoral indices on the BSE were Telecom up by 1.53%, Realty up by 0.88%, Basic Materials up by 0.50%, Auto up by 0.37% and FMCG up by 0.37%, while Consumer Durables down by 1.58%, Metal down by 1.12%, Healthcare down by 0.37%, Consumer Disc down by 0.07% and Capital Goods down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.53%, Tata Motors up by 1.76%, Indusind Bank up by 1.61%, Kotak Mahindra Bank up by 1.45% and Tata Motors - DVR up by 0.69%. On the flip side, Yes Bank down by 3.56%, Tata Steel down by 2.97%, HCL Tech down by 1.15%, Vedanta down by 1.04% and Sun Pharma down by 0.90% were the top losers.

Meanwhile, Niti Aayog Special Secretary Yaduvendra Mathur has said that telecom operators should be financially sound to build up infrastructure. He also highlighted a need to review the auction architecture as they cannot pay high prices for spectrum. He added that the government wants access to real time data in decision making which can be done by installing internet of things (IoT) devices supported by public wi-fi.

Mathur has stated that telecom players should set up public wi-fi but for that they also need to be financially healthy. He also noted that the government is working on next round of spectrum auction that will comprise radiowaves for 5G services as well. He added that Telecom Regulatory Authority of India (Trai) has recommended the auction of about 8,644 MHz of frequencies across eight signal bands, including in 700 Mhz, 800 Mhz, 3.3-3.4 gigahertz (Ghz), 3.4-3.6 Ghz etc, at an estimated base price of Rs 4.9 lakh crore.

Mathur said 'I think it is a broader issue which is being looked at on how to maximise utilisation rather than only look at through revenue perspective. Growth is the message that we have from the top.' He noted the government keeps pushing for use of state-of-art technology in the government and those who do not use such technology are required to give an explanation. 

The CNX Nifty traded in a range of 11,969.25 and 11,923.65. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were UPL up by 6.87%, Bharti Airtel up by 2.52%, Britannia up by 1.91%, Tata Motors up by 1.76and Ultratech Cement up by 1.71%. On the flip side, Yes Bank down by 3.06%, Titan down by 2.90%, Zee Entertainment down by 1.26%, JSW Steel down by 1.19% and HCL Tech down by 1.11% were the top losers.

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.