Post Session: Quick Review

Dalal Street witnessed a bloodbath in Monday’s trading session, by falling two percentage points, as investors took cautious approach ahead of the Q1 corporate earning session starting this week. Heavy selloff in global equities also hurt sentiment. Markets traded in red since the beginning, as sentiments remain dampened with report that foreign institutional investors (FIIs) sold shares worth Rs 89 crore on a net basis in the cash market, while domestic institutional investors (DIIs) bought shares worth Rs 276 crore. Sentiments remained weak as India Meteorological Department data showed that monsoon has covered almost the entire country, but three-fourths of MeT department’s sub-meteorological divisions still fall under the ‘deficient’ rainfall category.

Markets continued a downward trajectory in the last leg of trade, and traded near day’s low point, as sentiments on the street weakened further with Moody's stating that there are risks of India missing 3.3 percent fiscal deficit target for the current financial year if tax revenue falls short of the projection. The Budget 2019-20 lowered fiscal deficit projection for the current financial year to 3.3 percent from 3.4 percent targeted in the Interim Budget 2019-20 in February. Investors paid no heed towards S&P Global Ratings stating that the proposed Rs 70,000-crore capital infusion into public sector banks (PSBs) will provide a timely booster to these lenders. It said the move, announced in the Budget, is likely to be credit positive for the banking sector and the economy.

On the global front, Asian markets ended lower on Monday, while European markets were trading in red, as hopes of steep cuts in interest rates by the US Federal Reserve faded after the world's largest economy posted better-than-expected jobs data on Friday. Back home, Non-banking finance companies (NBFCs) were in focus with report that quickly acting on a Budget proposal to offer credit guarantee to higher-rated asset pools of financially sound non-banking finance companies, the Reserve Bank on Friday allowed banks to offer additional liquidity against their excess G-secs holdings, with immediate effect. The move will release an additional liquidity worth Rs 1.34 trillion to banks, which can be used for on-lending to shadow banking companies.

The BSE Sensex ended at 38723.94, down by 789.45 points or 2.00% after trading in a range of 38605.48 and 39476.38. There were 3 stocks advancing against 28 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.93%, while Small cap index was down by 2.38%. (Provisional)

The top losing sectoral indices on the BSE were PSU down by 4.01%, Capital Goods down by 3.58%, Realty down by 3.31%, Auto down by 3.13% and Power down by 3.04%, while there were no gainers on the sectoral front on the BSE. (Provisional)

The few gainers on the Sensex were Yes Bank up by 5.84%, HCL Tech up by 2.07% and TCS up by 0.64%. (Provisional)

On the flip side, Bajaj Finance down by 7.26%, ONGC down by 5.24%, NTPC down by 5.17%, Hero MotoCorp down by 5.06% and Maruti Suzuki down by 5.04% were the top losers. (Provisional)

Meanwhile, with an aim to achieve $5 trillion economy in the next few years, Finance Minister Nirmala Sitharaman has expressed the need to make structural reforms. She said the Indian economy, which stood at $1.85 trillion five years back, has reached $2.7 trillion now, and is within capacity to reach $5 trillion in the next few years.

She added that the country need to invest in infrastructure, digital economy and job creation in small and medium enterprises. To boost economy, she said the interim budget had focused on 10-point vision. In the current year, India's economy will grow to become $3 trillion economy, sixth largest in world.

She said that in terms of Purchasing Power Parity (PPP), India has become the third largest economy in the world after the US and China. The minister emphasised the need for structural reforms for achieving $5 trillion economy.

The CNX Nifty ended at 11568.70, down by 242.45 points or 2.05% after trading in a range of 11523.30 and 11771.90. There were 4 stocks advancing against 46 stocks declining on the index. (Provisional)

The few gainers on Nifty were Yes Bank up by 5.84%, HCL Tech up by 2.21%, Bharti Infratel up by 0.59% and TCS up by 0.55%. (Provisional)

On the flip side, Bajaj Finserv down by 9.73%, Bajaj Finance down by 7.91%, Indian Oil Corporation down by 5.42%, ONGC down by 5.39% and Hero MotoCorp down by 5.11% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 11.19 points or 0.15% to 7,541.95, France’s CAC decreased 9.17 points or 0.16% to 5,584.55 and Germany’s DAX was decreased 10.08 points or 0.08% to 12,558.45.

Asian markets ended lower on Monday as strong US jobs data tempered expectations for a near-term interest rate cut by the Federal Reserve. The latest jobs report showed that US nonfarm payrolls jumped 224,000 in June, beating forecasts for 160,000. Geopolitical tensions also dented sentiment after Iran said it will break a limit set on uranium enrichment under its 2015 nuclear accord with major world powers. Chinese shares ended lower despite US-China trade talks resume with phone calls. As officials try to resolve a year-long trade war, Chinese Vice President Wang Qishan warned against ‘protectionism in the name of national security’, and called major powers to make more contributions to global peace and stability. Meanwhile, China's foreign exchange reserves increased marginally in June, data from the People's Bank of China showed. Foreign exchange reserves rose by $18.2 billion to $3.119 trillion at the end of June from $3.101 trillion at the end of May. Further, Japanese shares closed down as Fed rate cuts hopes faded and weak machinery orders data fanned concerns about domestic demand.