Bourses close Monday’s trading session on higher note

Indian equity benchmarks closed the Monday’s trading session on higher note. After a positive start of the day, key indices remained in green for the most part of the session, aided by Finance Minister Nirmala Sitharaman’s statement that the government has succeeded in keeping ‘complete control’ over retail inflation. The government has achieved success in not allowing inflation to raise its ‘dirty’ head to cause inconvenience to the consumers. Some comfort also came with the Reserve Bank’s report that the forex kitty continued to surge for the fourth successive week to scale a new lifetime high of $429.911 billion, after a heavy increase in the value of gold and currency assets during the week to July 5.

However, volatility witnessed in the markets during the day, as India’s industrial production measured by Index of Industrial Production (IIP), which gauges production in the industrial sector for a given period of time, slipped to 3.1% in May 2019, as compared to 3.8% growth in May 2018. But, reports of easing WPI inflation helped the indices to end in green terrain. India’s Wholesale price index (WPI) inflation eased further for the third straight month in the month of June, driven down by decline in prices of fuel. According to the latest data released by the government, WPI slowed down to 2.02% in June from 2.45% in May and 5.68% during the corresponding month of the previous year.

On the global front, European markets were trading in red, as the Bank of Italy projected that Italy's economic growth is set to slow to 0.1 percent this year from 0.7 percent in 2018. The economy grew 0.1 percent in the first quarter after contracting 0.1 percent in the final three months of 2018. Asian markets ended in green, after China's gross domestic product expended a seasonally adjusted 1.6 percent on quarter in the second quarter of 2019, beating expectations for an increase of 1.5 percent and was up from 1.4 percent in Q1. On an annualized yearly basis, GDP climbed 6.2 percent - matching forecasts and down from 6.4 percent in the three months prior.

Back home, the aviation industry stocks remained in focus, after credit rating agency, Moody's Investors Service said that sustained growth in air passenger traffic across the Asia Pacific will boost revenue for airports but also raise pressure on the infrastructure. Further, stocks related to the insurance intermediaries also remained in limelight, with credit rating agency, Fitch Ratings’ latest report stating that the Budget proposal of relaxing foreign investment limit in insurance intermediaries will strengthen distribution capabilities and increase international involvement, particularly from developed markets.

Finally, the BSE Sensex gained 160.48 points or 0.41% to 38,896.71, while the CNX Nifty was up by 35.85 points or 0.31% to 11,588.35.

The BSE Sensex touched a high and a low of 39,023.97 and 38,696.60, respectively and there were 15 stocks advancing against 16 stocks declining on the index.

The broader indices ended in in red; the BSE Mid cap index fell 0.61%, while Small cap index was down by 0.63%.

The top gaining sectoral indices on the BSE were IT up by 3.53%, TECK up by 2.96%, Healthcare up by 0.69%, Basic Materials up by 0.35% and Auto up by 0.29%, while Capital Goods down by 1.46%, Industrials down by 0.99%, Telecom down by 0.96%, Consumer Durables down by 0.94% and FMCG down by 0.87% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 7.20%, Sun Pharma up by 3.61%, Maruti Suzuki up by 1.81%, TCS up by 1.77% and Tech Mahindra up by 1.73%. On the flip side, Indusind Bank down by 2.38%, Larsen & Toubro down by 1.84%, ITC down by 1.47%, Bharti Airtel down by 1.35% and ICICI Bank down by 1.09% were the top losers.

Meanwhile, in a bid to deal with ongoing stress in Non-Banking Financial Company (NBFC) sector, guidelines will be issued soon for Public sector Undertakings (PSUs) to take over pooled assets of NBFCs. To enhance liquidity access for the sector, the government will provide one-time 6-month partial guarantee of Rs 1 lakh crore to state-run banks for purchasing consolidated high-rated pooled assets of financially-sound NBFCs. This will cover their first loss of up to 10 percent.

The banks would be allowed to pick up primarily 'AAA' rated assets where chances of delinquency is the lowest and big state-owned banks will be allowed to participate in this. It will help raise the balance sheet size of the participating banks and provide better-run NBFCs access to liquidity. Most of the assets will be not of maturity over three years. Banks, which themselves are in stress, will be kept out of this.

The government will allow NBFCs to raise funds in public issues, and the requirement of creating a debenture redemption reserve (DRR), which is currently applicable for only public issues as private placements are exempt, will be done away with. In a bid to improve regulatory oversight, the government also proposed to bring housing finance companies under the RBI from the fold of National Housing Bank. These steps are aimed at improving the condition of the NBFC sector as a whole. 
The CNX Nifty traded in a range of 11,618.40 and 11,532.30. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Infosys up by 7.24%, Sun Pharma up by 3.12%, UPL up by 2.85%, Tech Mahindra up by 2.07% and Maruti Suzuki up by 1.82%. On the flip side, Indiabulls Housing Finance down by 4.35%, Indusind Bank down by 2.39%, Larsen & Toubro down by 1.83%, Bharti Airtel down by 1.43% and YES Bank down by 1.43% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 11.09 points or 0.15% to 7,494.88, France’s CAC fell 13.92 points or 0.25% to 5,558.94 and Germany’s DAX was down by 2.73 points or 0.02% to 12,320.59.

Asian markets ended mostly higher on Monday with Chinese shares after reports that the US may start approving licenses to certain companies to start selling specific Chinese company's Huawei products in the upcoming two or three weeks, despite official data showed China's GDP growth slowed to 6.2 percent in the second quarter from a year earlier, its weakest pace in at least 27 years amid a prolonged trade war with the United States. Meanwhile, June factory output and retail sales figures offered signs of improvement. Annual growth in industrial production advanced more-than-expected to 6.3 percent from 5 percent in May, showing the fastest growth in three months. Likewise, retail sales grew at a faster pace of 9.8 percent after rising 8.6 percent a month ago, against forecast of an 8.5 percent increase for June. Year-to-date fixed asset investment increased 5.8 percent compared to 5.6 percent expansion in January to May period while property investment logged a double-digit growth of 10.9 percent during January to June period. The Japanese market was closed for the Marine Day holiday.