Markets mood remain upbeat on Tuesday

Indian equity indices remained in good mood on Tuesday, with Sensex and Nifty closing above their crucial psychological levels of 39,100 and 11,650, respectively. Markets made a cautious start of the day, as India’s exports fell by 9.71% in the month of June 2019 over the same period in the previous year, due to a fall in shipments of gems and jewellery, engineering goods and petroleum products. However, markets soon staged sharp recovery, taking support with Finance Minister Nirmala Sitharaman’s statement that GST collection of states and union territories (UTs) increased to Rs 5.18 lakh crore in the full financial year 2018-19, up from Rs 2.91 lakh crore collected in nine months of 2017-18.

Key indices extended their gains in the last hour of the trade, tracking firm European markets. The street remained positive with Commerce and Industry Minister Piyush Goyal’s statement that India is open to ideas from all sides to strengthen investors' confidence so that they can invest and participate in the country's development. He added that the government aims to give confidence to international investors, with the best of technologies, to come to India and invest. Some support also came with a private report stating that domestic catalysts suggest a largely positive outlook for the bond market in the short-term, despite the recent correction in Indian bond yields.

On the global front, European markets were trading in green, as Ireland's trade surplus increased in May, as exports rose and imports declined. The figures from the Central Statistics Office showed that the visible trade surplus rose to EUR6.5 billion in May from EUR5.3 billion in April. Exports grew a seasonally adjusted 5.0 percent monthly in May and imports declined 8.0 percent. Asian markets ended mixed, after Indonesia's exports declined more than expected in June. The figures from Statistics Indonesia revealed that exports decreased 8.98 percent year-on-year in June, which was bigger than the forecast of 6.75 percent drop. Meanwhile, imports increased 2.8 percent annually.

Back home, automobile industry stocks ended higher, despite automobile dealers' body Federation of Automobile Dealers Associations (FADA) said that retail sales of passenger vehicles (PV) in June declined by 4.6 per cent to 2,24,755 units as compared to the same period last year, hit by liquidity issues and delayed monsoon. Further, stocks related to gem & jewellery industry remained under pressure, as the Gem & Jewellery Export Promotion Council in its latest data showed that exports of gems & jewellery continued to face headwinds with June shipments plunging 16.26 per cent due to the renewed bout of US-China trade wars.

Finally, the BSE Sensex gained 234.33 points or 0.60% to 39,131.04, while the CNX Nifty was up by 74.25 points or 0.64% to 11,662.60.

The BSE Sensex touched a high and a low of 39,173.89 and 38,845.27, respectively and there were 22 stocks advancing against 09 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.69%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Realty up by 1.98%, Oil & Gas up by 1.66%, Consumer Durables up by 1.62%, Power up by 1.47% and Utilities up by 1.43%, while IT down by 0.38% and TECK down by 0.31% were the only losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 11.48%, Tata Motors up by 5.53%, Tata Motors - DVR up by 4.12%, Sun Pharma up by 2.57% and NTPC up by 2.46%. On the flip side, TCS down by 1.86%, Mahindra & Mahindra down by 1.35%, HCL Tech. down by 0.71%, Kotak Mahindra Bank down by 0.35% and Tech Mahindra down by 0.22% were the top losers.

Meanwhile, the market research firm IHS Markit in its latest India Business Outlook survey has stated that business sentiment in India fell in June 2019 to its lowest level since June 2016, as companies were worried about the sustainability of the economic upturn, water shortages, public policies and regulation. That apart, it said companies are also concerned about potential rupee depreciation pushing prices for imported materials upwards, lack of skilled labour, likely tax hikes, financial difficulties and customers increasingly demanding discounts.

According to the survey, predictions of softer activity growth underpin the downward revisions of profit outlook, subdued hiring plans and relatively muted capital expenditure. It noted that the net balance of private sector companies foreseeing output growth in the year ahead fell from 18 percent in February to 15 percent in June - this matches the data of June 2016, and also October 2009 when aggregate figures became available.

However, the report stated that hopes of pro-business government policies and a better financial flow continue to underpin optimism towards output and profitability growth in the year ahead. On the employment front, it said companies plan to expand capacity by hiring additional workers amid predictions of a pick-up in demand.

The CNX Nifty traded in a range of 11,670.05 and 11,573.95. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 14.00%, Tata Motors up by 5.84%, Adani Ports up by 2.84%, Sun Pharma up by 2.62% and Bajaj Finserv up by 2.39%. On the flip side, TCS down by 1.67%, Mahindra & Mahindra down by 1.32%, HCL Tech down by 0.83%, Kotak Bank down by 0.74% and UPL down by 0.68% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 increased 13.48 points or 0.18% to 7,545.20 and France’s CAC rose 8.65 points or 0.16% to 5,586.86, while Germany’s DAX decreased 4.60 points or 0.04% to 12,382.74.

Asian markets ended mixed on Tuesday as investors awaited earnings results from major US companies as well as key economic data due later this week for direction. Chinese shares ended lower as investors fretted over slower growth in the world's second-largest economy and the impact of the Sino-US trade war, even as new data highlighted Beijing's efforts to boost spending. Japanese shares closed down as traders returned to their desks after a national holiday on Monday. Meanwhile, Seoul shares ended higher as investors awaited cues from the second-quarter earnings results to be released later this month.