Post Session: Quick Review

Indian equity benchmarks traded with volatility, but in green terrain, throughout the day and ended with marginal gains on the back of buying by participants. This was the third consecutive day of rise for the domestic markets. Markets made a slightly positive start as traders took some support with Finance Minister Nirmala Sitharaman’s statement that total bad loans of commercial banks declined by Rs 1.02 lakh crore to Rs 9.34 lakh crore in the 2018-19 fiscal on the back of steps taken by the government. The government has instituted a comprehensive 4R’s strategy for recognition of non-performing assets (NPAs) transparently, resolution and recovery of value from stressed assets, recapitalising of public sector banks (PSBs) and reforms in PSBs so as to reduce their bad loans. Key indices added some more gains in late morning trade, taking support from Trump's administration stating that there is an “enormous potential” for growth in the India-United States (US) relationship. They also exuded confidence that the ongoing trade issues could be worked through because of the friendship between the two nations. However, upside in equity benchmarks was capped as some anxiety spread among traders with Chief Economic Advisor K V Subramanian’s statement that there is a need to tap foreign capital to accelerate growth from the current level of 7 per cent to 8 per cent. He added that achieving $5-trillion economy by 2024-25 is possible although the goal is slightly stretched.

On the global front, Asian markets ended mostly lower on Wednesday after US markets fell from a record high overnight on the back of mixed earnings reports and President Donald Trump's latest comments about the ongoing US-China trade war. European markets were trading mostly in green. Back home, the retail sector stocks were in focus with Commerce and industry minister Piyush Goyal’s statement that India’s foreign direct investment (FDI) norms in the multi-brand retail sector are a very well thought out policy which are unlikely to change any time soon. Solar stocks were buzzing on report that a total of 80.46 GW of renewable energy capacity has been installed in the country as on June 30, 2019 which includes 29.55 GW from Solar & 36.37 GW from Wind power.

The BSE Sensex ended at 39218.35, up by 87.31 points or 0.22% after trading in a range of 39081.14 and 39284.73. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.18%, while Small cap index down by 0.09%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 0.81%, TECK up by 0.75%, FMCG up by 0.72%, Bankex up by 0.58% and Basic Materials up by 0.41%, while Auto down by 1.04%, Oil & Gas down by 0.78%, Energy down by 0.78%, Utilities down by 0.74% and Power down by 0.62% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 2.43%, Indusind Bank up by 2.23%, Tech Mahindra up by 2.18%, HCL Tech. up by 2.05% and Kotak Mahindra Bank up by 1.79%. (Provisional)

On the flip side, Yes Bank down by 5.10%, Maruti Suzuki down by 1.69%, NTPC down by 1.68%, ONGC down by 1.64% and Bajaj Auto down by 1.33% were the top losers. (Provisional)

Meanwhile, in order to accelerate growth to 8 percent, Economic Adviser (CEA) Krishnamurthy Subramanian has said that India needs to encourage foreign capital.  He mentioned that apart from sovereign bond issue, India also needs to be tapping into foreign capital to trigger this virtuous cycle. Once this virtuous cycle is triggered, then other parts start moving, then the country get investment with enhanced productivity, exports and jobs, which leads to demand and thereby creates investment again. It is this triggering which is actually important. In budget, the Finance Minister announced that India would issue sovereign bonds in the global market in foreign currencies.

Although, Subramanian stated that the goal is a bit of a stretch, achieving $5 trillion economy by 2024-25 is possible. The Indian economy reached to the level of $1 trillion in 55 years and added $1 million in last 5 years to $2.75 trillion by March 2019.

Besides, talking about bank mergers, he said that mergers are being done based on synergies and the policy on it is to exploit the economies of scale. He added ‘That's the intent behind the merger. Rather than any top down strategy or mandate which says we need to have four banks, this should be based on looking at banks that might combine very well because of synergies.’

The CNX Nifty ended at 11686.25, up by 23.65 points or 0.20% after trading in a range of 11651.15 and 11706.65. There were 21 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing Finance up by 2.91%, Zee Entertainment up by 2.53%, UPL up by 2.51%, Hindalco up by 2.41% and SBI up by 2.37%. (Provisional)

On the flip side, Yes Bank down by 5.30%, Eicher Motors down by 3.05%, GAIL India down by 2.75%, ONGC down by 1.61% and Maruti Suzuki down by 1.60% were the top losers. (Provisional)

European markets were trading mostly in green; France’s CAC increased 5.87 points or 0.1% to 5,620.25 and Germany’s DAX increased 14.31 points or 0.12% to 12,445.28, while UK’s FTSE 100 decreased 1.86 points or 0.02% to 7,575.34.

Asian markets ended mostly lower on Wednesday after US markets fell from a record high overnight on the back of mixed earnings reports and President Donald Trump's latest comments about the ongoing US-China trade war. Trump threatened to impose tariffs on another $325 billion worth of Chinese goods, saying the US still has a long way to go to conclude a trade deal with China. Chinese shares ended lower in thin trade on worries over slowing growth and the impact of the Sino-US trade dispute. Besides, Japanese shares closed down as tech stocks followed their US peers lower, offsetting gains in the financial sector. Furthermore, Seoul shares declined sharply as Trump's comments on trade talks with China dashed hopes of a deal anytime soon.