Bourses gain for third straight session; Sensex rises around 85 points

Indian equity bourses gained for the third straight session and ended the trading session in green terrain on Wednesday. Markets started on cautious note but soon gained momentum, after the Trump administration said that there is an enormous potential for growth in the India-US relationship, exuding confidence that the ongoing trade negotiations could be worked through because of the friendship between the two nations. Adding more comfort, Indian Ambassador to the US, Harsh Vardhan Shringla also said that it is in the mutual interest of India and the US to have a smooth trading relationship and they can find ways to deal with some of the minor speed bumps.

Key indices managed to hold their heads in green territory during the whole day, despite mixed cues from global markets. The street remained positive 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. However, gains remain capped on the back of 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, European markets were trading mixed, as Germany's economic confidence weakened to a nine-month low in July. The survey data from the ZEW-Leibniz Centre for European Economic Research showed that the economic confidence index declined to -24.5 in July from -21.1 in June. This was the lowest score since October 2018. Asian markets  ended in red terrain, after Singapore's exports declined sharply at a faster-than-expected pace in June as trade disputes weighed heavily on both electronics and non-electronics shipments. Non-oil domestic exports declined 17.3 percent year-on-year in June, after decreasing 16.3 percent in May.

Back home, auto industry stocks ended lower, as the data report from the Ministry of Heavy Industries & Public Enterprises showed that auto industry witnessed sluggish rate of sales during January-June 2019. During the period of January-June 2019, 12.04 million vehicles were sold. A net decline of 10.08% was registered in the rate of automobile sale in the last two quarters. Besides, telecom stocks remained in watch, after the Department of Telecom (DoT) signed a MoU with the Indian Council for Research on International Economic Relations (ICRIER), to develop a Broadband Readiness Index (BRI) for Indian States and Union Territories.

Finally, the BSE Sensex gained 84.60 points or 0.22% to 39,215.64, while the CNX Nifty was up by 24.90 points or 0.21% to 11,687.50.

The BSE Sensex touched a high and a low of 39,284.73 and 39,081.14, respectively and there were 15 stocks advancing against 16 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index lost 0.15%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were IT up by 0.86%, TECK up by 0.77%, FMCG up by 0.70%, Bankex up by 0.52% and Basic Materials up by 0.43%, while Auto down by 1.01%, Utilities down by 0.81%, Oil & Gas down by 0.74%, Energy down by 0.73% and Telecom down by 0.72% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 2.31%, SBI up by 2.17%, HCL Tech. up by 2.06%, Kotak Mahindra Bank up by 2.02% and Indusind Bank up by 1.85%. On the flip side, Yes Bank down by 5.25%, ONGC down by 1.64%, Maruti Suzuki down by 1.38%, Bajaj Auto down by 1.36% and NTPC down by 1.30% were the top losers.

Meanwhile, the Commerce and industry minister Piyush Goyal has said that India's foreign direct investment (FDI) norms in the multi-brand retail sector are a very well thought out policy which is unlikely to change any time soon. He also said that 49 percent FDI threshold in multi-brand retail must be respected in letter and spirit by all foreign brands.

The minister said ‘It is a very well thought out policy, recognising that the strength of Indian small retailers to serve the people of India across the length and breadth of the country is very deeply rooted in the culture of the villages of India. So, for the present, we would not like to change that.’ He also said ‘I think companies which want to come into India will have to look at restricting the foreign ownership to 49 percent if they are looking at multi-brand retail. And we would like them to ensure that in letter and in spirit.’

However, Goyal highlighted the government has planned significant concessions and liberalisation for the single-brand retail sector so that more international companies can set up stores in India and expand their business.  He noted that they can also meet their requirements of 30 percent domestic sourcing through their export requirements and integrate their global chains so that it is a win-win both for India and the single brand retailer coming into the country.

The CNX Nifty traded in a range of 11,706.65 and 11,651.15. There were 21 stocks advancing against 27 stocks declining, while 2 stocks remain unchanged on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 2.75%, ZEEL up by 2.60%, UPL up by 2.51%, Hindalco up by 2.41% and SBI up by 2.37%. On the flip side, Yes Bank down by 5.25%, Eicher Motors down by 2.95%, GAIL India down by 2.75%, Maruti Suzuki down by 1.61% and ONGC down by 1.51% were the top losers.

European markets were trading mixed; 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.