Post Session: Quick Review

Benchmark indices ended lower for the fourth consecutive day on Tuesday as they remained volatile throughout the day with Nifty failed to hold above 11,350 level. Markets made cautious start and traded marginally lower, on the back of lackluster earnings from large cap companies and weak monsoon. Traders took note of report that the Economic Advisory Council to the Prime Minister (EAC-PM) member Rathin Roy has urged the government to issue a white paper on medium-term fiscal framework, arguing that it would be difficult to meet the budgetary tax collection target for 2019-20. He also expressed his reservations over the government’s decision to start raising a part of its gross borrowing programme from external markets in foreign currencies.

However, markets reversed early weakness to trade in positive range, as traders took support with a report that the government has set a target of adding 1.3 crore income tax filers in the current financial year against 1.1 crore new filers last year. Key bourses added more gains and traded near intraday high levels as sentiments on the street improved further with Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Ramesh Abhishek stating that India is hopeful of further improving its ranking in an index of the world's most innovative economies from the current 57th. Though, markets were unable to hold on to the gains and ended with minor cut as some anxiety remained among the investors with outgoing Reserve Bank of India Deputy Governor Viral Acharya’s statement that an increase in government borrowing runs the risk of flooding the debt market, and puts upward pressure on interest rates, making it more expensive for companies to borrow.

On the global front, Asian markets ended mostly higher on Tuesday, while European markets were trading in green amid bets that the European Central Bank and the US Federal Reserve will ease their monetary policy to support economic growth. Back home, stocks related to power sector were in focus with the report that the power ministry is considering a proposal to allow all generation companies (gencos) flexibility to supply electricity from any plant in their stable, a move that will reduce the cost of power for cash-strapped distribution companies (discoms) and ease the pressure to raise consumer tariffs.

The BSE Sensex ended at 37986.09, down by 45.04 points or 0.12% after trading in a range of 37898.90 and 38217.81. There were 16 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index fell 0.59%, while Small cap index was up by 0.45%.(Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 1.36%, FMCG up by 1.20%, Power up by 1.10%, Consumer Durables up by 0.97% and Realty up by 0.74%, while PSU down by 0.80%, Auto down by 0.75%, Energy down by 0.50%, Metal down by 0.33% and Healthcare down by 0.33% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Power Grid up by 3.04%, Kotak Mahindra Bank up by 2.89%, ITC up by 2.42%, Hero MotoCorp up by 2.09% and NTPC up by 1.56%. (Provisional)

On the flip side, SBI down by 2.67%, HDFC down by 2.22%, Bajaj Auto down by 1.60%, HDFC Bank down by 1.41% and ONGC down by 1.30% were the top losers. (Provisional)

Meanwhile, after posting growth for the previous four months, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) has slipped to Rs 81,913 crore at June-end. In the previous four months, cumulative investment of Rs 73,428 crore was made till the end of February, Rs 78,110 crore till March-end, Rs 81,220 crore till April-end and Rs 82,619 till May-end.

According to the latest data from the Securities and Exchange Board of India (SEBI), the total value of P-note investments in the Indian markets - equity, debt, and derivatives - fell to Rs 81,913 crore at June-end. Of the total investments made till the end of June, Rs 56,664 crore was invested in the equities segment, Rs 24,428 crore in debt and Rs 821 crore in the derivatives market. There is a decline of 0.85% in the total value of P-notes investment from the previous month when the total investment stood at Rs 82,619 crore.

P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly after going through a due diligence process. In July 2017, SEBI had notified stricter norms stipulating a fee of $1,000 on each instrument to check any misuse for channelising black money. It had also prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those that are used for hedging purposes.

The CNX Nifty ended at 11331.70, down by 14.50 points or 0.13% after trading in a range of 11302.80 and 11398.15. There were 23 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Power Grid up by 2.89%, Kotak Mahindra Bank up by 2.76%, ITC up by 2.44%, Hero MotoCorp up by 2.08% and NTPC up by 1.68%. (Provisional)

On the flip side, SBI down by 2.58%, Indiabulls Housing Finance down by 2.46%, HDFC down by 2.24%, Adani Ports &SEZ down by 1.77% and Bajaj Auto down by 1.67% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 42.94 points or 0.57% to 7,557.87, France’s CAC increased 27.28 points or 0.49% to 5,594.30 and Germany’s DAX increased 143.71 points or 1.17% to 12,433.11.

Asian markets ended mostly higher on Tuesday amid bets that the European Central Bank and the US Federal Reserve will ease their monetary policy to support economic growth. Chinese shares ended higher after the South China Morning Post newspaper reported that a few US officials were planning to visit China next week to resume trade talks. Further, Japanese shares closed up following gains on Wall Street overnight, with focus now shifting to corporate earnings announcements and series of macroeconomic data and events this week.