Post Session: Quick Review

Indian equity markets ended the volatile day on flat note with Nifty finishing the July F&O series below 11,300 mark. Benchmarks made positive start as traders remain energized with Revenue Secretary Ajay Bhushan Pandey’s statement that the revised direct tax target of Rs 13.35 lakh crore is realistic and achievable with the help of economic growth and exchange of data amongst various agencies and wings of the government. The markets took support with Finance minister Nirmala Sitharaman’s statement that the direct tax collection target for the current fiscal is ‘eminently achievable’ given that the mop-up has nearly doubled in the last five years. Market-men also took encouragement from a report that India’s GDP is expected to grow at 6.8 per cent in FY20, making it a second straight year of sub-7% expansion. In FY19 too, the economy grew at a rate of 7%.

However, markets lost their early gains and turned volatile in afternoon session as traders turned cautious with the India Meteorological Department (IMD), raising concerns over the output of summer-sown crops, said that monsoon rains were 35% below average in the week ending on July 24, with little rainfall over the central, western and northern parts of the country. But, losses remained capped with a private report that the Reserve Bank of India is set to cut interest rates in August for the fourth meeting in a row, a majority of whom said risks to their already-modest growth forecasts were skewed more to the downside. Besides, the Government introduced the Insolvency and Bankruptcy Code (Amendment) Bill 2019 that seeks to ensure timely completion of debt resolution process and provide more clarity on rights of stakeholders.

On the global front, Asian markets ended mostly in green, as sentiments emerged over next week's US-China trade meeting. Donald Trump's Trade Representative Robert Lighthizer will lead a delegation to China next week. European markets were trading in green; amid bets the European Central Bank will ease its monetary policy further later today amid rising global uncertainties.

The BSE Sensex ended at 37842.42, down by 5.23 points or 0.01% after trading in a range of 37775.51 and 38169.87. There were 16 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index gained 0.61%, while Small cap index was down by 0.09%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.73%, TECK up by 0.68%, IT up by 0.66%, BANKEX up by 0.45% and Realty was up by 0.38%, while Energy down by 1.84%, Oil & Gas down by 1.20%, Metal down by 0.65%, PSU down by 0.55% and Industrials was down by 0.54% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Vedanta up by 3.73%, Sun Pharma up by 2.96%, IndusInd Bank up by 2.28%, Power Grid up by 1.95% and Axis Bank up by 1.90%. (Provisional)

On the flip side, Tata Motors down by 4.63%, Bajaj Finance down by 4.09%, Tata Motors - DVR down by 3.19%, Reliance Industries down by 2.05% and Yes Bank down by 1.74% were the top losers. (Provisional)

Meanwhile, the Economic Advisory Council to the Prime Minister (EAC-PM) in its report titled 'R&D Expenditure Ecosystem' has said that the growth in Research and development (R&D) expenditure should be commensurate with the country’s Gross domestic product (GDP) growth and should be targeted to reach at least 2 percent of GDP by the year 2022. It noted that the line ministries at the Centre could be mandated to allocate certain percentage of their budget for research and innovation for developing and deploying technologies as per the priorities of the respective ministries.

The report has pointed out that India's spending on R&D in terms of percentage of GDP has remained stagnant over the last two decades. It has remained constant at around 0.6 percent to 0.7 percent of GDP and this is well below that in major nations such as the US (2.8), China (2.1), Israel (4.3) and Korea (4.2). To ensure that India leaps into a leadership role in innovation and industrial R&D by stimulating private sector's investment in R&D from current 0.35 percent of GDP, it suggested that a minimum percentage of turn-over of the company may be invested in R&D by medium and large enterprises registered in India.

EAC-PM also recommended that to help and keep the industry enthused to invest in R&D, there is case for not enforcing the complete withdrawal of weighted deduction provisions on R&D investment by April 1, 2020. Noting that government expenditure on R&D is undertaken almost entirely by the central government, it said there is a need for greater participation of state government and private sector in overall R&D spending. Besides, it pitched for creating 30 dedicated R&D Exports Hub and a corpus of Rs 5,000 crore for funding mega projects with cross cutting themes which are of national interest.

The CNX Nifty ended at 11260.90, down by 10.40 points or 0.09% after trading in a range of 11239.35 and 11361.40. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Vedanta up by 4.36%, Cipla up by 3.50%, Zee Entertainment up by 3.42%, Sun Pharma up by 3.09% and IndusInd Bank was up by 2.28%. (Provisional)

On the flip side, Tata Motors down by 4.43%, Bajaj Finance down by 4.05%, Bajaj Finserv down by 3.98%, Coal India down by 3.25% and BPCL was down by 2.64% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 18.79 points or 0.25% to 7,520.25, France’s CAC increased 30.35 points or 0.54% to 5,636.22 and Germany’s DAX increased 7.07 points or 0.06% to 12,529.96.

Asian markets ended mostly higher on Thursday as disappointing manufacturing activity surveys from Europe and the United States helped reinforce expectations of a shift toward easier monetary policy by major central banks, including the European Central Bank and the Federal Reserve. Rising tensions between Tokyo and Seoul and news that North Korea fired two short-range missiles from its east coast into the sea served to cap the upside to some extent. Chinese shares ended higher as investors braced for the first high-level, face-to-face trade negotiations between top US and Chinese negotiators next week. Further, Japanese stocks closed up in line with record highs on Wall Street overnight on the back of encouraging earnings reports and on expectations of easy monetary policy. Though, Seoul shares ended lower as downbeat corporate earnings and escalating trade tensions with Japan overshadowed data showing that South Korea's economy swung back to growth in the second quarter.