Bourses fall hard to settle in red terrain

Key Indian equity benchmarks fell hard on Monday to settle the day in red terrain, with Sensex and Nifty losing around 200 and 100 points, respectively. Key indices started on cautious note, amid reports that overseas investors have pressed the exit button in July and pulled out a net Rs 3,758 crore from the Indian capital markets on account of multiple headwinds, including the super-rich tax announced in Budget 2019-20. Domestic sentiments remained downbeat, as the government admitted that doubling of farm income by 2022 was not possible with the current rate of growth in the agriculture sector and said it was trying to promote allied sectors to achieve the target.

Markets remained lackluster throughout the trading session, impacted with a report stating that midway into earnings season, it is clear that India Inc.’s P&L account remains under pressure. Revenue growth is so sluggish that even a modest increase in costs has not helped companies protect their margins. Market participants overlooked reports stating that India's chief economic advisor to the Union finance minister Krishnamurthy Subramanian exuded confidence in the economy swelling to a $5-trillion giant by 2025, saying the high target is definitely achievable.

On the global front, European markets were trading in red, after Finland's manufacturing sentiment remained stable in July. The data from the Confederation of Finnish Industries showed that the manufacturing sentiment index held steady at -4 in July. Asian markets ended in red as the value of retail sales in Japan was roughly unchanged in June on a seasonally adjusted basis. As per the Ministry of Economy, Trade and Industry, that exceeded expectations for a decline of 0.3 percent following the upwardly revised 0.4 percent gain in May (originally 0.3 percent).

Back home, automobile stocks ended lower, despite the high-powered GST Council decided to reduce the tax rate on electric vehicles (EVs) to 5% from the existing 12%, a move aimed at accelerating the adoption of eco-friendly mobility solutions. The new GST rate on EVs will be effective from August 1. Additionally, the tax rate on chargers or charging stations for EVs has been slashed to 5% from 18%. Airlines stocks remained in watch, as Airports Authority of India Chairman Guruprasad Mohapatra said that the government is set to privatize 20-25 more airports in the next phase.

Finally, the BSE Sensex fell 196.42 points or 0.52% to 37,686.37, while the CNX Nifty was down by 95.10 points or 0.84% to 11,189.20.

The BSE Sensex touched a high and a low of 38,043.22 and 37,519.16, respectively and there were 07 stocks advancing against 24 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index declined 0.67%, while Small cap index was down by 1.03%.

The only gaining sectoral indices on the BSE were IT up by 0.61%, Bankex up by 0.25% and TECK up by 0.08%, while Auto down by 3.55%, Metal down by 3.01%, Telecom down by 2.85%, Basic Materials down by 2.80%, Consumer Disc down by 1.85% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.32%, HCL Tech. up by 1.40%, Indusind Bank up by 1.16%, TCS up by 0.98% and Infosys up by 0.60%. On the flip side, Tata Motors down by 6.52%, Tata Motors - DVR down by 5.86%, Vedanta down by 5.09%, Bajaj Auto down by 4.99% and Maruti Suzuki down by 4.26% were the top losers.

Meanwhile, the Federation of Indian Chambers of Commerce and Industry (FICCI) and Vestian in their report have said that real estate sector got $2.7 billion fund inflows in first half of 2019, despite the continuing slowdown in the sector driven mainly by various regulatory changes. Improvement in infrastructure, roads, and the metro networks coupled with the increased speed of technology implementation can further boost investor interest.

The report mentioned that the momentum of investment in the realty sector between 2015 and 2018 continued in the first half of 2019, with nearly $2.7 billion flowing in. Between 2015 and 2018, fund inflows stood touched $25.7 billion. It further highlighted that one of the major trends observed in the last decade has been the rise in institutional investment in real estate, particularly PE investments that has been a key factor in keeping the market confident about its revival. It added nearly 80 percent of institutional investments are accounted for by PE investors.

With 50% of total investments, commercial assets has seen highest amount of investments. The investment value in the segment was recorded at $14.2 billion during 2015-18, depicting several large-scale deals. This was followed by warehousing and logistics sector. Moreover, it noted that despite occupying the least share, investment into industrial assets, mainly comprising warehousing and logistics sector, has observed considerable interest in 2018 and 2019.

The CNX Nifty traded in a range of 11,310.95 and 11,152.40. There were 07 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 2.90%, Indusind Bank up by 1.13%, HCL Tech. up by 0.96%, TCS up by 0.76% and Infosys up by 0.62%. On the flip side, Indiabulls Housing Finance down by 12.07%, Grasim Industries down by 9.59%, Tata Motors down by 6.35%, Vedanta down by 5.30% and Bharti Infratel down by 5.07% were the top losers.

European markets were trading in red; France’s CAC fell 13.72 points or 0.24% to 5,596.33, Germany’s DAX decreased 18.18 points or 0.15% to 12,401.72 and UK’s FTSE 100 was down by 72.27 points or 0.96% to 7,621.33.

Asian markets ended lower on Monday as caution set in ahead of US-China trade talks set to resume this week and the US Federal Reserve's monetary policy announcement due on Wednesday. Upbeat GDP and earnings numbers from the US helped to limit the downside across the region. Chinese shares ended down as data showed profits earned by China's industrial firms contracted in June after a brief gain the previous month, adding to fears of a slowdown. Industrial profits fell 3.1 percent in June from a year earlier to 601.9 billion yuan ($87.5 billion), according to data released by the National Bureau of Statistics (NBS) on Saturday. Besides, Japanese shares ended lower as investors adopted a cautious approach ahead of the Bank of Japan's policy board meeting and the US FOMC meeting. Moreover, Seoul shares fell for a fourth day to hit a two-month low amid growing uncertainties, such as a trade row with Japan and the US-China trade war. Japan will decide on August 2 to remove South Korea from its list of countries that enjoy preferential treatment in trade, potentially affecting some 1,000 industrial items.