Bourses end higher in volatile session

Indian equity bourses managed to close in green terrain on Wednesday after a volatile session.  The start of the day was negative, amid reports that the bilateral relationship between India and the US, which has continuously experienced an upward trajectory for the last two decades, faces the risk of a downward spiral unless urgent steps are taken by both the countries to resolve their trade differences. Adding more worries, a private report stated that despite the policymakers' efforts to revive the sagging growth momentum, the economy is set to print in a 5.7 percent uptick in the June quarter and is likely to bottom out from there. It noted that India presents a picture of short-term despair and medium term hope.

In the last leg of trade, indices staged recovery to end higher, aided by reports that India received the foreign direct investments (FDI) inflow of $64.37 billion during the financial year 2018-19 (FY19). As per the Annual Report 2018-19 of the Department for Promotion of Industry and Internal Trade (DPIIT), FDI worth $286 billion were received in the country in past five years. The street also got comfort as Minister of Petroleum and Natural Gas & Steel Dharmendra Pradhan launched Atal Community Innovation Centre (ACIC) in New Delhi, to encourage the spirit of innovation at the community level. This initiative aims to encourage the spirit of innovation through solution-driven design thinking to serve society.

On the global front, European markets were trading in green, as France's headline consumer prices inflation slowed in July, defying expectations for stability, while the EU measure of price growth eased less-than-expected. The flash data from the statistical office INSEE showed that the flash consumer price index rose 1.1 percent year-on-year following a 1.2 percent increase in June. Asian markets ended in red, after Japan's consumer confidence weakened to the lowest level in five-and-a-half years. The data from the Cabinet Office showed that the consumer confidence index for households with two or more persons fell to a seasonally adjusted 37.8 in July from 38.7 in June.

Back home, non-banking finance companies (NBFCs) stocks remained in focus, after the Reserve Bank of India relaxed the end-use restrictions related to external commercial borrowings (ECBs), allowing corporates and NBFCs to raise ECBs for working capital and general corporate purposes. Stocks related to IT industry also remained in watch, as India's Ambassador to the US Harsh Vardhan Shringla said that Indian IT companies contributed $57.2 billion to the GDP of the US in 2017. Shringla said India-based global IT services companies employ more than 175,000 workers in the US accounting for 8.4 per cent of employment in the computer systems design and related services industry.

Finally, the BSE Sensex gained 83.88 points or 0.22% to 37,481.12, while the CNX Nifty was up by 32.60 points or 0.29% to 11,118.00.

The BSE Sensex touched a high and a low of 37,576.37 and 37,128.26, respectively and there were 22 stocks advancing against 09 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.72%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Metal up by 2.43%, Basic Materials up by 1.40%, PSU up by 1.36%, Auto up by 1.26% and Oil & Gas up by 1.06%, while Telecom down by 1.63%, Consumer Durables down by 0.53%, Realty down by 0.24% and Energy down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 6.04%, Indusind Bank up by 5.32%, Tata Steel up by 4.15%, Hero MotoCorp up by 4.00% and Sun Pharma up by 3.96%. On the flip side, Axis Bank down by 4.55%, Bharti Airtel down by 2.66%, Reliance Industries down by 1.23%, NTPC down by 0.71% and Maruti Suzuki down by 0.64% were the top losers.

Meanwhile, with an aim to tighten norms pertaining to Corporate Social Responsibility (CSR) spending for corporates, strengthen enforcement provisions and help unclog National Company Law Tribunal (NCLT), Parliament has cleared amendments to the companies law. Corporate Affairs & Finance Minister Minister Nirmala Sitharaman has said ‘we are trying to bring in ease of doing business, bring in a robust framework through which the Companies Act can be implemented. We are also trying to rationalise and re-categorise minor offences for civil defaults.’

About CSR norms, she said companies used to comply with the requirement fully or partly and then explain and get away with it. Now, there would be a provision wherein the unspent CSR amount would be transferred to an escrow account for three financial years. Subsequently, if the amount remains unspent then the same would be moved to funds specified in Scheduled VII of the Companies Act. Under the Act, certain class of profitable companies are required to shell out at least two per cent of their three-year annual average net profit towards CSR activities.

Sitharaman said that the amended bill will de-clog the NCLT by shifting routine matters out of it. To crack down on shell companies, she stated it has been made mandatory to have physical address and register to ensure such companies exist on ground. She further mentioned that four lakh companies have so far been de-registered as they did not file financial results for two years and did not even apply for dormant status.

The CNX Nifty traded in a range of 11,145.30 and 10,999.40. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 5.29%, Tata Steel up by 4.32%, Yes Bank up by 4.24%, Indian Oil Corporation up by 3.93% and Hero MotoCorp up by 3.90%. On the flip side, Zee Entertainment down by 5.25%, Axis Bank down by 4.64%, Bharti Airtel down by 2.82%, Titan down by 2.30% and Bharti Infratel down by 2.12% were the top losers.

European markets were trading mostly in green, France’s CAC increased 7.05 points or 0.13% to 5,518.12 and Germany’s DAX was up by 25.04 points or 0.21% to 12,172.28. On the other side, UK’s FTSE 100 was down by 29.00 points or 0.38% to 7,617.77.

Asian markets ended mostly lower on Wednesday as North Korea conducted its second weapons test in less than a week and a trade threat from US President Donald Trump to China cast a shadow over the fate of the latest round of trade talks taking place in Shanghai. Investors also awaited the outcome of a two-day US Federal Reserve meeting later in the day as well as Chairman Jerome Powell's post-meeting press conference for clues on the policy path. Chinese shares ended lower after official data showed the country's factory activity contracted for the third straight month in July amid a tariff war with Washington and weak domestic demand. The official manufacturing PMI for the month came in at 49.7. The non-manufacturing index fell to 53.7 from 54.2 in June while the composite index came in with a score of 53.1, up marginally from 53.0 in the previous month. Besides, Japanese shares closed down as investors watched developments on the trade front and the latest batch of corporate earnings. Moreover, Seoul shares declined notably amid an intensifying trade row with Japan and rising security tension on the Korean Peninsula after North Korea launched two short-range ballistic missiles into the sea Wednesday morning, the second launch of missiles in a week.