Post Session: Quick Review

Indian equity benchmarks remained under pressure throughout the session and ended with losses of over a percent on Thursday, triggered by a sell-off in global equities. Key indices begun day on a somber note, on the back of weak economic data. The government data showed that growth of eight core industries dropped to 0.2 per cent in June mainly due to a contraction in oil-related sectors as well as in cement production. The eight core sector industries - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity - had expanded by 7.8 per cent in June last year. Domestic sentiment was also hit after the Controller General of Accounts (CGA) data showing that the government's fiscal deficit touched Rs 4.32 trillion for the June quarter, which is 61.4 per cent of the budget estimate for 2019-20 fiscal. In absolute terms, the fiscal deficit, the gap between expenditure and revenue, was Rs 4.32 trillion at June-end.

Selling got intensified during the late afternoon session and local barometer gauges traded at intraday low levels, as traders reacted negatively to Global analytical firm CRISIL sliced its estimate of India's gross domestic product (GDP) growth by 20 basis points to 6.9 per cent for the current fiscal 2019-20 following a triangulation of downside risks: weak monsoon, slowing global growth and sluggish high-frequency data for the first quarter. Some pessimism also spread among investors with a private report that the Centre’s net tax receipts (NTR) in Q1 were just 14.7% of the FY20 target (BE), with annual growth of a mere 6%. This is even as annual NTR growth required to meet the BE is a daunting 29.5%. However, in dying hour of trade, the markets managed to trim some of their initial losses, as traders found some solace with a report that the Nikkei Manufacturing Purchasing Managers' Index, which rose to 52.5 in July from June's 52.1. It has remained above the 50-mark separating contraction from growth for two years.

On the global front, Asian markets ended mostly lower on Thursday, following US Federal Reserve chairman Jerome Powell's fresh comments on global slowdown, coupled with simmering US trade tensions.  However, European markets were trading in green, even though the euro area manufacturing sector contracted the most since the end of 2012 in July but at a slower than initially estimated pace. Back home, stocks related to Coffee sector ended lower after the Coffee Board showed that Coffee shipments from India, Asia’s third-largest producer, and exporter, remained flat at 2,38,669 tonnes so far this calendar year with maximum shipments made to Italy.

The BSE Sensex ended at 37065.85, down by 415.27 points or 1.11% after trading in a range of 36694.18 and 37387.18. There were 7 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.82%, while Small cap index was down by 1.04%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 0.73%, Consumer Durables up by 0.31%, Auto up by 0.12% and Utilities up by 0.07%, while Metal down by 3.35%, Basic Materials down by 2.43%, Telecom down by 2.42%, TECK down by 2.03% and IT down by 1.85% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 2.14%, Reliance Industries up by 1.48%, Power Grid up by 1.40%, Bajaj Auto up by 1.09% and Hero MotoCorp up by 0.67%. (Provisional)

On the flip side, Vedanta down by 5.61%, SBI down by 4.56%, Tata Motors down by 4.35%, Bharti Airtel down by 4.11% and Tata Motors - DVR down by 3.53% were the top losers. (Provisional)

Meanwhile, the Controller General of Accounts (CGA) in its latest data has showed that the government's fiscal deficit or the gap between the government's expenditure and revenue touched 61.4% of the Budget Estimate (BE) in the first quarter (April-June) of fiscal year 2019-20 (FY20). In absolute terms, the fiscal deficit was Rs 4.32 trillion at June-end. It was 68.7% of 2018-19 BE in the year-ago period. The government estimates the fiscal deficit to be at Rs 7.03 trillion during 2019-20. It aims to restrict the fiscal deficit at 3.4% of the GDP in the current fiscal, same as the last financial year.

The data showed that revenue receipts of the government during April-June, 2019-20 was 14.4% of the BE. It was 15.5% of BE in the year-ago period. In absolute terms, revenue receipts stood at Rs 2.84 trillion at June-end 2019. During the entire year, the revenue receipts have been pegged at Rs 19.77 trillion. The capital expenditure was 18.8% of the BE as compared to 29% in the year-ago period.

Total expenditure during April-June period stood at Rs 7.21 trillion or 25.9% of BE. It was 29% of BE in the corresponding period last fiscal. The government has pegged its total expenditure during the fiscal ending March 2020 at Rs 27.84 trillion. The CAG said the fiscal deficit figure shown in monthly accounts during a financial year is not necessarily an indicator of fiscal deficit for the year as it gets impacted by temporal mismatch between flow of not-debt receipts and expenditure up to that month on account of various transitional factors both on receipt and expenditure side.

The CNX Nifty ended at 10991.30, down by 126.70 points or 1.14% after trading in a range of 10881.00 and 11076.75. There were 11 stocks advancing against 38 stocks declining on the index. (Provisional)

The top gainers on Nifty were Wipro up by 2.11%, Maruti Suzuki up by 2.05%, Bharti Infratel up by 1.85%, Power Grid up by 1.83% and Reliance Industries up by 1.69%. (Provisional)

On the flip side, Vedanta down by 5.58%, JSW Steel down by 5.03%, SBI down by 4.73%, Tata Motors down by 4.28% and Hindalco down by 4.17% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 15.09 points or 0.2% to 7,601.87, France’s CAC rose 40.02 points or 0.73% to 5,558.92 and Germany’s DAX was up by 42.46 points or 0.35% to 12,231.50.

Asian markets ended mostly lower on Thursday as Fed Chairman Jerome Powell dampened hopes of further rate cuts later this year and top American and Chinese negotiators finished talks with little progress toward ending a trade war. Chinese shares closed down as a private survey showed Chinese factory activity contracted in July and China's central bank kept its main policy rates on hold. The People's Bank of China refrained from daily open market operations, saying that banking system liquidity was ‘reasonably ample’. Further, Seoul shares ended lower as relations between Japan and South Korea appear to be at a stalemate over export restrictions. Meanwhile, Japanese shares ended little changed with a positive bias as investors awaited manufacturing and employment data from the US for additional cues about future rate cuts. The manufacturing sector in Japan continued to contract, albeit at a slightly slower rate, the latest survey from Jibon revealed with a manufacturing PMI score of 49.4. That's up fractionally from 49.3 in June.