Bourses stage recovery to end higher

Indian equity benchmarks staged recovery to end the Friday’s trading session in green terrain, with Sensex garnering around 100 points. After a negative start, the markets traded in red terrain for the most part of the session, as the World Bank’s report showed that India has now taken a backseat to be the seventh largest economy globally with UK and France now ahead of it. As per the data, India grew to $2.73 trillion economy in 2018. In 2017, the country stood at the fifth spot with its size at $2.65 trillion. However, in the last leg of the trade, key indices turned positive, amid a report that the gross Goods and Services Tax (GST) collections increased to Rs 1.02 lakh crore in the month of July 2019. The July mop-up was 5.8 per cent higher than the Rs 96,483 crore collected in the same month last year.

In late noon deals, markets participants took support with the Reserve Bank of India’s (RBI) latest data report showed that bank credit rose by 12.01 percent to Rs 96.57 trillion, while deposits grew 10.59 percent to Rs 126.491 trillion in the fortnight ended on July 19. In the year ago fortnight, deposits were at Rs 114.371 trillion and advances stood at Rs 86.09 trillion. Adding some relief among traders, the India Meteorological Department said that monsoon is expected to be normal in August and September. Quantitatively, the rainfall across the country as a whole during the two-month period is likely to be 100 per cent of the Long Period Average (LPA) with a model error of plus or minus 8 per cent. 

On the global front, European markets were trading in red, after Italy's industrial production declined for the fourth month in a row in June and the pace doubled. The data from the statistical office ISTAT showed that industrial production declined a working day adjusted 1.2 percent year-on-year in June, following a 0.6 percent fall in May. Asian markets ended in red, as Malaysia's exports declined unexpectedly in June, while imports fell at a faster-than-expected rate. The data from the Department of Statistics showed that exports declined 3.1 percent year-on-year to MYR 76.2 billion in May. The latest decline in exports was driven by a slump in shipments to Hong Kong, China, Japan and Vietnam.

Back home, IT industry stocks ended in green, as Union Minister of Commerce & Industry and Railways, Piyush Goyal said that the government of India will give all support for the global growth of India’s IT industry and will make all efforts to facilitate the IT service industry & for that it is ready to engage with China and also Japan and Korea. Stocks related to the auto industry also gained, despite ratings agency CRISIL Research’s latest report stating that the passenger vehicles (PVs) sales are likely to face further pressure in August 2019, mainly due to Original Equipment Manufacturers (OEMs) efforts to maintain normal inventory levels amid weak retail sentiments.

Finally, the BSE Sensex gained 99.90 points or 0.27% to 37,118.22, while the CNX Nifty was up by 17.35 points or 0.16% to 10,997.35.

The BSE Sensex touched a high and a low of 37,375.16 and 36,607.41, respectively and there were 17 stocks advancing against 14 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index rose 0.15%, while Small cap index was down by 0.44%.

The top gaining sectoral indices on the BSE were Telecom up by 3.63%, Auto up by 1.07%, TECK up by 0.91%, Consumer Disc up by 0.82% and Consumer Durables up by 0.79%, while Metal down by 1.95%, PSU down by 1.76%, Power down by 1.30%, Utilities down by 1.03% and Oil & Gas down by 0.86% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 6.02%, Asian Paints up by 2.71%, Bajaj Auto up by 2.49%, Maruti Suzuki up by 2.12% and Mahindra & Mahindra up by 1.83%. On the flip side, SBI down by 2.76%, Tata Steel down by 2.50%, NTPC down by 2.05%, ONGC down by 1.86% and Power Grid down by 1.73% were the top losers.

Meanwhile, CRISIL in its latest report has lowered its estimate of India's gross domestic product (GDP) growth by 20 basis points (bps) to 6.9 per cent for the current financial year (FY20) on account of downside risks like weak monsoon and slowing global growth. It mentioned that the slowdown would be pronounced in the first half of the fiscal, while the second half should find support from expected monetary easing, consumption, and statistical low-base effect.

It further stated that that the non-bank (including housing finance companies) crisis, which began late last fiscal, and the stress that ensued, slowed disbursals and further impacted household demand, which had already moderated amid lower incomes, weak sentiment and rising costs (fuel prices and insurance for automobiles). With access to funding becoming a challenge and non-banks caught up in managing liquidity, their growth halved to a multi-year low in the second-half of last fiscal, and remains impacted.

However, it noted that India's GDP had grown at an impressive 8.2 per cent in fiscal 2017, the fastest in a decade. This was followed by disruptions stemming from policy initiatives and reforms, and rising global uncertainty including from trade disputes -- which together triggered a cyclical downturn.

The CNX Nifty traded in a range of 11,080.15 and 10,848.95. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 6.99%, Asian Paints up by 2.88%, Eicher Motors up by 2.53%, Bajaj Auto up by 2.48% and Maruti Suzuki up by 2.47%. On the flip side, Indiabulls Housing Finance down by 8.61%, Tata Steel down by 2.99%, SBI down by 2.90%, Coal India down by 2.74% and Wipro down by 2.46% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 145.48 points or 1.92% to 7,439.39, France’s CAC fell 156.76 points or 2.82% to 5,400.65 and Germany’s DAX was down by 319.41 points or 2.61% to 11,933.74.

Asian markets ended mostly lower on Friday, followed by heavy selling pressure after a surprise tariff announcement from the United States overnight escalated trade tensions between Washington and Beijing. US President Donald Trump said Thursday that the US is putting 10% tariffs on another $300 billion worth of Chinese goods starting September 1. Japanese shares closed down as US-China trade tensions flared up once again, raising fresh concerns about the outlook for the global economy. Further, Seoul shares declined sharply amid Japan's decision to remove South Korea from a list of countries that enjoy minimum export controls.