Post Session: Quick Review

Indian equity benchmarks traded in green for most part of the day and ended Tuesday’s session with over half a percent gains, defying a weak trend in global markets. After making a cautious start, markets gained traction and traded in fine fettle, as traders reacted positively to Finance Minister Nirmala Sitharaman’s statement that the government planned steps to improve the state of the economy fairly quickly after getting inputs from business leaders. Traders took note of a private report indicated that India's economy needs external capital flow to grow at 9% and touch $5 trillion in the next five years.

Indices extended their gains in late afternoon session, taking support from report that the ASSOCHAM expects the Reserve Bank of India to cut the benchmark policy Repo rate by 50 basis points or more, in the wake of a realistic assessment of the state of economy which needs an immediate demand push and investment support by way of reduced cost of borrowing. However, markets trimmed some of their initial gains, as anxiety remained among the traders with report showing that retail loans given by banks in H1FY19 (January-June 2019) touched a five-year low at 7.3 per cent. The subdued numbers come at a time when dismal employment and low consumption demand have dragged economic growth. Meanwhile, to protect the interest of online shoppers, the Department of Consumer Affairs has released draft guidelines on e-commerce that state that an e-commerce entity cannot directly or indirectly influence the price of the goods or services.

On the global front, Asian markets ended mostly lower on Tuesday, with cautious trading over escalating Sino-American tensions after the Trump administration labeled China a currency manipulator and China confirmed it has halted purchases of US farm products. However, European markets were trading in green, as Germany's factory orders rebounded at a faster than expected pace in June. Back home, Auto sector were in focus with report that the recent draft notification by the Ministry of Road Transport and Highways, which proposes to increase the registration charge of new vehicles, is expected to further aggravate the slowdown in the automobile industry.

The BSE Sensex ended at 36933.53, up by 233.69 points or 0.64% after trading in a range of 36536.59 and 37241.77. There were 23 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 1.44%, while Small cap index was up by 1.71%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 1.78%, Capital Goods up by 1.73%, Consumer Discretionary Goods & Services up by 1.68%, Realty up by 1.68% and Basic Materials up by 1.64%, while Energy down by 0.89%, IT down by 0.25%, TECK down by 0.21% and Oil & Gas down by 0.16% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 5.36%, Tech Mahindra up by 4.62%, Bajaj Finance up by 3.66%, Hero MotoCorp up by 3.37% and Bharti Airtel up by 3.21%. (Provisional)

On the flip side, TCS down by 1.55%, Reliance Industries down by 1.54%, Power Grid down by 1.44%, Tata Motors down by 1.17% and Tata Motors - DVR down by 0.77% were the top losers. (Provisional)

Meanwhile, amid continuing overseas fund outflow from the markets following the decision to impose surcharge on certain class of such investors, Finance Minister Nirmala Sitharaman has said that the government will soon hold discussions with representatives of Foreign Portfolio Investors (FPIs). She added that Economic Affairs Secretary Atanu Chakraborty would hold discussions with representatives of FPIs soon. She said ‘I am quite open to hear them out what they (FPIs) have to say’.

Besides, FPIs pulled out Rs 2,881.10 crore from debt and equity segments on August 1 and 2. In July, they had withdrawn a net amount of Rs 2,985.88 crore from the capital markets. In the 2019-20 Budget, the government had decided to increase surcharge from 15 per cent to 25 per cent on taxable income between Rs 2 crore and Rs 5 crore, and from 15 per cent to 37 per cent for income above Rs 5 crore. It would also be applicable for FPIs operating as trusts or as association of persons.

Moreover, talking about sovereign bonds, the Minister said nothing more has been done apart from the announcement in the Budget as the ministry was busy in dealing with three bills, including amendment to the Insolvency and Bankruptcy Code (IBC).  The government has announced it would start raising a part of its gross borrowing programme from external markets in foreign currencies. India's sovereign external debt-to-GDP level is among the lowest globally at less than 5 per cent.

The CNX Nifty ended at 10935.30, up by 72.70 points or 0.67% after trading in a range of 10813.80 and 11018.55. There were 35 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing Finance up by 7.36%, Yes Bank up by 5.49%, Tech Mahindra up by 4.04%, Bajaj Finance up by 3.72% and Eicher Motors up by 3.53%. (Provisional)

On the flip side, Zee Entertainment down by 5.74%, Cipla down by 3.61%, Reliance Industries down by 1.60%, TCS down by 1.52% and Britannia Industries down by 1.45% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 8.06 points or 0.11% to 7,231.91, France’s CAC increased 48.87 points or 0.93% to 5,290.42 and Germany’s DAX increased 84.04 points or 0.72% to 11,742.55.

Asian markets ended mostly lower on Tuesday, with cautious trading over escalating Sino-American tensions after the Trump administration labeled China a currency manipulator and China confirmed it has halted purchases of US farm products. Though, the Yuan stabilized to hold above 7 per dollar, supported by signs that Beijing might not permit a steep depreciation. Japanese shares closed down as the yen strengthened as investors opted for a safe-haven bid amid escalation in the Sino-US trade war.