Post Session: Quick Review

Indian equity Markets traded with volatility for most part of the day on Wednesday and witnessed sharp selling activity in final hour of trade which forced to close the session at day’s low. Earlier, key equity indices traded flat, as traders remained cautious with economic think-tank NCAER’s statement that India's GDP growth is likely to be 6.2 per cent during the current fiscal, down from 6.8 per cent in 2018-19, on account of flat growth in agriculture sector. The prospects for agricultural sector in 2019-20 depend largely on the south-west monsoon. However, some buying crept in after the RBI's monetary policy committee (MPC) reduced the repo rate by 35 basis points (bps) to 5.40 percent from 5.75 percent for fourth time in a row, to help revive the economy. But, markets saw strong sell-off the last leg of trade, as anxiety remained among the investors with the Reserve Bank of India (RBI) lowered the GDP growth projection for 2019-20 to 6.9 per cent from 7 per cent forecast in the June policy, and underlined the need for addressing growth concerns by boosting aggregate demand.

On the global front, Asian markets ended mixed on Wednesday, with cautious trading due to the escalating US-China trade tensions. European markets were trading in green, as deal-making activity in the German chemical sector helped offset losses from London-listed mining majors. Back home, tyre stocks were in focus amid ratings agency Icra’s statement that demand slowdown will curtail tyre industry's revenue growth to 3-4 per cent in 2019-20, and margins are expected to decline. 

The BSE Sensex ended at 36650.17, down by 326.68 points or 0.88% after trading in a range of 36643.54 and 37104.79. There were 8 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.51%, while Small cap index was down by 0.13%. (Provisional)

The few gaining sectoral indices on the BSE were Healthcare up by 0.34%, IT up by 0.19% and TECK up by 0.17%, while Metal down by 2.90%, Auto down by 2.28%, PSU down by 2.06%, Basic Materials down by 1.61% and Oil & Gas down by 1.59% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 2.28%, Hindustan Unilever up by 1.70%, Hero MotoCorp up by 1.50%, Indusind Bank up by 0.52% and Sun Pharma up by 0.43%. (Provisional)

On the flip side, Mahindra & Mahindra down by 5.62%, Tata Steel down by 4.93%, Tata Motors - DVR down by 4.64%, Tata Motors down by 4.45% and SBI down by 4.07% were the top losers. (Provisional)

Meanwhile, with flat growth in agriculture sector, economic policy think-tank, the National Council of Applied Economic Research (NCAER) in its latest report said that India's Gross Domestic Product (GDP) growth is likely to be 6.2 per cent during the current fiscal (FY20), down from 6.8 per cent in 2018-19. It also said that the prospects for agricultural sector in 2019-20 depend largely on the south-west monsoon.

It said out of a total number of 36 agro-meteorological sub-divisions in the country, three have received excess rainfall, 21 get normal rainfall, while the remaining 12 sub-divisions were rain deficient, as of August 5, 2019. It added that the country as a whole has received 7 per cent below normal rainfall by August 5, 2019. The country has also experienced temporal variations in rainfall.

NCAER’s forecast as per the annual model for Gross Value Added (GVA) at basic prices is at 6 per cent for 2019-20 on a year-on-year (y-o-y) basis. The forecast as per the quarterly model is that GVA will grow at 6.2 per cent on a y-o-y basis. It further said the real agriculture GVA is envisaged to grow at zero per cent, real industry GVA at 6.1 per cent, and real services GVA at 6.9 per cent in 2019-20.

On the inflation front, it said the Wholesale Price Index (WPI) inflation is projected at 2.6 per cent. Besides, the growth rates in exports and imports, in dollar terms, are estimated at 4.4 per cent and 3.3 per cent, respectively. The current account balance and central fiscal deficit, as percentages of GDP, are projected at (-) 0.6 per cent and 3.5 per cent, respectively.

The CNX Nifty ended at 10838.75, down by 109.50 points or 1.00% after trading in a range of 10835.90 and 10975.65. There were 14 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 3.06%, Cipla up by 2.76%, Yes Bank up by 2.05%, Hindustan Unilever up by 1.89% and Hero MotoCorp up by 1.29%. (Provisional)

On the flip side, Indiabulls Housing Finance down by 13.37%, Mahindra & Mahindra down by 6.16%, Tata Steel down by 5.88%, Tata Motors down by 4.33% and BPCL down by 4.27% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 61.65 points or 0.86% to 7,233.34, France’s CAC added 68.66 points or 1.31% to 5,303.31 and Germany’s DAX rose 170.06 points or 1.47% to 11,738.02.

Asian markets ended mixed on Wednesday, with cautious trading due to the escalating US-China trade tensions. Meanwhile, China's central bank took steps Tuesday to stabilize the yuan, which boosted markets after Monday's big sell-off. But today the People's Bank of China once again cut the yuan's daily reference rate, which is a ‘band’ it sets every day to curb how far up or down the yuan's value can move. The rate was set to 6.9996 yuan per one US dollar, the lowest since May 2008. Japanese shares ended lower on worries that a stronger yen will put more pressure on its struggling exporters.