Markets erase opening gains to trade flat; Sensex above 36,700 mark

Indian equity benchmarks made gap-up opening but sooner erased gains to trade flat near neutral lines in early deals on Thursday amid overnight fall in crude oil prices. Broader indices were also trading mixed. Sentiments were positive initially with the India Meteorological Department (IMD) data showing that India received 28% more rainfall than the 50-year average in the week to August 7, easing concerns of drought. Monsoon rains are crucial for farm output and economic growth, as agriculture forms about 15% of India's $2.5-trillion economy. Traders took note of report that with the Reserve Bank of India (RBI) slashing the repo rate by 35 basis points, India Inc said its swift and full transmission by banks in the form of lower lending rates will be crucial to lift consumption and investment in the economy. Though, some cautiousness crept in the markets as the RBI’s consumer confidence declined in July as reflected in the current situation index (CSI); the future expectations index (FEI) fell by about 4 points. It said that consumers’ perceptions on the general economic situation and the employment scenario softened, while their assessment of their own incomes turned out to be less optimistic than in May 2019.

On the global front, the Asian markets were trading mostly in green following the positive cues from Wall Street. Investors’ sentiment was boosted after China's central bank set the official reference rate for the yuan at weaker than 7 per dollar for the first time since 2008. Investors also digested report that Japan has granted approval for some exports of semiconductor manufacturing materials to South Korea. Back home, in scrip specific development, NBCC rose on securing total business of Rs 198.48 crore in July and Adani Ports and Special Economic Zone (APSEZ) gained on reporting 48% rise in its consolidated net profit at Rs 1,028.69 crore for the quarter ended June 30, 2019, as compared to Rs 697.40 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 36718.19, up by 27.69 points or 0.08% after trading in a range of 36655.41 and 36903.81. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.37%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were Telecom up by 2.24%, TECK up by 1.18%, IT up by 1.05%, Auto up by 0.48% and Realty was up by 0.35%, while Consumer Durables down by 1.12%, Energy down by 0.65%, Bankex down by 0.42%, Metal down by 0.34% and Oil & Gas was down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 3.69%, Tata Motors - DVR up by 3.00%, Hero MotoCorp up by 2.66%, Bharti Airtel up by 2.52% and Tata Motors up by 2.13%. On the flip side, Tata Steel down by 2.71%, Indusind Bank down by 2.64%, Axis Bank down by 1.78%, Reliance Industries down by 1.08% and HDFC down by 0.92% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its latest survey report has stated that consumer confidence declined in July as reflected in the current situation index (CSI); the future expectations index (FEI) fell by about 4 points. It said consumers’ perceptions on the general economic situation and the employment scenario softened, while their assessment of their own incomes turned out to be less optimistic than in May 2019. However, years down the line, survey showed participants expect the sentiment to improve a bit.

The Central Bank said responses totaling 5,351 in 13 major cities perceived a rise in the price level and the majority expects prices to rise over the year ahead. This boosted sentiments on overall spending, but they were less optimistic about discretionary spending.

As per the survey report, 37.4% respondents said they are better off now than a year ago, 38.4% respondents said they are worse off. Thus, the net response is a negative 1%. Previously, in December 2018 the net response was a negative 6.4%. Similarly, the survey showed 59.4% consumers expect their situation to improve a year from now, while 24.6% consumers feel their situation will deteriorate. Thus, the net response was a positive 34.8%.

The CNX Nifty is currently trading at 10852.80, down by 2.70 points or 0.02% after trading in a range of 10848.55 and 10915.70. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were HCL Technologies up by 3.65%, Hero MotoCorp up by 2.38%, Bharti Airtel up by 2.28%, Bharti Infratel up by 2.20% and Tata Motors up by 1.96%. On the flip side, Tata Steel down by 2.81%, Indusind Bank down by 2.73%, Cipla down by 2.28%, Axis Bank down by 1.89% and Titan Company down by 1.40% were the top losers. 

Asian markets were trading mostly in green; Nikkei 225 gained 94.95 points or 0.46% to 20,611.51, Hang Seng jumped 173.38 points or 0.67% to 26,170.41, Kospi advanced 18.34 points or 0.96% to 1,928.05, Taiwan Weighted soared 99.04 points or 0.95% to 10,485.22, Jakarta Composite strengthened 42.75 points or 0.69% to 6,246.95 and Shanghai Composite added 25.24 points or 0.91% to 2,793.92. On the flip side, Straits Times was down by 13.69 points or 0.43% to 3,171.00.