Post Session: Quick Review

Thursday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges garnered gains of more than one and half percent, after reports said the government was looking to roll-back the recently imposed higher tax on the foreign portfolio investors (FPIs). The markets made a gap-up opening but sooner erased gains to trade flat, as traders reacted negatively to 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. After that, markets gained traction and traded in fine fettle, as traders found solace 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.

Markets extended their upside in the last lap of trading and were trading at intraday high points, as the Reserve Bank of India (RBI) announced two key measures to help non-bank financial companies (NBFCs) which are facing a severe liquidity squeeze. The first is harmonisation of single counterparty exposure limit for banks' exposure to single NBFCs with the general single counterparty exposure limit. The central bank has decided to raise a banks’ exposure limit to a single NBFC to 20 per cent of tier-I capital of the bank. The second initiative deals with credit to the priority sector. Traders also took a note of Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf’s statement that the removal of some provisions of Article 370 will not only bring in huge trade and business opportunities for both Jammu & Kashmir (J&K) and Ladakh regions but will also help get the troubled region to stand on its feet.

On the global front, Asian markets ended mostly higher on Thursday, European markets were trading in green as investors took heart from a stronger-than-expected rebound in Chinese exports. Back home, power stocks were in focus, as Central Electricity Authority (CEA) data showed that fresh capacity addition in power has started on a sombre note. Out of the 1820 Mw envisaged to be added during April-June of this fiscal year, only 45 Mw has been added in thermal power generation.

The BSE Sensex ended at 37376.73, up by 686.23 points or 1.87% after trading in a range of 36655.41 and 37405.48. There were 29 stocks advancing against 2 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.52%, while Small cap index was up by 0.85%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 3.44%, Auto up by 2.99%, IT up by 2.02%, TECK up by 1.97% and Oil & Gas up by 1.96%, while there were no losing indices on BSE sectoral front. (Provisional)

The top gainers on the Sensex were Tata Motors - DVR up by 7.36%, HCL Tech. up by 6.92%, Tata Motors up by 5.83%, Reliance Industries up by 4.26% and Bajaj Auto up by 4.23%. (Provisional)

On the flip side, Tata Steel down by 3.61% and Indusind Bank down by 0.47% were the top losers. (Provisional)

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, a year 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 ended at 11048.20, up by 192.70 points or 1.78% after trading in a range of 10842.95 and 11058.05. There were 45 stocks advancing against 5 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech. up by 6.67%, Tata Motors up by 5.58%, JSW Steel up by 4.99%, Reliance Industries up by 4.38% and BPCL up by 3.93%. (Provisional)

On the flip side, Tata Steel down by 4.03%, Cipla down by 2.78%, Ultratech Cement down by 2.28%, Indiabulls Housing Finance down by 1.21% and Indusind Bank down by 0.35% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 10.94 points or 0.15% to 7,209.64, France’s CAC rose 60.30 points or 1.14% to 5,326.81 and Germany’s DAX was up by 87.58 points or 0.75% to 11,737.73.

Asian markets ended mostly higher on Thursday after China reported stronger-than-expected rebound in exports in July despite a protracted trade war with the United States. China's central bank fixed the Yuan weaker above 7 per dollar, the first time in a decade, but it was not as weak as many had expected. On the other hand, Oil prices jumped after seeing sharp declines the previous day on expectations that producers may reduce supply to support the market. Chinese shares ended higher after data showed Chinese exports rose 3.3 percent in July, compared to forecasts for a 2 percent drop, while imports fell less than the expected. Further, Japanese shares ended modestly higher and the yen's appreciation against the dollar slowed after Japan approved its first shipment of restricted goods to South Korea.