Post Session: Quick Review

Indian equity benchmarks reversed early losses to end Friday’s session with minor gains, on the back of mostly positive trade in other Asian equities coupled with recovery in the rupee value against dollar. Key indices hovered in negative zone in morning trade, as traders remain concerned with report that India Inc’s growth engine slowed in the June quarter amid sluggish demand across sectors and the base effect in the form of a strong expansion in the year-ago period, reflecting the overall slowdown in the economy. Traders also took note of report that the current economic slowdown can be attributed to a combination of structural and cyclical factors, in addition to global uncertainties. It added that the country's economy is showing signs of slowdown, with hi-frequency indicators like industrial output posting subdued growth and automobile sales touching historical lows.

However, in the afternoon trade, key indices recovered from the losses to close on positive note, taking support from government data showing that India’s merchandise exports rebounded and grew 2.25% in July, aided by higher shipments of organic goods, drugs and pharmaceuticals, while imports shrank, narrowing the trade deficit. The commerce department data showed that India’s exports increased to $26.3 billion in July from $25.75 billion a year earlier, imports declined 10.4% to $39.76 billion last month from $44.39 billion in July 2018. This resulted in the trade deficit narrowing to $13.43 billion from $18.63 billion a year earlier. Some solace came with Commerce Secretary Anup Wadhawan’s report that exports growth of the country in the current fiscal is likely to be in double digits despite the challenging situation both on the external and internal fronts. He added in the last financial year, growth in exports was between nine and 10% and the volume touched $331 billion.

On the global front, Asian markets ended mostly higher on Friday, while European markets were trading in green, on account of declining US Treasury yields. Further, Donald Trump said that United States is involved in favorable discussions with China that may bring an end to the ongoing US-China trade dispute. Back home, auto stocks were in focus with the auto industry body Society of Indian Automobile Manufacturers’ (SIAM) statement that even if it is for a short period of time, just to kick start the industry, there should be a reduction in goods and services tax (GST) from 28 percent to 18 percent.

The BSE Sensex ended at 37340.57, up by 29.04 points or 0.08% after trading in a range of 36974.41 and 37444.45. There were 21 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.13%, while Small cap index was up by 0.07%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 1.45%, Auto up by 1.08%, Power up by 1.02%, Telecom up by 0.78% and Bankex up by 0.77%, while Energy down by 0.72%, IT down by 0.71%, Consumer Durables down by 0.71%, TECK down by 0.50% and Metal down by 0.48% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 3.85%, Power Grid up by 3.02%, Indusind Bank up by 2.76%, Maruti Suzuki up by 2.57% and Asian Paints up by 1.97%. (Provisional)

On the flip side, TCS down by 1.90%, Vedanta down by 1.64%, Tata Motors - DVR down by 1.57%, HCL Tech. down by 1.48% and Reliance Industries down by 1.01% were the top losers. (Provisional)

Meanwhile, expressing optimism over India’s export growth, Commerce Secretary Anup Wadhawan has said that exports growth of the country is likely to be in double digits in the current fiscal (FY2019-20) despite the challenging situation both on the external and internal fronts. He added that growth in exports was between 9-10% and the volume touched $331 billion which was a record in the last financial year. He also said the country had seen the continuous growth in the last three years.

Wadhawan further said that the global slowdown was almost visible as per the forecast of the International Monetary Fund (IMF) and this fact would be factored in the revised Foreign Trade Policy (FTP). The present FTP is valid till March 31, 2020 and the policy is announced in every five years. He noted that the revised FTP would be simple and easy to use. In the first few months of the current fiscal, both exports and imports have been impacted. He added that while exports growth has managed to retain the past levels, imports have fallen leading to an improvement in the trade deficit.

On the impact of withdrawal of export benefits to Indian exporters under Generalized System of Preferences (GSP) by US, Commerce Secretary said GSP is not an issue which is relevant now. He said that benefits under GSP helped not more than 3-4% of total exports to the US. About engineering exporters, he said that there is a need to focus on upgradation for the benefit of the Indian industry. The government will work closely with the exporters to identify all the issues, both domestic and overseas. He said the centre will also look at the bilateral and regional engagements with various countries.

The CNX Nifty ended at 11042.50, up by 13.10 points or 0.12% after trading in a range of 10924.30 and 11068.65. There were 30 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were UPL up by 4.52%, Power Grid up by 2.95%, Yes Bank up by 2.68%, Maruti Suzuki up by 2.65% and Grasim Industries up by 2.46%. (Provisional)

On the flip side, TCS down by 1.88%, Vedanta down by 1.67%, HCL Tech. down by 1.33%, BPCL down by 1.13% and HDFC down by 0.97% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 25.11 points or 0.36% to 7,092.12, France’s CAC rose 39.33 points or 0.75% to 5,276.26 and Germany’s DAX was up by 82.85 points or 0.73% to 11,495.52.

Asian markets ended mostly higher on Friday on account of declining US Treasury yields. Further, Donald Trump said that United States is involved in favorable discussions with China, that may bring an end to the ongoing US-China trade dispute. However, up move was limited on tensions of global economic slowdown. Japanese shares closed higher on account of stability in Chinese and Hong Kong markets amid ongoing conflicts in Hong Kong.