Post Session: Quick Review

Indian equity benchmarks traded with volatility, but in green terrain, throughout the day and finished Tuesday’s session with gains of over a half percent each, boosted by rupee’s gain against the US dollar as well as positive leads from Asian markets. The markets made a cautious start with Ficci Economic Outlook Survey stating that India's economy will grow at a median rate of 6% during the Q1FY20. Also, it pegged the annual median GDP growth forecast for 2019-20 at 6.9%, with a minimum and maximum estimate of 6.7% and 7.2%, respectively. But, markets soon gained traction and traded in fine fettle, as traders reacted positively to Chief Economic Advisor Krishnamurthy Subramanian’s statement that the ongoing trade war between the United States of America and China will not have any impact on Indian export which is just below 2 per cent of the global trade.

Markets hold strength in late trade, taking support from the Reserve Bank of India’s (RBI) decision to transfer a record Rs 1,23,414 crore of its surplus to the central government for the fiscal year 2018-19 or FY19 (July to June), and an additional Rs 52,637 crore of excess provisions as recommended by the Bimal Jalan committee on Economic Capital Framework (ECF). The street was also finding support from a report that Prime Minister Narendra Modi informed President Donald Trump that India plans to further step up imports, including oil, from the US and that $4 billion worth of imports were already ‘in the pipeline’, as the two countries sought to overcome their differences on tariffs and market access.

On the global front, Asian markets ended mostly higher on Tuesday, while European markets were trading mostly in green, as investors found reason to be cautiously optimistic again about the potential for progress in the costly trade war between the U.S. and China. Back home, stocks related to chemical industry were in focus after the government said foreign direct investment (FDI) in India's chemical sector is meagre at only 9 percent of the total inflow in the country in spite of conducive policy and asked the industry players to introspect the reasons for the same.

The BSE Sensex ended at 37683.78, up by 189.66 points or 0.51% after trading in a range of 37449.69 and 37731.51. 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 0.55%, while Small cap index was up by 1.59%. (Provisional)

The top gaining sectoral indices on the BSE were PSU up by 2.31%, Metal up by 2.16%, Oil & Gas up by 1.96%, Industrials up by 1.95% and Capital Goods up by 1.82%, while Telecom down by 2.23%, TECK down by 1.53% and IT down by 1.36% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 9.32%, Tata Motors - DVR up by 7.57%, Tata Steel up by 3.71%, Yes Bank up by 3.10% and NTPC up by 3.00%. (Provisional)

On the flip side, Bharti Airtel down by 3.71%, Tech Mahindra down by 2.37%, Infosys down by 2.09%, TCS down by 1.37% and Kotak Mahindra Bank down by 0.75% were the top losers. (Provisional)

Meanwhile, Chief Economic Advisor (CEA) Krishnamurthy Subramanian has said that the ongoing tariff war between the US and China will not have any impact on India’s export which is just below 2 percent of the global trade. He said 'Our exports share is still very small. Our share of global export trade itself is about 2 percent. Therefore, we still have an enormous opportunity to grow. Even if there is actually some shrinkage in the pie of the global trade, still we can grow our pie.'

Subramanian further stated that a raft of measures announced by the government including the rollback of enhanced super-rich tax on foreign and domestic equity investors for the revival of muted growth in the economy was in the right direction. Therefore, he said that there is need to focus on economic growth along with the structural reforms. He also said that the government would do all that is needed for economic growth. He added that investment is a key driver of the economic growth while consumption is a force multiplier.

Besides, on the proposed Rs 70,000-crore capital infusion by the government in public sector banks, CEA said 'I think this Rs 70,000 crore that has been announced for the recapitalisation of banks is quite important because the financial sector matters a lot for economic growth. Credit is basically the lifeline for economic growth. Therefore that is something which actually is important.'

The CNX Nifty ended at 11119.95, up by 62.10 points or 0.56% after trading in a range of 11049.50 and 11141.75. There were 35 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 9.00%, Britannia Industries up by 6.20%, Tata Steel up by 3.68%, Yes Bank up by 3.50% and NTPC up by 2.96%. (Provisional)

On the flip side, Bharti Airtel down by 3.54%, Indiabulls Housing Finance down by 3.54%, Tech Mahindra down by 2.46%, Infosys down by 2.07% and Grasim Industries down by 1.59% were the top losers. (Provisional)

European markets were trading mostly in green; France’s CAC increased 1.85 points or 0.03% to 5,352.87 and Germany’s DAX increased 25.30 points or 0.22% to 11,683.34, while UK’s FTSE 100 decreased 15.83 points or 0.22% to 7,079.15.

Asian markets ended mostly higher on Tuesday after Trump hints possibility of a trade deal with China, saying he believed China was sincere in its desire to reach an agreement. Chinese shares ended higher as Chinese officials called for the resolution of trade dispute with the US and as a report showed China's industrial firms returned to profit in July. Profits at China’s large industrial firms recovered in July, posting year-on-year growth of 2.6%, following a decline of 3.1% slump in June. Japanese shares ended up after Trump said the US had no plan to imminently impose new tariffs on autos imported from Japan. However, Hong Kong shares declined after protests turned violent in the western New Territories district of Tsuen Wan.