Indices close volatile day with notable gains

Indian equity benchmarks closed volatile day with notable gains on Tuesday, with Sensex and Nifty gaining around 150 and 50 points, respectively. After a positive start, key indices turned volatile, affected with FICCI’s 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. Domestic sentiments also remained cautious during the day, amid a private report stating that India's economic growth momentum is expected to slip further as there is no quick fix solution for the structural issues that the economy is facing.

However, markets managed to keep their heads in green terrain for the most part of the trading session, taking support with Chief Economic Advisor (CEA) Krishnamurthy Subramanian’s statement 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. Some support also came 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).

On the global front, European markets were trading in green terrain, despite Germany's economy contracted as initially estimated in the second quarter due to weak foreign demand and there are signs that the shrinking continued into the third quarter, pushing the biggest euro area economy to the verge of recession and strengthening calls for economic stimulus. Gross domestic product shrank slightly by 0.1 percent quarter-on-quarter in the three months to June, reversing the first quarter's 0.4 percent expansion. Asian markets ended on higher note, after Hong Kong's trade deficit narrowed in July with imports falling more than exports.

Back home, banking industry stocks ended higher, after credit rating agency Moody's said that the government's announcement of an upfront capital infusion of Rs 70,000 crore in public sector banks (PSBs) will enable them to grow loans by around 13-15% in the fiscal year ending March 2020 and will also allow them to meet the final Basel III capital requirements. Further, stocks related to the chemical industry remained in watch, 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 a conducive policy and asked the industry players to introspect the reasons for the same.

Finally, the BSE Sensex gained 147.15 points or 0.39% to 37,641.27, while the CNX Nifty was up by 47.50 points or 0.43% to 11,105.35.

The BSE Sensex touched a high and a low of 37,731.51 and 37,449.69, respectively and there were 23 stocks advancing against 08 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.53%, while Small cap index was up by 1.63%.

The top gaining sectoral indices on the BSE were PSU up by 2.13%, Metal up by 2.04%, Auto up by 1.89%, Industrials up by 1.88% and Oil & Gas up by 1.84%, while Telecom down by 2.26%, TECK down by 1.66% and IT down by 1.52% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 8.87%, Tata Motors - DVR up by 7.18%, Tata Steel up by 3.86%, NTPC up by 2.75% and Indusind Bank up by 2.72%. On the flip side, Bharti Airtel down by 3.58%, Infosys down by 2.23%, Tech Mahindra down by 2.12%, TCS down by 1.67% and Kotak Mahindra Bank down by 0.73% were the top losers.

Meanwhile, the Employees' Provident Fund Organisation (EPFO) will introduce an e-inspection system which will simplify the inspection process and ensure organizations with open communications will not be subject to physical inspection until absolutely necessary. The development has been confirmed by Central Provident Fund Commissioner Sunil Barthwal.

Barthwal also said that EPFO proposed to amend the Act to limit inquiry period to a maximum of two years in order to curtail harassment. Further, he noted that small percentage of employees are unable to generate UAN (a 12-digit Universal Account Number to all employees entitled to EPF) due to a mismatch in data and added that the EPFO is looking at alternative authentication vis-a-vis the employee database, to address this issue.

Besides, Central Provident Fund Commissioner proposed to set up a society of self-regulating consultants, similar to ICAI (The Institute of Chartered Accountants of India), in order to curb misuse and corruption.

The CNX Nifty traded in a range of 11,141.75 and 11,049.50. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 8.96%, Britannia up by 6.70%, Tata Steel up by 4.08%, Yes Bank up by 3.26% and NTPC up by 3.25%. On the flip side, Bharti Airtel down by 3.52%, Indiabulls Housing Finance down by 3.52%, Tech Mahindra down by 2.32%, Infosys down by 2.12% and Grasim Industries down by 1.61% were the top losers.

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.