Post Session: Quick Review

Extending their losing streak for second straight session, Indian equity benchmarks ended Thursday’s trade on a pessimistic note, with Sensex and Nifty settling below their crucial 37,100 and 11,000 levels, respectively. Markets traded on a weak note since the beginning, as traders were concerned on report that India Ratings lowered the country's growth forecast to six-year low of 6.7% for the current fiscal from an earlier estimate of 7.3% on account of slowdown in consumption and moderation in industrial growth among other factors. This would be the third consecutive year of subdued growth. Sentiments remained dampened with a private report stating that the Indian economy likely expanded at its slowest pace in more than five years in the April-June quarter, driven by weak investment growth and sluggish demand. Markets extended their fall in dying hour of trade, as investors remained on sidelines ahead of gross domestic product (GDP) data for the quarter ended June 30 due tomorrow. Investors ignored report that the government relaxed foreign direct investment (FDI) rule for foreign single-brand retailers and also permitted foreign investment in contract manufacturing and coal mining to boost the ailing economy.

On the global front, Asian markets ended mostly in green on Thursday, while European markets were trading in green, amid renewed hopes for progress in the trade dispute between the U.S. and China. Back home, sugar stocks were in focus as the government approved Rs 6,268 crore export subsidy for 60 lakh tonnes of sugar. A lump sum export subsidy of Rs 10,448 per tonne will be given to sugar mills in the 2019-20 marketing year (October-September), costing the exchequer Rs 6,268 crore as a subsidy.

The BSE Sensex ended at 37067.49, down by 384.35 points or 1.03% after trading in a range of 36987.35 and 37381.80. There were 11 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.11%, while Small cap index was down by 0.62%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.53%, Metal up by 1.30%, Oil & Gas up by 0.61%, Realty up by 0.56% and Utilities up by 0.54%, while Bankex down by 1.88%, Energy down by 0.86%, Auto down by 0.50%, Industrials down by 0.42% and Basic Materials down by 0.35% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 5.15%, NTPC up by 3.21%, Vedanta up by 2.38%, ONGC up by 1.65% and Asian Paints up by 0.93%. (Provisional)On the flip side, SBI down by 3.37%, HDFC down by 2.67%, Yes Bank down by 2.44%, Axis Bank down by 2.36% and Kotak Mahindra Bank down by 2.20% were the top losers. (Provisional)

Meanwhile, in order to boost the ailing economy, the government has liberalized foreign direct investment (FDI) norms in the four sectors. The Union Cabinet has allowed 100% FDI in coal mining and contract manufacturing, eased sourcing norms for single-brand retailers and approved 26% overseas investment in digital media. In single-brand retail trading (SBRT), the definition of 30% local sourcing norm has been relaxed and online sales permitted without prior opening of brick and mortar stores.

Commerce Minister Piyush Goyal has said that the changes in FDI policy will result in making India a more attractive FDI destination, leading to benefits of increased investments, employment, and growth. He said 100% FDI under automatic route in coal mining and sale of coal as also associated infrastructure activity has been allowed to help attract international players to create an efficient and competitive coal market. Also, 100 per cent FDI under automatic route has been allowed in contract manufacturing to give a big boost to domestic manufacturing.

Goyal said decisions of the Cabinet are aimed to liberalize and simplify the FDI policy to provide ease of doing business in the country, leading to larger FDI inflows and thereby contributing to the growth of investment, income and employment. FDI is a major driver of economic growth and a source of non-debt finance for the economic development of the country. The government has put in place an investor-friendly policy on FDI, under which investment up to 100% is permitted on the automatic route in most sectors/ activities. These reforms have led to total FDI into India reaching $286 billion in five years from 2014-15 to 2018-19 as compared to $189 billion in the previous five-years. At $64.37 billion, FDI in 2018-19 is the highest ever investment received for any financial year.

The CNX Nifty ended at 10961.40, down by 84.70 points or 0.77% after trading in a range of 10922.40 and 11021.10. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Sun Pharma up by 5.06%, Bharti Infratel up by 3.46%, JSW Steel up by 3.04%, Vedanta up by 2.61% and Coal India up by 2.54%. (Provisional)

On the flip side, SBI down by 3.33%, Yes Bank down by 3.19%, HDFC down by 2.63%, Axis Bank down by 2.27% and Kotak Mahindra Bank down by 2.21% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 79.44 points or 1.12% to 7,194.15, France’s CAC rose 77.27 points or 1.44% to 5,446.07 and Germany’s DAX was up by 140.19 points or 1.2% to 11,841.21.

Asian shares ended mostly higher on Thursday. Hong Kong shares closed on a positive note, recovering from three days of selling thanks to bargain-buying. Chinese shares slipped into the red as US-China trade worries persisted. The US Trade Representative’s office has reaffirmed President Donald Trump’s plans to impose an additional 5% tariff on a list of $300 billion of Chinese imports, with some starting on September 01. Japanese shares ended down on concerns that trade conflicts and UK's political uncertainty would hurt the global economy. British Prime Minister Boris Johnson has suspended parliament till middle October, curtailing any debate or moves on Brexit.