Sensex, Nifty stage recovery to end higher

Indian equity bourses staged recovery to end the last trading day of the week on higher note, with the Sensex and the Nifty gaining over 250 and 50 points, respectively. After a positive start of the trading day, markets turned sluggish and traded in red terrain, ahead to the April-June quarter (Q1FY20) Gross Domestic Product (GDP) numbers to be out later in the day. However, in the second half of the session, key indices erased all of their losses, taking support from Union Home Minister Amit Shah’s statement that India's macroeconomic fundamentals are quite strong and its economy is currently growing at the fastest pace in the world.

Recovery on the street was also because of firm cues from global markets. Market participants took comfort with Union Finance Minister Nirmala Sitharaman’s statement that the Centre will announce two more big steps in the coming days to give momentum to industry. She said the government has decided to increase spending and has announced a slew of measures to arrest the sluggishness in the automobile market. Separately, Union Minister Prakash Javadekar, executing confidence that India will become a five trillion dollar economy in the next five years, said that good governance and zero corruption are needed for sustainable economic development in the country.

On the global front, European markets were trading in green, after New Zealand consumer confidence improved slightly in August. The survey data from ANZ showed that the ANZ-Roy Morgan consumer confidence index rose 2 points to 118 in August. The current conditions index rose 1 point to 127 and the future conditions index gained 2 points to 112. Asian markets ended mostly in green terrain, as South Korea's central bank maintained its key interest rate, as widely expected, after lowering it by a quarter-point last month to revive economy. The Monetary Policy Board of the Bank of Korea decided to leave the base rate unchanged at 1.50 percent.

Back home, auto industry stocks ended higher, despite ICRA's report that passenger vehicle sales in India is likely to decline in the range of 4-7% this fiscal saying agricultural output, revival in economic and industrial growth would be critical for auto sector's growth despite recent government measures to rekindle demand. Further, coal industry stocks remained in watch, after Fitch Solutions Macro Research said that India will overtake China as the largest importer of coking coal by 2025. The agency forecasts India's coking coal consumption to grow at an annual average rate of 5.4 percent between 2019 and 2028, driven by an equally robust expansion in steel production in the country.

Finally, the BSE Sensex gained 263.86 points or 0.71% to 37,332.79, while the CNX Nifty was up by 74.95 points or 0.68% to 11,023.25.

The BSE Sensex touched a high and a low of 37,397.97 and 36,829.81, 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 1.01%, while Small cap index was up by 0.84%.

The top gaining sectoral indices on the BSE were Metal up by 1.77%, FMCG up by 1.74%, Healthcare up by 1.69%, Realty up by 1.25% and Basic Materials up by 1.05%, while Power down by 0.59%, Capital Goods down by 0.46%, PSU down by 0.44%, Utilities down by 0.27% and Oil & Gas down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.75%, Sun Pharma up by 3.68%, Indusind Bank up by 3.41%, Tata Steel up by 2.80% and Hindustan Unilever up by 2.72%. On the flip side, Power Grid down by 2.12%, ONGC down by 1.78%, HCL Tech down by 1.31%, Kotak Mahindra Bank down by 1.28% and Larsen & Toubro down by 1.10% were the top losers.

Meanwhile, Crisil Research in its Agriculture Report 2019 has stated that farm profit from field crop is likely to increase 10-12 percent during kharif season 2019 due to expected higher prices and despite lower output. It also said that after three years of healthy growth, kharif output this time could fall 3-5% on the back of lower sowing acreage and yields being impacted by uneven distribution of rains.

The report pointed out that floods in Maharashtra, Odisha and Andhra Pradesh, and weak rains in West Bengal and the Marathwada region of Maharashtra are expected to affect productivity. Additionally, it said high-intensity rainfall in August is likely to increase pest attacks on maize and paddy further impacting productivity.

According to the report, lower kharif output is expected to push up mandi prices, and boost profitability of most crops, providing respite to farmers. It also said that some crops such as sugarcane would be an exception, with profit hit by lower acreage and productivity.

The CNX Nifty traded in a range of 11,042.60 and 10,874.80. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 5.23%, Sun Pharma up by 4.03%, Zee Entertainment up by 3.69%, Indusind Bank up by 3.48% and Tata Steel up by 3.32%. On the flip side, Bharti Infratel down by 3.23%, Coal India down by 2.28%, Eicher Motors down by 1.68%, ONGC down by 1.66% and Power Grid down by 1.64% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 22.91 points or 0.32% to 7,207.23, France’s CAC rose 43.66 points or 0.8% to 5,493.63 and Germany’s DAX was up by 117.87 points or 1% to 11,956.75.

Asian shares ended mostly higher on Friday, supported by signs that the US and China are set to resume trade talks in September. China's commerce ministry said on Thursday Beijing and Washington were discussing the next round of face-to-face talks scheduled for September, but added it was important for Washington to cancel a tariff increase. US President Trump also said some discussions were taking place on Thursday, ahead of a looming deadline for additional US tariffs on September 1. Japanese shares ended higher as the yen weakened following positive developments in the in the Sino-US trade war and investors digested a raft of mixed local economic data. Reports showed Industrial production in Japan rose a seasonally adjusted 1.3% sequentially in July, and beats forecasts for a 0.3% gain following the 3.3% drop in June. Japan's retail trade declined 2.3% in the month, and the jobless rate dipped to its lowest level in 27 years while overall consumer prices in the Tokyo region were up 0.6% year on year in August. Chinese shares ended down amid the ongoing mass protests in Hong Kong calling for political freedom and self-determination for the semi-autonomous territory, while investors awaited manufacturing data for directional cues.