Post Session: Quick Review

Indian equity benchmarks swung between gains and losses to end flat on Thursday despite positive developments on the global horizon. Earlier in the day, key indices opened higher, taking support from the report that foreign direct investment (FDI) equity inflows rose 28% in the first quarter of 2019-20 to $16.3 billion from $12.7 billion in the year-ago period. Singapore continued to be the top source of FDI at $5.3 billion, followed by Mauritius ($4.6 billion). Traders also took note of a report that India invited Russian companies to invest in its oil refining and petrochemical projects as the two nations vowed to increase energy cooperation going beyond LNG supplies and stakes in Russian oil and gas fields.

However, Indian equities lost early gains to turn negative in afternoon session, as traders turned cautious with CRISIL cutting India’s GDP growth to 6.3% in FY20. The global rating agency said that a growth of 5% in the first quarter of the ongoing fiscal corroborates that India’s economic slowdown is deeper and more broad-based than suspected. Sentiments remained dull as India Ratings and Research (Ind-Ra) believes India’s increased dependence on foreign portfolio investment (FPI) makes the country highly vulnerable to global shocks. The surplus generated in the services trade combined with remittances is insufficient to cover India’s trade deficit.

On the global front, Asian markets ended mostly higher on Thursday, while European markets were trading mostly in green, after China said it would hold trade talks with the US, raising hopes that the two countries will make progress on a dispute that has put major economies at risk of recession. Back home, auto stocks advanced after Transport Minister Nitin Gadkari said the government was considering a cut in the goods and services tax (GST) rate on hybrid vehicle.

The BSE Sensex ended at 36648.06, down by 76.68 points or 0.21% after trading in a range of 36541.88 and 36898.99. There were 19 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.15%, while Small cap index was up by 0.76%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.49%, Oil & Gas up by 2.38%, Auto up by 2.19%, PSU up by 2.18% and Utilities up by 2.09%, while Realty down by 1.74% and Bankex down by 0.91% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 8.04%, Tata Motors - DVR up by 7.11%, ONGC up by 5.00%, Yes Bank up by 4.71% and NTPC up by 3.35%. (Provisional)

On the flip side, HDFC down by 2.60%, ICICI Bank down by 2.16%, Kotak Mahindra Bank down by 1.38%, TCS down by 1.21% and Tech Mahindra down by 1.07% were the top losers. (Provisional)

Meanwhile, domestic rating agency Crisil has cut India’s current financial year (FY20) Gross domestic products (GDP) growth forecast to 6.3% from its earlier forecast of 6.9%. The agency said that lower GDP growth forecast corroborates that India’s economic slowdown is deeper and more broad-based than suspected. The downward review comes days after GDP growth slowed down to a 25-quarter low of 5% in the June quarter which significantly is even lower than Pakistan’s 5.4 percent growth and is due to the slump in private consumption and a near stalling of manufacturing activities.

It said that A plunge in domestic private consumption demand, slump in manufacturing, halving of merchandise exports growth, and a high-base effect from last year have gnawed away at first-quarter growth. Private consumption growth - the bulwark of India’s growth story in recent years - registered a scant 3.1% in the first quarter, a four-year low.

The last couple of times private consumption fell this sharply was in the first quarter of fiscal 2013 (-0.9%) and third quarter of fiscal 2015 (2.1%), as per the new GDP series. It said in the past few years, households had dipped into their savings and leveraged themselves to support private consumption though, first quarter data shows, they have not been able to sustain the momentum. It added that given the twin trouble of slack private consumption and manufacturing the remaining quarters are unlikely to over reach to take the full year number to its earlier forecast of 6.9%.

The CNX Nifty ended at 10847.70, up by 3.05 points or 0.03% after trading in a range of 10816.00 and 10920.10. There were 35 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 8.08%, Coal India up by 6.84%, ONGC up by 5.21%, BPCL up by 4.62% and Yes Bank up by 4.04%. (Provisional)

On the flip side, HDFC down by 2.66%, ICICI Bank down by 2.20%, Indiabulls Housing Finance down by 2.19%, TCS down by 1.41% and Kotak Mahindra Bank down by 1.27% were the top losers. (Provisional)

European markets were trading mostly in green; France’s CAC increased 51.89 points or 0.94% to 5,583.96 and Germany’s DAX rose 104.56 points or 0.87% to 12,129.60, while UK’s FTSE 100 was up by 41.45 points or 0.57% to 7,269.81.

Asian markets ended mostly higher on Thursday after reports that negotiating teams from China and the US will meet in Washington in early October to look for a solution to their yearlong trade dispute. Japanese shares ended higher as Hong Kong withdrew the contentious extradition bill that sparked recent protests. Chinese shares ended up on hopes that Beijing will cut lenders' reserve requirements again to shore up the economy.