Post Session: Quick Review

Friday’s trading session turned out to be extremely sanguine for local equity markets and concluded near day’s highest point, on the back of widespread buying by participants along with firm cues from the global markets. Markets made gap-up opening and traded with traction, taking support from report that union minister of state for heavy industries and public enterprises, Arjun Ram Meghwal’s statement that the government will do everything to ensure that the economy remains on track and is not weakened so that the country reaches its target of $5 trillion economy. Some encouragement also came in with Prime Minister Narendra Modi’s statement that India is committed to becoming a $5 trillion economy by 2024. Traders took note of a report that Prime Minister Narendra Modi will launch the farmers’ pension scheme Pradhan Mantri Kisan Maan-Dhan Yojana (PM-KMY) from Ranchi on September 12 with a subscriber base of more than one million.

Markets extended northward moment in the last leg of trade, as traders remained optimistic with Agriculture Minister Narendra Singh Tomar’s statement that the condition of Kharif (summer-sown) crops is good and the country is likely to have bumper production of foodgrains. Traders also took a note of Union Minister Nitin Gadkari’s statement that the government will soon take a call on the recommendations of U K Sinha committee, in order to strengthen micro, small and medium enterprises (MSME) sector. Investors paid no heed towards CARE Ratings revised India’s GDP growth forecast on account of subdued growth in the industrial sector and weakness in the agricultural sector during Q1FY20. The rating agency cut the GDP estimate downward from 6.7-6.8% earlier to 6.4-6.5% for FY20 with the underlying GVA growth of 6.3-6.4%. 

On the global front, Asian markets ended mostly higher on Friday, European markets were trading in green, as the upbeat US economic data and hopes of a thaw in the US-China trade war boosted risk appetite among investors. Back home, the Auto sector were in focus as Automotive industry body SIAM sought government intervention to help the sector in smooth transition to BS-VI emission norms from April next year, and said that the prospect of abrupt stoppage of manufacturing and sales of BS-IV vehicles overnight posed a monumental' challenge.  

The BSE Sensex ended at 36978.63, up by 334.21 points or 0.91% after trading in a range of 36727.66 and 37012.98. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.62%, while Small cap index was up by 0.79%.

The top gaining sectoral indices on the BSE were Auto up by 2.62%, Power up by 2.15%, Metal up by 2.10%, Utilities up by 1.81% and Energy was up by 1.56%, while Realty down by 0.77% and FMCG was down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 3.91%, Tech Mahindra up by 3.64%, Axis Bank up by 3.46%, Tata Motors - DVR up by 3.28% and NTPC was up by 3.24%.

On the flip side, Yes Bank down by 2.50%, Sun Pharma down by 1.72%, HCL Tech down by 1.07%, TCS down by 0.71% and Hindustan Unilever was down by 0.58% were the top losers.

Meanwhile, CARE Ratings has revised the India’s Gross domestic products (GDP) estimate downward from 6.7-6.8% earlier to 6.4-6.5% for current financial year (FY20) with the underlying gross value added (GVA) growth of 6.3-6.4% on account of subdued growth in the industrial sector and weakness in the agricultural sector during Q1FY20.  The agency mentioned that in the light of sharp economic growth slowdown in Q1FY20 and with consumption and investments unlikely to see a sharp upward shift, the improvement in the economic growth would only be gradual and limited. India recorded a dismal GDP growth of 5% in the first quarter of the ingoing fiscal, on account of slower growth in manufacturing sector.

Besides, it said ‘110 bps interest rate cut by the Reserve Bank of India (RBI). The RBI has mandated banks to link all their fresh loans extended to retail and MSME sector to an external benchmark from October 1, 2019. The impact will be seen on the incremental loans extended to these sectors and will help facilitate transmission mechanism.The agency also expects the demand to pickup in the festive season. Even favourable monsoons may come out good for rural incomes. Better business environment on account of the recent measures announced by the government including efforts to improve the flow of credit as well as transmission mechanism.

The CNX Nifty ended at 10945.20, up by 97.30 points or 0.90% after trading in a range of 10867.45 and 10957.05. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 4.03%, Tech Mahindra up by 3.66%, Tata Steel up by 3.43%, NTPC up by 3.36% and Axis Bank was up by 3.30%.

On the flip side, Indiabulls Housing Finance down by 4.89%, Yes Bank down by 2.26%, Sun Pharma down by 1.73%, Wipro down by 1.41% and HCL Tech was down by 1.19% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 6.54 points or 0.09% to 7,277.71, France’s CAC rose 14.43 points or 0.26% to 5,607.80 and Germany’s DAX was up by 47.99 points or 0.4% to 12,174.77.

Asian markets ended mostly higher on Friday on reports that China and the United States agreed to hold high-level talks in early October in Washington. Hong Kong shares ended up, despite global rating agency Fitch Ratings downgrading Hong Kong's long-term foreign currency issuer default rating. The rating agency observed that ongoing demonstrations have done long-lasting damage to international perceptions about the effectiveness of Hong Kong's governance system and rule of law. Further, Japanese shares closed higher amid comments from Bank of Japan Governor Haruhiko Kuroda suggesting that cutting interest rates further into the negative zone is always an option, while the  yen retreated against the dollar as investors bid up riskier assets.