Post Session: Quick Review

Indian equity benchmarks swung between green and red for most part of the day and witnessed sudden fall in final hour of trade which forced to close Thursday’s session near day’s low. The market indices snapped three-session gaining run, with Sensex and Nifty settling below their crucial 37,100 and 11,000 levels, respectively. Domestic indices made a positive start, taking support from report that Union minister Ravi Shankar Prasad termed the low Gross Domestic Product (GDP) growth as a ‘temporary phenomenon’, and said things will improve in future as the fundamentals of Indian economy are strong. However, some selling crept in with global rating agency Moody's statement that Indian non-banking financial companies (NBFCs) and housing finance companies (HFCs) are pulling back on loan against property (LAP) lending to micro, small and medium sized enterprises (MSMEs) because of the funding squeeze caused by the liquidity crisis in the country's financial sector.

Though, markets once again entered into green terrain and managed to trade above their neutral lines in afternoon session, as traders found solace with report that monsoon rains in India were above average. The IMD said that for the country as a whole, cumulative rainfall during this year's monsoon from June 01 till September 11 was 3% above the Long Period Average (LPA). But, key indices failed to hold recovery and witnessed sharp sell-off in late hour of trade, as anxiety remained among traders with Organization of the Petroleum Exporting Countries (OPEC) stating that it seems India's economic slowdown could continue for the next two to three years as the economy faces serious structural reform, which will hurt consumer demand and manufacturing. Investors also preferred to remain on sidelines ahead of key economic data -- July IIP and August CPI, to be announced after the market hours.

On the global front, Asian markets ended mixed on Thursday, while European markets were trading mostly in red, as investors look ahead to an anticipated announcement of easing measures from the European Central Bank (ECB). Back home, Auto stocks were in focus with Union minister Nitin Gadkari’s statement that it is up to the finance ministry along with state governments and GST Council to decide on reduction in GST rate for automobiles and that he has already spoken to the finance minister in this regard.

The BSE Sensex ended at 37080.64, down by 190.18 points or 0.51% after trading in a range of 37048.67 and 37435.15. There were 8 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index fell 0.21%, while Small cap index was up by 0.08%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 0.18%, Bankex up by 0.10%, Basic Materials up by 0.10% and Healthcare up by 0.08%, while Auto down by 1.84%, Telecom down by 1.78%, Energy down by 1.34%, Realty down by 1.12% and Consumer Discretionary Goods & Services down by 1.09% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 2.02%, Sun Pharma up by 1.39%, Indusind Bank up by 1.16%, HDFC Bank up by 0.91% and SBI up by 0.54%. (Provisional)

On the flip side, Yes Bank down by 5.38%, Tata Motors down by 4.61%, Tata Motors - DVR down by 4.55%, Maruti Suzuki down by 2.97% and Axis Bank down by 2.86% were the top losers. (Provisional)

Meanwhile, amid India’s economic growth slowdown, Union minister Ravi Shankar Prasad has termed the low Gross Domestic Product (GDP) growth as a ‘temporary phenomenon’, and expressed confidence that things will improve in future as the fundamentals of Indian economy are strong. He added that the government is taking all necessary steps to boost the economy. Talking about the 5% GDP growth registered in the first quarter of the current fiscal (Q1FY20), he said that global as well as local factors were responsible for it.

The minister said the fundamentals of Indian economy are very strong. While inflation is 3.15%, fiscal deficit is 3.4%. He said ‘we have kept both under control’. Moreover, he said India has attracted $16.30 billion of foreign investment in Q1 FY20, a rise of 28% as compared to same period of last year. Besides, the country’s foreign exchange reserves stand at $428 billion.

He further said that tax collection is also an important parameter. Income tax collection was Rs 10.02 lakh crore in 2017-18 against Rs 6.38 lakh crore in 2013-14. Even Goods and Services Tax (GST) collection for August 2019 was Rs 98,202 crore, increase of 4.51% from August 2018. Prasad also announced that from the next month, income tax notices will not be served directly to tax payers. Notices will be routed into a system which will take a call after examining them.

The CNX Nifty ended at 10981.05, down by 54.65 points or 0.50% after trading in a range of 10964.95 and 11081.75. There were 15 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing Finance up by 3.64%, Ultratech Cement up by 2.53%, ICICI Bank up by 2.00%, Hindalco up by 1.65% and Sun Pharma up by 1.26%. (Provisional)

On the flip side, Yes Bank down by 4.68%, Tata Motors down by 3.83%, Maruti Suzuki down by 3.01%, JSW Steel down by 2.79% and Axis Bank down by 2.77% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 decreased 1.61 points or 0.02% to 7,336.42 and France’s CAC fell 4.77 points or 0.08% to 5,613.29, while Germany’s DAX was up by 10.35 points or 0.08% to 12,369.42.

Asian markets exhibited mix trend on Thursday ahead of an impending European Central Bank (ECB) policy decision later in the day with new easing measures expected. Investors also looked ahead to the US Federal Reserve's two-day Federal Open Market Committee policy meeting next week, in which the central bank is expected to continue cutting interest rates. Chinese stocks edged higher as US President Donald Trump announced a short delay to scheduled tariff hikes on billions worth of Chinese goods in response to China's decision to exempt some US anti-cancer drugs and other goods from its tariffs. Moreover, Japanese Nikkei hit a four-month high as the yen continued to weaken amid signs of a thaw in trade tensions between the United States and China. Investors also welcomed data showing that core machine orders in Japan fell a seasonally adjusted 6.6 percent sequentially in July, beating street’s expectation for a fall of 8.1 percent following the 13.9 percent surge in June.