Post Session: Quick Review

23 Jul 2020 Evaluate

Indian equity benchmarks ended Thursday’s trading session with strong gains. After a cautious start of the trading day, indices remained positive for the whole day, taking support from Niti Aayog CEO Amitabh Kant’s statement that India will witness huge growth in digital lending as the COVID-19 pandemic has increased the acceptance of digital payments. Some support also came with Chief Economic Adviser (CEA) K V Subramanian’s statement that the government may announce more fiscal measures to boost demand once the uncertainty related to Coronavirus disease (COVID-19) pandemic wanes. Sentiments also got boost after private report stated that India is working on offering production-linked incentives for up to five sectors to boost domestic manufacturing.

Markets extended gains in noon deals, as calling for more investment in India, Prime Minister Narendra Modi said India is emerging as a land of opportunities. He added that stronger domestic economic capacities can ensure global resilience against external shocks. Sentiments were positive, even after a private report stating that consumers in India are cautious about spending in the wake of the coronavirus pandemic with 78 per cent of respondents claiming to reduce discretionary spending. However, consumers in tier-II and tier-III cities were almost two-times more optimistic on their spending habits than those in tier-I, hence it could be the next focus area to monitor spending habits.

On the global front, European markets were trading higher, as better-than-expected corporate earnings offset worries about rising cases of COVID-19 and a sharp escalation in tensions between the United States and China. Asian markets ended mixed on Thursday, as South Korea's gross domestic product was down a seasonally adjusted 3.3 percent on quarter in the second quarter of 2020. That missed forecasts for a decline of 2.3 percent following the 1.3 percent contraction in the previous three months. Real gross domestic income decreased by 2.0 percent on quarter.

The BSE Sensex ended at 38140.47, up by 268.95 points or 0.71% after trading in a range of 37738.59 and 38225.03. There were 21 stocks advancing against 8 stocks declining, while 1 stock remain unchanged on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.98%, while Small cap index was up by 0.61%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 2.36%, Healthcare up by 1.65%, Realty up by 1.55%, Auto up by 1.35% and Oil & Gas up by 1.31%, while IT down by 0.61%, TECK down by 0.59% and Telecom down by 0.31% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 3.28%, ICICI Bank up by 2.94%, Reliance Industries up by 2.82%, Tech Mahindra up by 2.49% and Kotak Mahindra Bank up by 2.14%. On the flip side, Axis Bank down by 3.80%, Hindustan Unilever down by 1.36%, Infosys down by 0.97%, TCS down by 0.88% and Larsen & Toubro down by 0.50% were the top losers. (Provisional)

Meanwhile, pointing towards positive signs on the revenue collection front, Economic Affairs Secretary Tarun Bajaj has said that monetisation of debt is not on the government's agenda at the moment. He said that revenues are going up and the government has also realised some extra revenue from excise on petrol and diesel.

Bajaj also underlined the government’s efforts in order to boost manufacturing, saying that the government has already announced production linked incentives for mobile and medical equipment and pharma. The government is working on extending the scheme to another 4-6 sunrise sectors with a lot of export potential.

Pinning hopes on the agriculture sector, he said that it is one bright spot even in this difficult period. Bajaj further noted that production of Rabi crop was good, and Kharif is also expected to be good. Although agriculture is not contributing to the GDP significantly, it still looks after about 40 per cent of population, who are directly dependent on this sector.

The CNX Nifty ended at 11215.45, up by 82.85 points or 0.74% after trading in a range of 11103.15 and 11239.80. There were 39 stocks advancing against 11 stocks declining on the index. (Provisional)

The top gainers on Nifty were Eicher Motors up by 4.99%, SBI up by 3.26%, ICICI Bank up by 2.93%, Reliance Industries up by 2.68% and Indian Oil Corporation up by 2.50%. On the flip side, Axis Bank down by 3.78%, Shree Cement down by 1.87%, Hindustan Unilever down by 1.65%, Infosys down by 1.08% and TCS down by 0.90% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 51.00 points or 0.82% to 6,258.10, France’s CAC increased 36.56 points or 0.73% to 5,073.68 and Germany’s DAX was up by 88.87 points or 0.68% to 13,193.12.

Asian markets ended mixed on Thursday due to escalating tensions between the world’s largest economies after the United States government ordered the closure of the Chinese consulate in Houston to protect Americans' intellectual property and private information. While, Beijing denounced the order as ‘outrageous’ and said it would draw a firm response if the decision was not reversed. Seoul shares ended down after data showed the country has fallen into recession for the first time in 17 years as exports plunged due to the corona virus pandemic. Meanwhile, Japanese market was closed for the Marine Day holiday.

Asian Indices	Last Trade	Change in Points	Change in %
Shanghai Composite	3,325.11	-8.05	-0.24
Hang Seng	25,263.00	205.06	0.82
Jakarta Composite	5,145.01	34.82	0.68
KLSE Composite	1,606.42	19.44	1.22
Nikkei 225	--	--	--
Straits Times	2,612.35	17.82	0.69
KOSPI Composite	2,216.19	-12.47	-0.56
Taiwan Weighted	12,413.04	-60.23	-0.48

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