Post Session: Quick Review

Indian equity benchmarks ended Wednesday’s trading session on a positive note. After a positive start, indices traded volatile for the most part of the session, impacted with the Reserve Bank of India’s statement that the contraction in economic activity was likely to continue in the second quarter of the current fiscal as upticks witnessed in May and June appears to have lost strength following re-imposition of lockdowns to contain the coronavirus pandemic. Some concern also came with rating agency ICRA’s report that the economy is expected to contract by 25 per cent each in the first quarter of FY'21 both in terms of GDP (gross domestic product) as well GVA (gross value added).

However, in the last hours of the trading session, markets gained traction to end near their intraday high points, taking support with reports that Moody's Investors Service said India, China and Indonesia will be the only G-20 emerging economies to post a strong enough pick up of real GDP in the second half of 2020, and retained its projection of 3.1 per cent growth contraction for India in 2020. Adding more relief among market participants, Finance Minister Nirmala Sitharaman said that the government is open to further tweaking the Rs 3 lakh crore credit guarantee scheme for providing collateral-free loans to small businesses.

On the global front, European markets were trading mostly in green as hopes of additional stimulus for Germany and France outweighed worries about rising cases of COVID-19 across the continent. Asian markets ended mixed on Wednesday, after Japan's services producer price inflation accelerated in July. The data from the Bank of Japan showed that the corporate services producer price index advanced 1.2 percent on a yearly basis in July, faster than the 0.9 percent increase seen in June. This was the highest rate in four months. On a monthly basis, the services PPI inflation rose to 0.4 percent from 0.3 percent in June. Excluding international transportation, services producer price inflation climbed to 1.3 percent from 1 percent a month ago. Month-on-month, the index gained 0.4 percent in July.

The BSE Sensex ended at 39073.92, up by 230.04 points or 0.59% after trading in a range of 38765.09 and 39111.55. There were 18 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.38%, while Small cap index was up by 0.69%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 2.09%, Auto up by 1.50%, Bankex up by 1.50%, IT up by 1.02% and Realty up by 0.89%, while Telecom down by 2.01%, Capital Goods down by 0.44%, Basic Materials down by 0.19%, FMCG down by 0.09% and Healthcare down by 0.08% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 5.93%, Reliance Industries up by 2.63%, Axis Bank up by 2.58%, Kotak Mahindra Bank up by 2.49% and Bajaj Auto up by 2.25%. On the flip side, Bharti Airtel down by 2.66%, Ultratech Cement down by 2.10%, Asian Paints down by 1.42%, Maruti Suzuki down by 1.28% and Larsen & Toubro down by 1.19% were the top losers. (Provisional)

Meanwhile, raising concerns over economic recovery, the Reserve Bank of India (RBI) in its latest report has said that the contraction in economic activity is likely to continue in the second quarter of the current fiscal as upticks witnessed in May and June appears to have lost strength following re-imposition of lockdowns to contain the coronavirus pandemic.

RBI expressed need for 'deep-seats and wide-ranging' reforms to regain losses and return to the path of sustainable economic growth. It further said that an assessment of aggregate demand during the year so far suggests that the shock to consumption is severe, and it will take quite some time to mend and regain the pre-COVID-19 momentum.

Meanwhile, the National Statistical Office is scheduled to release its estimates of GDP for the first quarter of this fiscal on August 31. RBI did not give out economic growth projections in the annual report as is usual.

The CNX Nifty ended at 11549.60, up by 77.35 points or 0.67% after trading in a range of 11461.85 and 11561.75. There were 32 stocks advancing against 18 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 8.50%, Hero MotoCorp up by 6.43%, Indusind Bank up by 5.81%, Zee Entertainment up by 5.78% and Reliance Industries up by 2.65%. On the flip side, Bharti Airtel down by 2.68%, Ultratech Cement down by 2.22%, Britannia Inds down by 1.73%, Asian Paints down by 1.46% and Maruti Suzuki down by 1.42% were the top losers. (Provisional)

European markets were trading mostly in green, France’s CAC increased 16.10 points or 0.32% to 5,024.37, Germany’s DAX increased 70.67 points or 0.54% to 13,132.29. On the flip side, UK’s FTSE 100 decreased 1.90 points or 0.03% to 6,035.11.

Asian markets ended mixed on Wednesday ahead of Federal Reserve Chair Jerome Powell's highly anticipated speech at the annual Jackson Hole symposium later this week, which could reveal the next steps for monetary policy. Chinese shares ended down, despite optimism around trade negotiations between Beijing and Washington. Japanese shares ended unchanged due to concerns for the health of Japanese Prime Minister Shinzo Abe, while a weaker yen and renewed hopes for corona virus treatment supported sentiment. Seoul shares ended marginally higher even after increasing new corona virus cases in the country.