Post Session: Quick Review

Indian equity benchmarks ended flat with a negative bias on Tuesday. After a cautious start, key indices remained weak for the whole trading session, after domestic credit ratings agency Crisil has cut India’s gross domestic product (GDP) growth forecast to 9.5 per cent for the current fiscal (FY22) as compared to 11 percent projected earlier due to the hit to private consumption and investments following the second wave of COVID-19. It joins other watchers who have cut their FY22 growth projections, with some pegging it as low as 7.9 percent. The economy had contracted by 7.3 percent in FY21.

Markets remained volatile during the trading session and finally ended the day in red terrain, as PHD Chamber of Commerce and Industry (PHDCCI) in its latest survey pointed out that businesses are struggling with rising cost of raw materials amid the second COVID wave as restrictions in many parts of the country have disrupted supply chains and also impacted the pace of economic recovery. In a survey, the industry body said that going ahead, a substantial stimulus to push the growth of the Indian economy impacted by the second wave of the pandemic would be crucial.

However, losses were limited, as Fitch Solutions held an optimistic outlook for the Indian consumer over 2021 with real growth in household spending forecast at 9.1 per cent year-on-year. This marks the start of a recovery from the negative 9.3 per cent year-on-year contraction over 2020. Besides, the government pledged to provide free COVID-19 vaccines to all adults, in an effort to rein in a pandemic that has killed hundreds of thousands. Also, daily COVID-19 cases in India have been on a downward trend since early May, with data from the health ministry on Tuesday showing 86,498 infections in the last 24 hours.

On the global front, European markets were trading mostly in green, as investors look ahead to euro zone growth and employment data for the first quarter, and remain focused on concerns over rising inflation. Asian markets ended mostly lower on Tuesday, after Japan's gross domestic product shrank an annualized 3.9 percent on year in the first quarter of 2021, the Cabinet Office said in Tuesday's final reading. That exceeded expectations for a decline of 4.8 percent following the 11.7 percent surge in the three months prior.

The BSE Sensex ended at 52275.57, down by 52.94 points or 0.10% after trading in a range of 52135.04 and 52432.43. There were 14 stocks advancing against 16 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 0.93%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 1.72%, IT up by 1.41%, TECK up by 1.34%, Healthcare up by 1.02% and Realty up by 0.99%, while Metal down by 1.38%, Bankex down by 0.96%, PSU down by 0.51%, Energy down by 0.35% and Capital Goods down by 0.29% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tech Mahindra up by 2.53%, Bharti Airtel up by 1.91%, HCL Tech. up by 1.83%, Infosys up by 1.68% and Titan Co up by 1.63%. On the flip side, SBI down by 1.21%, HDFC down by 1.18%, Kotak Mahindra Bank down by 1.11%, HDFC Bank down by 1.01% and Power Grid down by 0.93% were the top losers. (Provisional)

Meanwhile, Fitch Solutions in its latest report has held an optimistic outlook for the Indian consumer over 2021 with real growth in household spending forecast at 9.1 per cent year-on-year. This marks the start of a recovery from the negative 9.3 per cent year-on-year contraction over 2020.

As per the report, the real value of total household spending will remain below pre-Covid-19 levels (2019) with real household spending forecast to reach a total of Rs 73.3 lakh crore in 2021 compared to Rs 74 lakh crore in 2019.

The report further noted that households' disposable income this year will grow to Rs 416,400 and surpass pre-Covid-19 levels of Rs 408,800 which will help support domestic demand. However, inflationary pressures may weigh down on spending which will average at 5 per cent in 2021, outpacing income growth.

The CNX Nifty ended at 15740.10, down by 11.55 points or 0.07% after trading in a range of 15680.00 and 15778.80. There were 27 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tech Mahindra up by 2.26%, Tata Motors up by 2.10%, Bharti Airtel up by 1.93%, HCL Tech. up by 1.85% and Indian Oil Corp. up by 1.74%. On the flip side, Hindalco down by 1.84%, Tata Steel down by 1.56%, HDFC down by 1.21%, Kotak Mahindra Bank down by 1.18% and SBI down by 1.17% were the top losers. (Provisional)

European markets were trading mostly in green, UK’s FTSE 100 increased 3.70 points or 0.05% to 7,080.92 and France’s CAC was up by 1.69 points or 0.03% to 6,545.25. On the flip side, Germany’s DAX was down by 17.32 points or 0.11% to 15,659.83.

Asian markets ended mostly lower on Tuesday ahead of US inflation data later this week that could provide more indications about the Fed's policy outlook, while some investors standing by on news of a global minimum corporate tax rate. Japanese shares ended lower even as the Japanese government revised the contraction of the gross domestic product (GDP) for the first quarter of 2021 to 1 percent, 0.3 percent less than the preliminary data published in May. Moreover, Chinese shares ended down as investors worried about lofty valuations and lingering Sino-US tensions.