Post Session: Quick Review

Bulls held a tight grip over the Dalal Street on Monday, with both Sensex and Nifty ending with strong gains. The start of the trading day was in green terrain, as India recorded the highest-ever exports of $95 billion during April-June, up 85 per cent Y-o-Y and 18 per cent higher than the first quarter of the fiscal year 2019-20. The merchandise exports grew 47 per cent Y-o-Y to $32.46 billion in June, driven by a robust demand of engineering goods, petroleum products, and gems and jewellery in the external markets.

Markets maintained their gaining momentum for the whole trading session, as sentiments remained positive with Commerce and Industry Minister Piyush Goyal’s statement that India has set a target of $400 billion merchandise exports for 2021-22 (FY22).  He mentioned ‘In collaboration with private industry, MSME sector, engineering, agriculture, automobile, steel sector, we have set an export target of $400 billion. We all will work together to achieve this target.’ Further, he said India's economy is growing and exports are also growing.

Finally, key indices ended at their intraday high points, as Prime Minister Narendra Modi described as ‘landmark’ the decision to include retail and wholesale trade as MSMEs, which will allow traders the benefits of priority sector lending, and said his government is committed to empowering the community. Besides, Union Finance Minister Nirmala Sitharaman has said that the government has been proactive in responding to the challenges caused by COVID-19 and is also taking up substantial reforms despite the pandemic.

On the global front, European markets were trading mostly in red with investors keeping a wary eye on the oil market, while the prospect of a bidding war for Wm Morrison sparked interest across the U.K. grocery sector. Asian markets ended mixed on Monday, after China's service sector expanded at a much slower pace in June as the recent uptick in COVID-19 cases and reduced travel dampened overall new business. The survey results published by IHS Markit showed that the Caixin services Purchasing Managers' Index fell notably to 50.3 in June from 55.1 in May. Nonetheless, the index has remained above the neutral 50 mark for the fourteenth successive month.

The BSE Sensex ended at 52880.00, up by 395.33 points or 0.75% after trading in a range of 52604.35 and 52919.17. There were 23 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.35%, while Small cap index was up by 0.78%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.84%, Metal up by 1.49%, Bankex up by 1.13%, PSU up by 1.09% and Basic Materials up by 1.01%, while Power down by 0.29% was the only losing index on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 1.92%, Tata Steel up by 1.84%, Larsen & Toubro up by 1.47%, Bajaj Finserv up by 1.38% and Axis Bank up by 1.26%. On the flip side, Tech Mahindra down by 1.34%, Dr. Reddy's Lab down by 0.65%, HCL Tech. down by 0.44%, Titan Co down by 0.20% and Bharti Airtel down by 0.18% were the top losers. (Provisional)

Meanwhile, India’s service sector remained into contraction territory in the month of June, as the emergence of the pandemic and the reintroduction of containment measures restricted demand. New work intakes and output contracted at the fastest rates since July 2020, which prompted companies to reduce employment again. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index fell to 41.2 in June from 46.4 in May. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - also eased to 43.1 in June from 48.1 in May.

Business activity and new orders decreased in four out of the five broad areas of the service economy, with the fastest rates of contraction registered in Consumer Services. Transport & Storage was the only segment to post growth. International demand for Indian services deteriorated further in June, with new export orders falling for the sixteenth consecutive month. The pace of contraction remained sharp, despite easing from May.

On the inflation front, firms reported that higher transportation and material costs continued to push-up average input prices. The rate of inflation was at a five-month low, but outpaced its long-run average. Finance & Insurance was the only category to record lower input prices. Services companies continued to share rising cost burdens with clients by lifting their selling prices in June.

The CNX Nifty ended at 15834.35, up by 112.15 points or 0.71% after trading in a range of 15762.05 and 15845.95. There were 34 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 3.59%, ONGC up by 2.11%, SBI up by 1.94%, Tata Steel up by 1.84% and Coal India up by 1.52%. On the flip side, HDFC Life Insurance down by 1.40%, Tech Mahindra down by 1.35%, Dr. Reddy's Lab down by 0.68%, BPCL down by 0.66% and Britannia down by 0.61% were the top losers. (Provisional)

European markets were trading mostly in red, France’s CAC decreased 3.96 points or 0.06% to 6,548.90 and Germany’s DAX was down by 41.94 points or 0.27% to 15,608.15. On the flip side, UK’s FTSE 100 increased 9.81 points or 0.14% to 7,133.08.

Asian markets ended mixed on Monday on worries about rising cases of the delta variant of the coronavirus globally. Japanese shares settled lower amid reports that the Japanese government is potentially keeping the quasi-state of emergency covering Tokyo in place during the Summer Olympics. Shares of Japanese conglomerate SoftBank Group plunged 5.39% after Chinese regulators claimed SoftBank-backed Didi illegally collected users’ personal data and ordered app stores to stop offering Didi’s app. However, Chinese shares finished higher after a survey showed the country's service sector expanded at a much slower pace in June. The Caixin/ Markit services Purchasing Managers’ Index for June came in at 50.3, a significant decline from May’s reading of 55.1.