Key indices settle on flat note on Friday

Oscillating between gains and losses, Indian equity benchmarks pulled back from their all-time highs to settle on a flat note on Friday due to selloffs mainly in IT, TECK and Banking counters amid lack of directional cues from global markets. Indian market opened with gains, as traders took encouragement with the Reserve Bank of India’s (RBI) report that the tapering of the second wave, coupled with an aggressive vaccination push, has brightened near-term prospects for the Indian economy, and the Indian economy may have grown 22.1 per cent in the April-June quarter. Some optimism also came with the data released by the Commerce Ministry showed that the country's exports rose by 48.34 per cent to $32.5 billion on account of healthy growth in shipments of petroleum products, gems and jewellery, and chemicals, leather and marine goods.

However, markets failed to maintain gains and ended flattish as India recorded a spike of 39,072 fresh Covid-19 cases in the last 24 hours, taking the total caseload to 31,025,875, according to Worldometer. The death count increased to 412,563 with 544 new fatalities. Traders overlooked a private report stating that the June inflation data showed annual retail price growth steady at 6.26 percent versus 6.3 percent in May. This takes off pressures upon the central bank, which was battling apprehensions of higher inflation risks soon after its June 4 review. Meanwhile, Ministry of Finance has released Rs 75,000 crore to the States and Union Territories (UTs) with legislature under the back-to-back loan facility in lieu of Goods and Services Tax (GST) compensation. This release is in addition to normal GST compensation being released every 2 months out of actual cess collection.

On the global front, Asian markets ended mixed on Friday as concerns about resurging new COVID-19 cases and rising tensions between China and the U.S offset investor optimism over a combination of soothing comments on inflation from Fed Chair Jerome Powell and U.S. European markets were trading mostly in red as investors digested a slew of earnings and looked ahead to the release of U.S. retail sales and consumer sentiment figures later in the day for more clues on the economic outlook. Back home, banking stocks were in focus as RBI data showed that bank credit grew by 6 per cent to Rs 109.31 lakh crore and deposits increased by 9.76 per cent to Rs 154.51 lakh crore in the fortnight ended July 2.

Finally, the BSE Sensex fell 18.79 points or 0.04% to 53,140.06, while the CNX Nifty was down by 0.80 points or 0.01% to 15,923.40.  

The BSE Sensex touched high and low of 53,290.81and 52,997.09, respectively and there were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose by 0.45%, while Small cap index was up by 0.38%.

The top gaining sectoral indices on the BSE were Telecom up by 2.47%, Realty up by 1.27%, Metal up by 1.20%, Healthcare up by 1.12% and Energy up by 1.00%, while IT down by 0.99%, TECK down by 0.73% and Bankex down by 0.47% were the few losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.94%, Ultratech Cement up by 1.95%, Tata Steel up by 1.77%, Power Grid Corp up by 1.50% and Reliance Industries up by 1.37%. On the flip side, HCL Technologies down by 3.38%, Infosys down by 1.60%, Bajaj Finserv down by 1.56%, ICICI Bank down by 1.06% and NTPC down by 1.04% were the top losers.

Meanwhile, he Reserve Bank of India’s (RBI) latest article said the tapering of the second wave of the COVID-19 pandemic coupled with aggressive vaccination has brightened the near-term prospects of the Indian economy, though a solid increase in aggregate demand may take some time.

Attributing the rise in inflation to the supply side disruptions on account of the pandemic and hardening of commodity prices in the international market, the RBI article opined that these factors should ease over the year as supply-side measures take effect. It said the pick-up in inflation is driven largely by adverse supply shocks due to disruptions caused by the pandemic, including increases in margins and taxes.

Furthermore, it said ‘a solid increase in aggregate demand is yet to take shape. Even with a 9.5 per cent GDP growth in 2020-21, there will be substantial slack in the economy and demand pressures may take some more time to become evident.’

The CNX Nifty traded in a range of 15,962.25 and 15,882.60 and there were 23 stocks advancing against 26 stocks declining, while 1 stock remain unchanged on the index. 

The top gainers on Nifty were Divi's Lab up by 3.46%, Bharti Airtel up by 2.95%, Ultratech Cement up by 1.82%, Tata Steel up by 1.50% and Power Grid Corporation up by 1.35%. On the flip side, HCL Technologies down by 3.25%, Eicher Motors down by 1.81%, Infosys down by 1.52%, Bajaj Finserv down by 1.49% and Adani Ports & SEZ down by 1.44% were the top losers. 

European markets were trading mostly in red; France’s CAC decreased 33.06 points or 0.51% to 6,460.30 and Germany’s DAX decreased 9.80 points or 0.06% to 15,619.86, while UK’s FTSE 100 increased 14.62 points or 0.21% to 7,026.64.

Asian markets ended mixed on Friday as concerns about continued resurgence of coronavirus infections dented investor sentiment. Chinese shares ended lower amid rising tensions between China and the US. Reports showing that the US Biden administration is set to issue an advisory cautioning its companies about the risks of doing business in Hong Kong as China continues to clamp down on political and economic freedoms in the territory. Japanese shares declined as the Bank of Japan (BoJ) downgraded its real GDP forecast for 2021 to 3.8% growth against 4% growth forecast made in April, but maintained its monetary stimulus unchanged.