Post Session: Quick Review

Indian equity benchmarks ended flat on Wednesday’s trading session. The start of the day was on a positive note, as positive comments by the World Health Organisation (WHO) chief scientist on the Covid-19 situation in India result in a relief rally on the bourses. He said coronavirus in India may be entering some kind of stage of endemicity where there is low or moderate level of transmission going on. Some support came in as Minister of State of Commerce and Industry Anupriya Patel said India is likely to record exports worth $46 billion to the ASEAN region. She noted that as one of the largest destinations for Indian exports, the Association of South East Asian Nations will be an important region for India in meeting the global export target of $400 billion in financial year 2021-22.

Markets remained higher for the most part of the session, taking support with Chief financial advisor (CEA) Krishnamurthy V Subramanian’s statement that India is well-poised to climate the ripple impact of taper tantrum if the US Federal Reserve begins to cut back its $120-billion-a-month quantitative easing later this year. Some optimism also came with private report stating that India has overtaken the United States (US) to become the second-most sought-after manufacturing destination globally, driven mainly by cost competitiveness. Meanwhile, Finance Secretary T V Somanathan has said the government is considering to introduce insurance bonds as an alternative to bank guarantees. Bank guarantees are usually asked for while extending a loan and typically require a collateral.

Domestic sentiments were positive, amid reports that stakeholders' interest is growing in non-financial performance of businesses and there is a deep realization that sustainability issues have a clear correlation with business outcomes and the ability of companies to create long-term value. However, in afternoon deals, key indices turned volatile and finally ended the trading day on a flat note. Gains got trimmed in the markets, as the Asian Development Bank (ADB) said that the coronavirus pandemic may have pushed as many as 80 million people in developing Asia into extreme poverty last year, threatening to derail progress on global goals to tackle poverty and hunger by 2030.

On the global front, European markets were trading higher with gains in travel stocks offsetting weak German business sentiment data, while global markets were range-bound ahead of a policy update from the U.S. Federal Reserve later this week. Asian markets ended mostly higher on Wednesday, even after business sentiment in South Korea ebbed in August, the latest survey from the Bank of Korea showed on Wednesday with a business confidence index score of 95.0 - down from 97.0 in July. The outlook for the following month rose by 4 points to 96. In the non-manufacturing sector, the BSI on business conditions for August was 81, up 2 points from the previous month. The outlook for the following month also rose by 3 points to 81.

The BSE Sensex ended at 55944.21, down by 14.77 points or 0.03% after trading in a range of 55899.96 and 56198.13. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.58%, while Small cap index up by 0.68%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.28%, Power up by 1.27%, Energy up by 1.12%, IT up by 0.81% and Industrials up by 0.70%, while Consumer Durables down by 1.09%, Telecom down by 0.82%, Realty down by 0.74%, Bankex down by 0.40% and Capital Goods down by 0.14% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 1.31%, Infosys up by 0.96%, Reliance Industries up by 0.89%, Nestle up by 0.38% and ITC up by 0.34%. On the flip side, Bajaj Finserv down by 3.51%, Titan Co down by 2.08%, Maruti Suzuki down by 1.36%, Bharti Airtel down by 1.19% and Tata Steel down by 1.01% were the top losers. (Provisional)

Meanwhile, emphasising the importance of Government and Industry working together to ‘create India’s own equity capital’, Union Minister of Finance and Corporate Affairs Nirmala Sitharaman has said that the Government is committed to working towards ensuring policy certainty. She also added that the regulators also had a key role in ensuring the same and the Government is working with them as well on this important issue.

Expressing the Government’s keenness to facilitate trends and sectors that are the future of the Indian economy, the Finance Minister acknowledged that there are seminal changes happening in the financial sector, which the government policy should facilitate. She said that the economy is moving gradually from a bank-led lending model to a more market-based finance model. Also once the Development Finance Institution is operational, it will perform the function of long-term lending which traditionally has been done by banks. Sitharaman added that this would increase competition for the banks and also improve their efficiency.

Besides, Sitharaman also emphasised on identifying how the sunrise sectors and start-ups can contribute to the future of India and how the Government could facilitate them. The Finance Minister said that this Government believes in listening, working and responding and would extend all possible support. Praising the risk-taking ability of the start-ups, Sitharaman urged industry to also come forward and take risks and assured Industry captains of addressing issues related to competitiveness including high power tariffs, and the issues related to cumbersome regulatory compliances.

The CNX Nifty ended at 16634.65, up by 10.05 points or 0.06% after trading in a range of 16617.50 and 16712.45. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports & SEZ up by 3.65%, HDFC Life Insurance up by 2.45%, Hindalco up by 2.34%, ONGC up by 2.16% and Coal India up by 1.95%. On the flip side, Bajaj Finserv down by 3.39%, Titan Co down by 2.51%, Maruti Suzuki down by 1.35%, Bharti Airtel down by 1.23% and JSW Steel down by 1.13% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 11.59 points or 0.16% to 7,137.37, France’s CAC increased 16.73 points or 0.25% to 6,681.04 and Germany’s DAX was up by 10.91 points or 0.07% to 15,916.76.

Asian markets ended mostly higher on Wednesday tracking record closing for US stocks overnight, while safe-haven US dollar hovered near its one-week lows versus major peers ahead of the US Federal Reserve’s Jackson Hole Economic symposium later in the week. Chinese shares ended higher after China’s central bank PBoC increased its short-term fund injection through open market operations (OMOs) to meet higher cash demand towards the month-end. However, Japanese shares ended marginally lower, driven by concerns about the worsening wave of new Covid-19 infections. The Japanese government decided to expand a state of emergency to eight more prefectures, taking the total to 21 in all, as the country sees sudden spike in critical cases.