Post Session: Quick Review

Indian equity benchmarks ended at fresh record closing highs on Tuesday. Markets made a cautious start of the trading day, as stock brokers' association Anmi has said shifting to the T+1 settlement system would make India a pre-funding market, and global institutional investors will face multiple issues with the structure. Currently, trades on the Indian stock exchanges are settled in two working days after the transaction is done (T+2).

However, key indices remained higher for the most part of the trading session, as exports from special economic zones (SEZs) grew by about 41.5 per cent to reach Rs 2.15 lakh crore during the April-June quarter of the current fiscal (Q1FY22) driven by healthy growth in pharmaceuticals, engineering, and gems and jewellery sectors. SEZs are key export hubs which contribute about one-fourth of the country's total outbound shipments.

Traders took support with private report that economic growth to be in the range of 14 per cent to 23 per cent for the first quarter of the current financial year. The growth was projected on a low base of 24.4 per cent contraction in the gross domestic product in Q4 of the previous financial year. Some support came with another private report stating that the overall hiring activity in India has touched pre-pandemic level and going ahead consumption economy will play an important role in driving job growth further.

In the second half of the trading session, markets added gains to end the trading day on a strong note. Adding optimism among traders, a private report stated that business resumption activity continued its northward journey and reached a new high, much above the pre-pandemic levels for the week ended August 29. The Nomura India Business Resumption Index rose to 102.7 for the week ending 29 August from 101.3 in the prior week.

On the global front, European markets were trading mostly in green on course for their seventh straight month of gains, as hopes for more policy support overshadowed economic risks from a surge in COVID-19 cases caused by the Delta variant globally. Asian markets settled mostly higher on Tuesday, despite China's service sector contracted in August amid the renewed virus flare-up. The official survey results from the National Bureau of Statistics showed that the official non-manufacturing Purchasing Managers' Index, which measures the performance of the services and construction sectors, declined to 47.5 in August from 53.3 a month ago. A reading below 50 indicates contraction in the sector.

The BSE Sensex ended at 57552.39, up by 662.63 points or 1.16% after trading in a range of 56859.10 and 57625.26. There were 27 stocks advancing against 3 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.83%, while Small cap index up by 0.86%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 4.90%, TECK up by 1.62%, Consumer Durables up by 1.54%, Utilities up by 1.50% and Healthcare up by 1.30%, while there were no losing sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 6.99%, Bajaj Finance up by 4.94%, Bajaj Finserv up by 3.34%, Asian Paints up by 3.03% and Titan Co up by 2.32%. On the flip side, Nestle down by 1.29%, Indusind Bank down by 1.14% and Reliance Industries down by 0.47% were the only losers. (Provisional)

Meanwhile, the Department of Expenditure, Ministry of Finance has released an amount of Rs. 13,385.70 crore to 25 States for providing grants to the Rural Local Bodies.  This Grant-in-aid is the 1st installment of Tied grants of the year 2021-22. The grants have been released as per the recommendations of the 15th Finance Commission.

Out of the total Grant-in-aid allocated for Panchayati Raj institutions, 60 percent is ‘Tied Grant’.  It’s earmarked for national priorities like drinking water supply, rainwater harvesting and sanitation. Remaining 40 percent is ‘Untied Grant’ and is to be utilized at the discretion of the Panchayati Raj institutions for location specific felt needs, except for payment of salaries.

As per the notification, the States are required to transfer the grants to the Rural local bodies within 10 working days of their receipt from the Union Government.  Any delay beyond 10 working days requires the State Governments to release the grants with interest.

The CNX Nifty ended at 17132.20, up by 201.15 points or 1.19% after trading in a range of 16915.85 and 17153.50. There were 44 stocks advancing against 6 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 7.03%, Bajaj Finance up by 5.01%, Eicher Motors up by 4.91%, Hindalco up by 4.52% and Shree Cement up by 4.16%. On the flip side, Tata Motors down by 1.59%, Nestle down by 1.39%, Indusind Bank down by 1.26%, Reliance Industries down by 0.53% and BPCL down by 0.19% were the top losers. (Provisional)

European markets were trading mostly in green, France’s CAC increased 3.35 points or 0.05% to 6,690.65 and Germany’s DAX was up by 80.02 points or 0.5% to 15,967.33. On the flip side, UK’s FTSE 100 was down by 10.08 points or 0.14% to 7,137.93.

Asian markets settled mostly higher on Tuesday as investors took the US Fed chief Jerome Powell's speech at Jackson Hole Symposium as a sign the Fed will keep supporting the market with low interest rates. Although, concerns over surging corona-virus cases in the Asian region and continuing regulatory clampdown in China pressurizing market sentiments. Chinese gaming stocks listed in the US came under pressure after regulators in Beijing introduced new rules that limit the number of hours kids can play online video games. Official data showed that activity in China’s services sector slipped into contraction in August. Japanese shares gained after reports that Japanese Prime Minister Yoshihide Suga is considering replacing the ruling party's powerful secretary-general, Toshihiro Nikai, as the Japanese leader struggles with low approval ratings amid surging coronavirus infections.