Post Session: Quick Review

Indian equity benchmarks ended at fresh record closing highs on Friday’s trading session. After a positive start of the trading day, key indices traded in green terrain, as the commerce ministry's provisional data showed that India's exports jumped 45.17 per cent to $33.14 billion in August as against $22.83 billion in the same month last year. Adding optimism, Reserve Bank of India's deputy governor M Rajeshwar Rao said the account aggregator ecosystem in the country is in a nascent stage and there is a need for its orderly growth.

However, some volatility witnessed over the Dalal Street during the trading session, due to a consistent rise in the coronavirus cases and fear of a third Covid wave is driving investors towards defensive bets. India reported over 45,000 new cases of Covid-19 in the last 24 hours. This was also the biggest single-day rise in two months. Some concerns came with Ratings agency ICRA’s statement that fiscal balances of 19 states in the quarter ended June of current financial year (Q1FY22) are weaker than pre-Covid levels with milder recovery in revenue and spending.

But, markets managed to trade in green for the most part of the trading session and added more gains in the last hour of the trade to end on a higher note, as traders got relief, after India's services sector expanded in August at the fastest pace in one-and-a-half years amid strong inflows of new work and improved demand conditions. The seasonally adjusted India Services Business Activity Index rose from 45.4 in July to 56.7 in August, as the reopening of several establishments and increased consumer footfall boosted sales.

Some support also came after the Ministry of Health and Family Welfare said that more than 4.36 crore balance and unutilised COVID-19 vaccine doses are still available with the states and union territories to be administered.  Over 65 crore vaccine doses have been provided to states and union territories so far through all sources and a further 1,20,95,700 doses are in the pipeline. Also, foreign institutional investors (FIIs) stood as net buyers in the capital market as they purchased shares worth Rs 348.52 crore on Thursday, as per provisional exchange data.

On the global front, European markets were trading mostly in green as investors await the release of key U.S. employment data, which could influence future Federal Reserve monetary policy. Asian markets ended mostly higher on Friday, even after China's service sector signaled a renewed fall in business activity in August as rising coronavirus infection at home and abroad weighed on operations and demand. The survey results from IHS Markit showed that the Caixin services Purchasing Managers' Index fell to 46.7 in August from 54.9 in July. A reading below 50 indicates contraction in the sector.

The BSE Sensex ended at 58129.95, up by 277.41 points or 0.48% after trading in a range of 57764.07 and 58194.79. There were 19 stocks advancing against 11 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 up by 0.41%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 3.60%, Oil & Gas up by 2.25%, Metal up by 1.27%, PSU up by 1.19% and Consumer Durables up by 1.05%, while Telecom down by 0.52%, FMCG down by 0.22% and Bankex down by 0.16% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 4.12%, Titan Co up by 2.59%, Tata Steel up by 1.27%, Bajaj Auto up by 1.18% and Maruti Suzuki up by 1.06%. On the flip side, Hindustan Unilever down by 1.18%, Bharti Airtel down by 1.17%, HDFC Bank down by 0.85%, HDFC down by 0.68% and Indusind Bank down by 0.67% were the top losers. (Provisional)

Meanwhile, India’s service sector growth resumed in the month of August as the pandemic continued to recede and vaccine access improved. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index stood at 56.7 in August from 45.4 in July. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services – stood at 55.4 in August, from 49.2 in July.

Companies indicated that the reopening of several establishments and increased consumer footfall boosted sales, which in turn supported the first expansion in output in four months and a rebound in business confidence. The data showed that firms had ample capacity to deal with rising new orders, however, which was a factor that prevented job creation.

On the price front, service providers indicated that higher fuel, retail and transport prices pushed up their expenses in August. Overall input costs increased at the strongest rate in four months and one that outpaced its long-run average. Charges levied by services companies likewise increased in August. That said, the rate of inflation softened to the weakest since March and was only marginal.

The CNX Nifty ended at 17323.60, up by 89.45 points or 0.52% after trading in a range of 17212.20 and 17340.10. There were 35 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Reliance Industries up by 4.10%, ONGC up by 3.75%, Coal India up by 3.35%, Indian Oil Corp. up by 2.68% and Titan Co up by 2.65%. On the flip side, HDFC Life Insurance down by 3.24%, Cipla down by 1.48%, Hindustan Unilever down by 1.23%, Bharti Airtel down by 1.21% and HDFC Bank down by 0.81% were the top losers. (Provisional)

European markets were trading mostly in green, UK’s FTSE 100 increased 11.67 points or 0.16% to 7,175.57 and Germany’s DAX was up by 14.43 points or 0.09% to 15,855.02. On the flip side, France’s CAC was down by 19.01 points or 0.28% to 6,744.07.

Asian markets ended mostly higher on Friday, tracking modest gains on Wall Street overnight as jobless claims and trade balance figures showed that the US economic recovery remains on track. Meanwhile, global investors are waiting for the latest US jobs report, due later in the day for clues about the Fed's timelines for asset tapering and interest rate hikes. Japanese shares gained after reports that Japanese Prime Minister Yoshihide Suga will step down as prime minister later this month after failing to control the Covid-19 outbreak, setting the stage for his replacement after just one year in office. However, Hong Kong shares ended lower amid profit booking despite data showing that the private sector in Hong Kong expanded at a faster pace in August, the latest survey from Markit Economics showed with a PMI score of 53.3, up from 51.3 in July. Chinese shares declined due to concerns about slowdown in the world’s second-largest economy, although brokerage shares outperformed after China announced plans to set up its third mainland stock exchange in its capital, Beijing, to serve small-and medium-sized enterprises.