Post Session: Quick Review

Indian equity benchmarks ended higher on Tuesday. Markets made a positive start of the trading day, as the government data showed that India's retail inflation in August marginally eased to 5.3%, staying within Reserve Bank of India's comfort zone for a second month. Inflation in the food basket was 3.11% in August compared to 3.96% in the preceding month. Addition optimism, Union finance minister Nirmala Sitharaman has reiterated that the disinvestment plan of the government was on track and the Development Finance Institution (DFI), announced in the Budget, will become operational soon.

Markets remained higher during the trading session, as sentiments remained positive with India Ratings and Research’s report stated that inflation rates are expected to decline till at least November this year. The retail inflation in August 2021 declined both sequentially and on a year-over-year basis to 5.30 per cent. The strong base effect resulted in the decline in retail inflation. It is the seventh consecutive month of retail inflation remaining in excess of 5 per cent and the 23rd consecutive month of retail inflation remaining in excess of RBI's targeted inflation rate of 4 per cent.

In the second half of the trading session, key indices cut most of gains but positive trade continued over the Dalal Street and finally markets ended the trading day on a higher note. Support came with reports that deal activity witnessed a handsome growth in August at USD 8.4 billion, on the back of a healthy jump both in volumes and sizes. There were 219 deals during the month, which was the highest since 2005, and double that of the year-ago August 2020 period when the country was coming out of a national lockdown.

On the global front, European markets were trading mostly in red with investors showing caution ahead of the release of key U.S. inflation figures later in the session and amid worries over future growth. Asian markets ended mixed on Tuesday, after export prices in South Korea were up 18.6 percent on year in August, the Bank of Korea said on Tuesday - following the 17.4 percent increase in July. Export prices for manufacturing products advanced 18.6 percent on year and export prices for agricultural, forestry and marine products gained 9.6 percent. Import prices jumped an annual 21.6 percent, up from 19.5 percent in the previous month.

The BSE Sensex ended at 58247.09, up by 69.33 points or 0.12% after trading in a range of 58214.29 and 58482.62. There were 17 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.09%, while Small cap index up by 0.63%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 1.64%, Consumer Disc up by 1.34%, Auto up by 1.17%, TECK up by 1.02% and Consumer Durables up by 0.95%, while Metal down by 0.37%, FMCG down by 0.22%, Energy down by 0.04% and Basic Materials down by 0.02% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 4.07%, HCL Tech. up by 2.54%, Bajaj Auto up by 1.62%, Tech Mahindra up by 1.55% and Larsen & Toubro up by 1.51%. On the flip side, Nestle down by 0.97%, Ultratech Cement down by 0.87%, Hindustan Unilever down by 0.78%, Tata Steel down by 0.74% and HDFC down by 0.74% were the top losers. (Provisional)

Meanwhile, India’s inflation based on wholesale price index (WPI) surged to 11.39% in the month of August as against 11.16% in July. The annual rate of inflation is 11.39% (Provisional) for the month of August 2021 as compared to 0.41% in August 2020.

The high rate of inflation in August 2021 is primarily due to rise in prices of non-food articles, mineral oils; crude petroleum & natural gas; manufactured products like basic metals; food products; textiles; chemicals and chemical products etc as compared the corresponding month of the previous year.

Component wise, primary articles index, having weight of 22.62%, increased by (1.56%) to 155.8 (provisional) in August 2021 from 153.4 (provisional) for the month of July 2021. Fuel & Power index, having weight of 13.15%, increased by (1.49%) to 116.0 (provisional) in August 2021 from 114.3 (provisional) for the month of July 2021.

Besides, Manufactured Products constituting the major portion of the index with weight of 64.23%, increased by (0.76%) to 133.0 (provisional) in August 2021 from 132.0 (provisional) for the month of July 2021.

The CNX Nifty ended at 17380.00, up by 24.70 points or 0.14% after trading in a range of 17367.05 and 17438.55. There were 32 stocks advancing against 18 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indusind Bank up by 4.04%, HCL Tech. up by 2.50%, Hero MotoCorp up by 2.22%, Tata Motors up by 1.63% and Tech Mahindra up by 1.58%. On the flip side, HDFC down by 1.11%, Ultratech Cement down by 1.11%, Nestle down by 1.08%, BPCL down by 1.00% and Hindustan Unilever down by 0.85% were the top losers. (Provisional)

European markets were trading mostly in red, UK’s FTSE 100 decreased 14.83 points or 0.21% to 7,053.60 and France’s CAC was down by 38.01 points or 0.57% to 6,638.92. On the flip side, Germany’s DAX was up by 18.30 points or 0.12% to 15,719.72.

Asian markets ended mixed on Tuesday ahead of crucial US inflation data for more clues on when the US central bank will taper stimulus. Chinese shares declined as investors worried about the regulatory crackdown on technology companies and a widening liquidity crisis for the China’s highly indebted property giant Evergrande Group. Meanwhile, Japanese share ended higher due hopes for an economic reopening as Japan is on track to reach the vaccination levels of the United States and Europe, while continued optimism of new fiscal stimulus ahead of the ruling Liberal Democratic Party’s leadership race scheduled for September 29 too supported market sentiments.