Post Session: Quick Review

The Dalal Street witnessed a bloodbath on Monday’s trading session, with both Sensex and Nifty ending over two and half a percent lower each. After a negative start, key indices remained under a tight grip of bears during the entire trading session, as persistent selling by foreign portfolio investors (FPIs) dampened investors’ sentiment. FPIs have been net sellers for eight consecutive month, offloading Rs 13,888 crore worth of equities so far in June. With this, the FPIs have sold Rs 1,81,043 worth of equities so far this year.

Some concerns came in as RBI data showed that after rising for two consecutive weeks, the country’s foreign exchange reserves declined by $306 million to $601.057 billion in the week ended June 3. Besides, the rupee fell to a new record low of 78.15 against the greenback. Sentiments remained pessimistic, amid reports that with Chief Economic Advisor V Anantha Nageswaran citing the IMF forecast that the Indian economy would cross USD 5 trillion by 2026-27, leader P Chidambaram said the goal of a USD 5 trillion GDP appears to be a case of 'shifting goalposts' as the original target year was 2023-24.

Besides, at the G33 Ministerial Meeting in Geneva, a coalition of developing countries of which India is a key member, Union Commerce and Industry Minister Piyush Goyal expressed his concerns over the stalemate in reaching a permanent solution on the issue of public stockholding and special safeguard mechanism for food security. Market participants largely overlooked report that the National Statistical Office said India’s factory output growth accelerated to an eight-month high at 7.1 per cent in April on the back of a lower base.

On the global front, European markets traded lower as a higher-than-expected U.S. inflation print and troubling COVID-related updates from China triggered a bout of risk aversion. Asian markets settled sharply lower, after Japan large manufacturers' confidence weakened further in the second quarter. The business outlook survey results from the Ministry of Finance showed that the business survey index for big manufacturers dropped to -9.9 in the June quarter from -7.6 in the first quarter.

The BSE Sensex ended at 52846.70, down by 1456.74 points or 2.68% after trading in a range of 52527.08 and 53207.54. There was 1 stock advancing against 29 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 2.73%, while Small cap index down by 3.15%. (Provisional)

The top losing sectoral indices on the BSE were IT down by 3.92%, TECK down by 3.45%, Metal down by 3.39%, Industrials down by 3.35%, PSU down by 3.34%, while there were no gaining sectoral indices on the BSE. (Provisional)

The only gainer on the Sensex was Nestle up by 0.52%. On the flip side, Bajaj Finserv down by 7.02%, Bajaj Finance down by 5.44%, Indusind Bank down by 5.27%, Tech Mahindra down by 4.84% and ICICI Bank down by 4.46% were the top losers. (Provisional)

Meanwhile, Anupriya Patel, MoS for Commerce and Industry has stressed upon making the digital revolution inclusive by creating an environment where nobody is left behind, adding that during COVID-19 pandemic, digitalization has emerged as the key driver for global economic growth. The minister recognized that Digital Economy is central to the promotion of innovation, pursuing entrepreneurial ventures, creation of jobs, efficiency in services and importantly a marketplace for high value technology based products and solutions and the fact that almost half the world’s population does not have access to high-speed broadband and is hence deprived of the access to virtual platforms, tele-medicine, distance education and e-payments.

On supply chains, MoS mentioned that the supply chain disruptions,  as a result of  lockdowns, limited economic activities and economic slowdown has forced manufacturers everywhere to reassess their supply chains. The main point of supply chain resilience is minimizing negative impacts on people's lives and the economy even in the event of supply chain disruptions caused by pandemics, natural disasters, or regional conflicts. In this context, the MOS highlighted the statement made by Prime Minister Shri Narendra Modi that Transparent, Trusted Sources and Timeframe is critical for improving global supply chain resilience which is imperative for trade revival.

While acknowledging that trade should become the engine for reviving global growth, the MoS stated that there is no alternative to the rules based multilateral trading system and that strong commitment to the WTO rules is the only way forward. The WTO reforms must strengthen the fundamental principles of the WTO including consensus-based decision making, inclusivity, equitable, non-discrimination, special and differential treatment.

The CNX Nifty ended at 15774.40, down by 427.40 points or 2.64% after trading in a range of 15684.00 and 15886.15. There were 2 stocks advancing against 48 stocks declining on the index. (Provisional)

The only gainers on Nifty were Nestle up by 0.47% and Bajaj Auto up by 0.01%. On the flip side, Bajaj Finserv down by 7.08%, Bajaj Finance down by 5.46%, Indusind Bank down by 5.23%, Tech Mahindra down by 5.22% and Hindalco down by 5.00% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 107.76 points or 1.47% to 7,209.76, France’s CAC decreased 138.40 points or 2.24% to 6,048.83 and Germany’s DAX was down by 261.09 points or 1.9% to 13,500.74.

Asian markets settled sharply lower on Monday after an unexpected jump in US inflation data reinforced bets on steep interest rate hikes by the US Federal Reserve and an impending recession. Moreover, a flare-up in Covid-19 cases in China’s capital Beijing also weighed on market sentiments. In Beijing, authorities raced to contain a Covid-19 outbreak on Monday traced to a raucous 24-hour bar known for cheap liquor and big crowds, with millions facing mandatory testing and thousands under targeted lockdowns. Japanese shares dropped after US stocks posted their biggest weekly drop since January on last Friday overnight, while investors were awaiting the interest rate decision by the Bank of Japan due on Friday. Confidence among large Japanese manufacturers weakened further in the second quarter, business outlook survey results from the Ministry of Finance showed.