Post Session: Quick Review

Indian equity benchmarks ended near their intraday low points on Tuesday. After a negative start, markets remained lower for the entire trading session, as Crisil Research said that India Inc is staring at the third consecutive quarter of a year-on-year drop in profit margins for the April-June 2022 period. Adding more pessimism, a private report stated that private equity investments into domestic companies fell 17 per cent to $6.72 billion on an annual basis in the June quarter.

Sentiments remained negative, amid a private report stating that though there are signs of easing commodity prices, the economic outlook for the current financial year 2022-23 remains quite uncertain and will ride completely on the wheels of private consumption and investment demand. Adding more concerns, another private report stated that India's inflation will hold above the top of the central bank's tolerance band for at least the rest of 2022, longer than previously thought, making several more interest rate hikes in coming months all but inevitable.

Traders overlooked Commerce and Industry Minister Piyush Goyal’s statement that the country's exports are likely to register a ''reasonable level'' of growth in the current financial year despite the global uncertainties on the trade front. He said that there are signs of a global slowdown in international trade and India is keeping a ''watchful'' eye on the developments by talking to all the export promotion councils and large exporters, and engaging with the Indian missions abroad.

On the global front, European markets were trading lower. Asian markets settled mostly lower, after Producer prices in Japan were up 0.7 percent on month in June, the Bank of Japan said on Tuesday. That exceeded expectations for an increase of 0.5 percent following the upwardly revised 0.1 percent increase in May (originally flat). On a yearly basis, producer prices jumped 9.2 percent - again beating forecasts for 8.8 percent and down from the upwardly revised 9.3 percent gain in the previous month (originally 9.1 percent).

Back home, NBFCs stocks remained in focus, as Icra Ratings in its latest report has said that securitisation volumes originated by Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) have almost doubled to around Rs 33,000 crore in the first quarter of the current financial year (Q1FY23). The growth in volumes reflects a 1.9 times increase when compared to Rs 17,200 crore of securitised assets in Q1 FY22 and a 4.4 times increase compared to Rs 7,500 crore in Q1 FY21.

The BSE Sensex ended at 53886.61, down by 508.62 points or 0.94% after trading in a range of 53824.97 and 54236.49. There were 3 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.51%, while Small cap index down by 0.52%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 1.27%, Telecom up by 1.22%, Power up by 1.15% and Realty up by 0.04%, while IT down by 1.29%, TECK down by 1.21%, Metal down by 1.16%, Auto down by 1.13% and FMCG down by 1.03% were the top losing indices on BSE. (Provisional)

The only gainers on the Sensex were NTPC up by 1.87%, Bharti Airtel up by 0.33% and Bajaj Finance up by 0.21%. On the flip side, Infosys down by 2.33%, Nestle down by 1.87%, Power Grid down by 1.66%, Hindustan Unilever down by 1.64% and Mahindra & Mahindra down by 1.64% were the top losers. (Provisional)

Meanwhile, amid increasing interest of the global trading community in the domestic currency, the Reserve Bank of India (RBI) has decided to put in place an additional arrangement for invoicing, payment, and settlement of exports / imports in Indian rupees.

RBI further noted that before putting in place this mechanism, banks will require prior approval from the Foreign Exchange Department of the Reserve Bank of India. The RBI said for settlement of trade transactions, the concerned banks will require Special Rupee Vostro Accounts of correspondent bank/s of the partner trading country.

Meanwhile, exporters, undertaking overseas shipments of goods and services through this mechanism, will be paid the export proceeds in Indian rupees from the balances in the designated Special Vostro account. This mechanism may enable Indian exporters to receive advance payment against exports from overseas importers in rupees.

The CNX Nifty ended at 16058.30, down by 157.70 points or 0.97% after trading in a range of 16031.15 and 16158.75. There were 7 stocks advancing against 43 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 1.59%, Shree Cement up by 0.54%, Adani Ports & SEZ up by 0.37%, Bharti Airtel up by 0.37% and Coal India up by 0.28%. On the flip side, Eicher Motors down by 3.05%, Hindalco down by 2.61%, Infosys down by 2.35%, BPCL down by 2.30% and Nestle down by 1.97% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 15.40 points or 0.21% to 7,181.19, France’s CAC decreased 14.52 points or 0.24% to 5,981.78 and Germany’s DAX was down by 59.49 points or 0.46% to 12,772.95.

Asian markets settled mostly lower on Tuesday due to worries about global economic slowdown following fresh Covid-19 outbreak in China, while energy and cost-of-living crisis loomed over the eurozone economy. Further, markets also declined by tracking overnight fall in Wall Street as investors awaited corporate earnings, a slew of economic data and key inflation figures due this week that could influence the Federal Reserve's path for interest-rate increases. Seoul shares dropped ahead of the Bank of Korea's interest-rate decision slated for Wednesday. Chinese shares fell sharply as fears of new lockdowns in Shanghai undermined the broader China market, while a renewed regulatory offensive against big tech companies also sapped investor confidence.