Post Session: Quick Review

Monday turned out to be a wonderful day for Indian equity markets. After a strong start, markets remained under a grip of bulls during the entire trading session. Sentiments got a boost as SBI Research in its latest report has said that the income of farmers has grown in the range of 1.3-1.7 times in FY22 from the FY18 levels on average while grain exports soared to over USD 50 billion. For certain crops in some states (like soyabean in Maharashtra and cotton in Karnataka) farmers' income more than doubled in FY22 from FY18 levels.

Domestic sentiments remained optimistic, after the Reserve Bank of India in its latest monthly bulletin said that the Indian economy remains resilient despite formidable global headwinds and amidst fears of a recession. The bulletin said that in spite of geopolitical spillovers, 'There are sparks in the wind that ignite the innate strength of the economy and set it on course to becoming the fastest growing economy in the world, though besieged it might be by fears of recession'.

Markets continued gaining rally in the second half to end the session near their intraday high points. Traders got relief after Agriculture Minister Narendra Singh Tomar expressed hope that monsoon rains, which are crucial for Kharif sowing, will progress in the coming days and said it is too early to comment on the paddy acreage. The street took a note of the Reserve Bank of India (RBI) data showed that the RBI remained net buyer of the US currency in May, after it purchased $2.001 billion on net basis from the spot market. The RBI purchased $10.143 billion from the spot market and sold $8.142 billion.

On the global front, European markets were trading higher ahead of this week's ECB meeting and the expected resumption of an important gas pipeline that is currently closed for maintenance. Asian markets settled higher on Monday, as Indonesia's trade surplus rose in June, as exports strongly increased, and much faster than imports. The figures from Statistics Indonesia showed that the trade surplus increased $5.09 billion in June from $1.33 billion in the same month last year. In May, the trade surplus was $2.90 billion.

Back home, healthcare sector stocks remained in focus, after Indian Medical Association (IMA) has urged Union Finance Minister Nirmala Sitharaman to grant exemption in Goods and Services Tax (GST) for healthcare services. IMA stated that the 47th GST Council meeting has recommended that ‘Like CTEPs, common bio-medical waste treatment facilities for treatment or disposal of biomedical waste shall be taxed at 12 per cent so as to allow them ITC.’

The BSE Sensex ended at 54521.15, up by 760.37 points or 1.41% after trading in a range of 54034.97 and 54556.66. There were 23 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.49%, while Small cap index up by 1.39%.(Provisional)

The top gaining sectoral indices on the BSE were IT up by 3.07%, TECK up by 2.96%, Metal up by 2.72%, Bankex up by 2.08% and Basic Materials up by 1.97%, while FMCG down by 0.04% was the only losing index on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 4.36%, Infosys up by 4.16%, Tech Mahindra up by 3.67%, Bajaj Finserv up by 3.46% and Axis Bank up by 3.31%. On the flip side, Dr. Reddy's Lab down by 1.70%, HDFC Bank down by 1.19%, Mahindra & Mahindra down by 0.86%, Maruti Suzuki down by 0.84% and Nestle down by 0.76% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) in its latest monthly bulletin ‘July 2022’ has showed that in a global landscape marred by fears of recession and war, the Indian economy shows resilience. The recent revival of the monsoon, the pick-up in manufacturing and services, stabilisation of inflation pressures and strong buffers in the form of adequate international reserves, sufficient foodgrain stocks and a well-capitalised financial system together brighten the outlook and strengthen the conditions for a sustainable high growth trajectory in the medium-term.

The article published in the RBI's monthly bulletin compared the impact of the two taper announcements (May 22, 2013, and November 3, 2021) by the US Federal Reserve (Fed) on Indian financial markets. The event study results indicate that the 2021 Taper (Taper 2) announcement was less severe as compared to Taper Tantrum of 2013 (Taper 1) in terms of its impact on Indian bond yields and spreads.

Besides, the monthly bulletin noted that the electronification of global foreign exchange (FX) trading with the emergence of multi-bank platforms has transformed the execution of trade and price discovery. Some of these changes can be seen even in the onshore Indian Rupee (INR) market, albeit in a limited way.

The CNX Nifty ended at 16278.50, up by 229.30 points or 1.43% after trading in a range of 16142.20 and 16287.95. There were 42 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 4.72%, Indusind Bank up by 4.42%, Infosys up by 4.16%, Tech Mahindra up by 3.51% and Bajaj Finserv up by 3.46%. On the flip side, Britannia down by 1.92%, Dr. Reddy's Lab down by 1.76%, HDFC Bank down by 1.06%, Maruti Suzuki down by 0.83% and Mahindra & Mahindra down by 0.78% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 62.17 points or 0.88% to 7,101.98, France’s CAC increased 36.35 points or 0.61% to 5,951.76 and Germany’s DAX was up by 191.29 points or 1.53% to 12,710.95.

Asian markets settled higher on Monday, tracking rebound in Wall Street stocks last Friday followed by upbeat earnings news and slew of US economic data, including retail sales data. Report from the Commerce Department showed retail sales jumped 1 percent in June after edging down by a revised 0.1 percent in May. A separate report showed that the consumer sentiment index inched up to 51.1 in July from a record low 50 in June. Seoul shares gained after a survey showed US consumers' inflation expectations eased in July on the back of a drop in oil prices. Chinese shares gained after the governor of the country's central bank vowed to increase implementation of prudent monetary policy to support the real economy. Hong Kong shares also rose as Chinese regulators stepped up efforts to encourage lenders to extend loans to qualified real estate projects following a widening mortgage-payment boycott on unfinished houses. Meanwhile, market in Japan was closed for the Marine Day holiday.