Post Session: Quick Review

Indian equity benchmarks ended near their intraday high points on Wednesday. Markets made a cautious start of the day, as the International Monetary Fund (IMF) in its World Economic Outlook update July 2022 has cut India's growth rate by 0.8 percentage point to 7.4 per cent for fiscal year 2022, reflecting ‘mainly less favourable external conditions and more rapid policy tightening’. In April, the IMF had projected a ‘fairly robust’ growth of 8.2 per cent for India in 2022.

Some concerns remained among traders, amid a private report stating that the global economy is in the grips of a serious slowdown, with some key economies at high risk of recession and only sparse meaningful cooling in inflation over the next year. Besides, global rating agency S&P said it expects “significant” increases in the policy rates by the Reserve Bank of India’s (RBI) monetary policy committee (MPC) at its upcoming meetings. The assessment comes a week ahead of the MPC’s three-day meeting.

But soon, gaining momentum witnessed over the Dalal Street, as listing various measures taken by the government to address inflation, Union Minister of State for Finance Pankaj Chaudhary has said that the price situation of major essential commodities is monitored by the Government on a regular basis and corrective action is taken from time to time. Traders took some support with Minister of State for Finance Bhagwad Karad stated that the amount involved in fraud cases reported by public sector banks (PSBs) has come down to Rs 3,204 crore in the last fiscal from Rs 28,884 crore in 2017-18.

Key indices added more gains in the second half of the trading session, tracking higher global markets. Sentiments remained positive as ECGC has introduced a new scheme to provide enhanced export credit risk insurance cover to the extent of 90% to support small exporters under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB- WTPC & PS).  The scheme is expected to benefit a number of small-scale exporters availing of export credit with banks which hold the ECGC WT-ECIB covers.

On the global front, European markets were trading higher, as market participants await the Fed's interest-rate decision later in the day. Asian markets ended mostly higher on Wednesday, after China industrial profits grew slightly in June after falling for two straight months, as the relaxation of pandemic related restrictions underpinned production and sales. Industrial profits grew 0.8 percent year-on-year in June, reversing a 6.5 percent fall in May. During the January to June period, industrial profits advanced 1.0 percent.

Back home, the telecom stocks remained in focus after the government received Rs 1.45 lakh crore bids on Day 1 of 5G spectrum auction. Besides, stocks related to the auto component industry also remained in focus as Crisil’s report stated that auto component industry is expected to see 9-11 per cent of its revenue coming from EV (Electric Vehicle) parts by 2027 amid increasing electrification. It said this growth will come even as the supply of parts for the conventional internal combustion engine-driven vehicles will also grow during the period.

The BSE Sensex ended at 55816.32, up by 547.83 points or 0.99% after trading in a range of 55157.99 and 55853.09. There were 25 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.90%, while Small cap index up by 0.38%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.73%, Capital Goods up by 1.68%, PSU up by 1.47%, IT up by 1.34% and Basic Materials up by 1.17%, while Telecom down by 0.77% was the only losing index on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 3.39%, SBI up by 2.76%, Larsen & Toubro up by 2.67%, TCS up by 2.33% and Asian Paints up by 2.31%. On the flip side, Bharti Airtel down by 1.32%, Kotak Mahindra Bank down by 0.17%, NTPC down by 0.10%, Bajaj Finserv down by 0.09% and Reliance Industries down by 0.05% were the top losers. (Provisional)

Meanwhile, listing various measures taken by the government to address inflation, Union Minister of State for Finance Pankaj Chaudhary has said that the price situation of major essential commodities is monitored by the Government on a regular basis and corrective action is taken from time to time.

The Minister gave more details about measures, noting that the Central Government on May 21, 2022 cut excise duty by Rs 8 per litre on petrol and Rs 6 per litre on diesel. Further, he said that reduction in import duties and cess on pulses, rationalisation of tariffs and imposition of stock limits on edible oils and oil seeds, maintenance of buffer stock for onion and pulses, the inclusion of soya meal as an essential commodity in the schedule of the Essential Commodities Act, 1955 up to June 30, 2022 and imposition of stock limit on soya meal up to June 30, 2022 were carried out.

Besides, Chaudhary stated that soaring commodity prices and pandemic-induced supply-demand imbalances caused a rise in inflation rates worldwide including in India. The Minister also said that the Russia-Ukraine conflict has exacerbated the inflationary pressures in crude oil, gas, and metals. Further, the onset of summer heat waves has led to crop damage and a rise in vegetable prices.

The CNX Nifty ended at 16641.80, up by 157.95 points or 0.96% after trading in a range of 16438.75 and 16653.45. There were 41 stocks advancing against 9 stocks declining on the index. (Provisional)

The top gainers on Nifty were Sun Pharma up by 3.04%, SBI up by 2.72%, Divi's Lab up by 2.70%, Larsen & Toubro up by 2.59% and Asian Paints up by 2.49%. On the flip side, Bharti Airtel down by 1.34%, Bajaj Auto down by 1.06%, Hero MotoCorp down by 0.65%, UPL down by 0.65% and Kotak Mahindra Bank down by 0.43% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 31.15 points or 0.43% to 7,337.43, France’s CAC increased 23.61 points or 0.38% to 6,235.06 and Germany’s DAX was up by 7.29 points or 0.06% to 13,104.22.

Asian markets ended mostly higher on Wednesday even after US stock indices dropped overnight on a flurry of mixed earnings reports. Seoul shares rose even as the South Korea’s consumer confidence tumbled by the most since the onset of the Covid-19 pandemic. Although, market participants cautiously awaited the Fed's interest-rate decision later in the day. The International Monetary Fund has lowered its 2022 economic forecasts for global growth to 3.2% and for emerging and developing Asia to 4.6% as recession risks looming. Hong Kong shares declined as Hong Kong Financial Secretary Paul Chan Mo-po said commercial banks in Hong Kong will have no choice but to raise prime rates increase, but not at the scale and pace of the US Fed.