Post Session: Quick Review

Indian equity benchmarks witnessed heavy selling on the last trading day of the week, with both Sensex and Nifty ending near their intraday low points. After a positive start, markets traded flat, taking some support with the Reserve Bank of India’s state of the economy report showing that the fall in consumer price index (CPI)-based inflation to 6.7% in July from 7% in the previous month was a heartening development, and retail inflation may ease to 5% by the Q1 of FY23 before hitting the target of 4%.

However, in late morning deals, a sharp fall witnessed over the Dalal Street, as an analysis of industrial output and merchandise exports by India Ratings and Research suggested that the Indian manufacturing sector, which received a fillip in FY22 due to export growth, is likely to be hit by a slump in foreign trade activity in FY23. Also, an RBI article has warned that big bang privatisation of public sector banks can do more harm than good, and asked the government to take a nuanced approach on the issue.

Key indices continued weak trade in the second half of the trading session, as traders got cautious, after Reserve Bank of India turned net seller of the US currency in June after it sold USD 3.719 billion on a net basis. In the reporting month, the central bank purchased USD 18.96 billion from the spot market and sold USD 22.679 billion. Some concerns also came with reports that the finance ministry has said that exemptions specified in Free Trade Agreement (FTA) with regard to country of origin will prevail in case of conflict between revenue department and importer.

Domestic sentiments remained cautious after all-India Consumer Price Index Number for Agricultural Labourersand Rural Labourers (Base: 1986-87=100) for the month of July, 2022 increased by 6 points each to stand at 1131 and 1143 points respectively. Adding more concerns among traders, foreign institutional investors (FIIs) turned net sellers for the first time in current month, offloading shares worth Rs 1,706 crore on August 18, as per provisional data available on the NSE.

On the global front, European markets were trading lower as investors fretted about soaring inflation, tightening monetary policy, and slowing growth. Asian markets settled mostly lower on Friday, after Japan inflation continued to remain above the 2 percent target on higher fuel prices and weaker yen.  Excluding fresh food, core inflation increased to 2.4 percent from 2.2 percent in the previous month, the Ministry of Internal Affairs and Communications reported. Core inflation exceeded the central bank's 2 percent target for the fourth straight month.

The BSE Sensex ended at 59646.15, down by 651.85 points or 1.08% after trading in a range of 59474.57 and 60411.20. 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 1.27%, while Small cap index down by 0.93%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 0.53%, Utilities up by 0.45%, Capital Goods up by 0.32% and TECK up by 0.14%, while Realty down by 2.14%, Metal down by 1.84%, PSU down by 1.67%, Energy down by 1.64% and Oil & Gas down by 1.62% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 2.20%, Infosys up by 0.93% and TCS up by 0.12%. On the flip side, Indusind Bank down by 3.82%, Bajaj Finserv down by 3.08%, Bajaj Finance down by 2.53%, Tata Steel down by 2.27% and SBI down by 2.25% were the top losers. (Provisional)

Meanwhile, in order to guard domestic players from cheap imports from the neighbouring country, the commerce ministry has recommended imposition of anti-dumping duty on Chinese ofloxacin -- a medicine used to treat certain infections -- for five years, after concluding in its probe that the product has been exported at dumped prices into India, which impacted the domestic industry.

The commerce ministry's arm DGTR (Directorate General of Trade Remedies) had conducted the probe following a complaint from Aarti Drugs about the dumping and initiation of the investigation. The recommended duty ranges between $0.53 per kilogram and $7.03 per kilogram. The finance ministry takes the final call to impose these duties.

The imposition of anti-dumping duty is permissible under the World Trade Organisation (WTO) regime. The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.

The CNX Nifty ended at 17758.45, down by 198.05 points or 1.10% after trading in a range of 17710.75 and 17992.20. There were 6 stocks advancing against 44 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports & SEZ up by 4.65%, Larsen & Toubro up by 2.19%, Infosys up by 0.89%, Eicher Motors up by 0.37% and Bajaj Auto up by 0.34%. On the flip side, Indusind Bank down by 3.78%, Apollo Hospital down by 3.08%, Bajaj Finserv down by 3.08%, Tata Motors down by 2.85% and Tata Consumer Products down by 2.59% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 1.56 points or 0.02% to 7,540.29, France’s CAC decreased 45.13 points or 0.69% to 6,512.27 and Germany’s DAX was down by 103.83 points or 0.76% to 13,593.58.

Asian markets settled mostly lower on Friday, despite marginal gains in Wall Street overnight. Market sentiments dropped amid uncertainties over the US Federal Reserve's future rate hikes. The Fed minutes on Wednesday didn’t clearly hint at the pace of interest rate hikes and showed policymakers committed to raising interest rates to bring down inflation. St Louis Fed president James Bullard said he expects a third straight 75 bps interest rate hike in September, while San Francisco Fed colleague Mary Daly said that hiking rates by 50 or 75 bps next month would be reasonable. Chinese shares declined on heightening concerns about sluggish economic recovery. Japanese shares ended almost flat due to profit booking after a recent rally in stocks.