State Bank Of India

Indian equity benchmarks settled with minor cut on Thursday after fluctuating between gains and losses during the session, following weak Asian equities. Trade was largely range-bound for most part of the session owing to volatility as weekly index future and option contracts expired today. Markets made positive start and managed to trade above their neutral lines, as traders took some support with report that India has moved four places on the Global Innovation Index (GII) 2020 to rank at 48 since 2019. This makes it the third-most innovative lower middle-income economy in the world. India at the 48th place also retains the highest rank in the central and southern Asia region. However, markets witnessed some selling activity in afternoon deals, as traders turned wary with Federation of Indian Export Organisations (FIEO) stating that the government's decision to cap export incentives under the Merchandise Exports from India Scheme (MEIS) at Rs 2 crore per exporter on exports made between September 1, 2020 to December 31, 2020 is going to seriously affect traders and cause uncertainty.

However, key gauges once again entered into green terrain in late afternoon session, amid the latest IHS Markit Services Purchasing Managers' Index (PMI) indicated a slower rate of decline in business activity across the Indian service sector during August. The ongoing coronavirus pandemic 2019 (COVID-19) restrictions continued to adversely impact client demand and business operations. New business and output continued to contract at marked rates, albeit slower than the records seen in April and May. But, markets failed to hold gains and ended marginally lower, as rising coronavirus cases in the country dampened sentiments in the markets. Meanwhile, the 15th Finance Commission will hold a meeting with its economic advisory panel on Friday to discuss issues of GDP growth, GST compensation and fiscal consolidation.

On the global front, Asian markets ended mostly lower on Thursday amid the latest survey from Jibun Bank revealed that the services sector in Japan continued to contract in August, and at a slightly faster pace, with services PMI score of 45.0. That's down from 45.4 in July and it moves farther beneath the boom-or-bust line of 50 that separates expansion from contraction. Meanwhile, the latest survey from Caixin showed the services sector in China continued to expand in August, albeit at a slightly slower pace, with a services PMI score of 54.0, down from 54.1 in July.  European markets were trading higher, as the French government said it will unveil a €100 billion stimulus package, representing 4 percent on French GDP, to kick start the economy hit hard by the global Covid-19 health crisis. Meanwhile, investors shrugged off a pair of disappointing economic reports. Separately, data from Eurostat showed Eurozone retail sales fell unexpectedly in July on weak non-food products turnover. Retail sales declined 1.3 percent month-on-month, following a 5.3 percent rise in June. This was the first drop in three months and confounded expectations for an increase of 1.5 percent.

Back home, on the sectoral front, majority of power stocks ended in green with rating agency ICRA’s report that demand for electricity in the country improved to about 98 percent of pre-COVID-19 level in August, led by recovery in rural areas. Aviation stocks gained in the trade after the government allowed airlines to increase flights up to 60 per cent of their total capacity. Textile stocks were also buzzing as the government approved for signing a pact between India and Japan aimed at increasing India's exports of textile and apparel to the Japanese market, and to boost co-operation in the textiles sector.

Finally, the BSE Sensex fell 95.09 points or 0.24% to 38,990.94, while the CNX Nifty was down by 7.55 points or 0.07% to 11,527.45.

The BSE Sensex touched high and low of 39,236.36 and 38,943.43, respectively and there were 13 stocks advancing against 17 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.40%, while Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 3.37%, IT up by 1.51%, TECK up by 1.34%, Consumer Discretionary up by 1.01% and Capital Goods up by 0.99%, while Bankex down by 1.51%, Finance down by 0.94%, Metal down by 0.86%, Energy down by 0.72%, Realty down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 5.71%, Tech Mahindra up by 3.35%, Nestle up by 2.46%, Maruti Suzuki up by 2.17% and Sun Pharma up by 1.69%. On the flip side, ICICI Bank down by 2.42%, Bharti Airtel down by 2.23%, Axis Bank down by 2.02%, Kotak Mahindra Bank down by 1.64% and Power Grid down by 1.57% were the top losers.

Meanwhile, India for the first time made it to the top 50 countries in the Global Innovation Index (GII) 2020. India has moved up four positions since 2019 to become the third-most innovative lower-middle-income economy in the world. India, at 48, also retains the highest rank in the central and southern Asia region. The index, compiled by the World Intellectual Property Organization (WIPO), along with Cornell University and the INSEAD Business School, presents the latest global innovation trends and annual innovation ranking of 131 economies.

India increased the most in three pillars: Institutions (61, from 77 in 2019), business sophistication (55, from 65 in 2019), and creative outputs (64, from 78 in 2019). Under institutions, the country’s rank on indicators, such as political and operational stability (from 91 to 83), government effectiveness (from 65 to 55), and ease of resolving insolvency (from 95 to 47), improved remarkably.

Under business sophistication, indicators such as expenditure financed by business was not available last year; this time India came in at 48. India also bettered its rank in both intellectual property payments (27, from 29 in 2019) and research talent (38, from 46 in 2019). Under creative outputs, India increased its ranking by a combination of performance improvements and model changes. It gained 18 places in cultural and creative services exports to 21 and it ranked 31 on the new indicator on global brands, thanks to its 164 brands in the top 5,000, led by Tata Group.

However, India continued to lag in infrastructure, even as it moved up four notches to come in at 75, from 79 in 2019. Also, it lost seven places to move down to 60 in human capital and research, from 53 in 2019. India came out as an innovation achiever for the tenth consecutive year. It was so because India was on the list of the first 10 countries, income-group wise.

The CNX Nifty traded in a range of 11,584.95 and 11,507.65 and there were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 10.89%, Grasim Industries up by 7.16%, Titan Company up by 5.93%, UPL up by 4.32% and Wipro up by 3.47%. On the flip side, ICICI Bank down by 2.10%, Bharti Airtel down by 1.92%, Kotak Mahindra Bank down by 1.90%, Axis Bank down by 1.90% and Hindalco down by 1.72% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 47.75 points or 0.8% to 5,988.70, France’s CAC rose 89.06 points or 1.77% to 5,120.80 and Germany’s DAX was up by 165.17 points or 1.25% to 13,408.60.

Asian markets ended mostly lower on Thursday due to fears about further escalation of the Sino-US tensions following US Secretary Mike Pompeo’s announcement of fresh restrictions on Chinese diplomats in United States. The United States said it would now require senior Chinese diplomats to get State Department approval before visiting US university campuses or meeting local officials. Chinese shares ended lower despite positive data showing China's service sector activity continued to expand in August, albeit at a slightly slower pace, the latest survey from Caixin showed with a services PMI score of 54.0, down from 54.1 in July. Though Japanese shares ended higher, with Chief Cabinet Secretary Yoshihide Suga announced his candidacy for the ruling Liberal Democratic Party's presidential election and formally entering the contest to succeed Shinzo Abe as the country's next prime minister. The Japanese yen slipped and investors shrugged off data showing that the services sector in Japan contracted at a slightly faster pace in August.