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EQUITY
Post Session: Quick Review
Aug-19-2019

Indian equity benchmarks erased major chunk of gains in dying hour of trade to come off their intraday high points, but managed to close the session with moderate gains, on the back of strong trend seen in other Asian markets. Domestic stocks made positive start, as traders were optimistic with Fitch Solutions’ statement that the RBI is expected to cut interest rates by 40 basis points before the end of the current financial year as monetary easing till now appears to be insufficient in boosting economic growth. Some solace also came with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the business community has been facing various challenges at the moment and growth is a matter of highest priority for the monetary policy committee (MPC) of the central bank.

Key bourses added more gains and traded near intraday high levels in the afternoon deals, as sentiments on the street improved further with a report that monsoon rains in India in the week through August 14 were above average for a third straight week. The cumulative rainfall till August 14 was 0.1% above long-term average with the weekly rainfall 45.1% above long-term average owing to heavy rainfall across western and central India. Local investors cheered with reports that private equity and venture capital investments in India crossed $8 billion in July -- the highest fund infusion in a month by PE/VC funds -- amid strong investment activity in infrastructure and real estate asset classes. However, markets erased most of their early gains, as anxiety was among traders with report that the Australia and New Zealand Banking Group (ANZ) slashed its forecast for India's economic growth to 6.2% in the financial year ending next March from a previous estimate of 6.5%, warning it would be tough for authorities to engineer a turnaround.

On the global front, Asian markets ended mostly higher on Monday, while European markets were trading in green, as hopes of more stimulus from central banks around the world and steps being taken by major economies such as Germany and China soothed investors’ fears of a sharp global economic slump. Back home, Airline sector were in focus with report that aviation watchdog DGCA is looking at the option of introducing a new pilots training programme that will focus more on competitive assessment rather than just fixed flying hours.

The BSE Sensex ended at 37423.80, up by 73.47 points or 0.20% after trading in a range of 37358.49 and 37718.88. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.28%, while Small cap index was up by 0.50%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.60%, Capital Goods up by 1.17%, Industrials up by 0.68%, Healthcare up by 0.59% and Realty up by 0.49%, while PSU down by 0.88%, Oil & Gas down by 0.59%, Auto down by 0.39%, FMCG down by 0.24% and Metal down by 0.24% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 2.41%, Tech Mahindra up by 1.67%, Axis Bank up by 1.41%, Larsen & Toubro up by 1.23% and ICICI Bank up by 1.16%. (Provisional)

On the flip side, Yes Bank down by 3.27%, Power Grid down by 2.06%, SBI down by 1.67%, ONGC down by 1.29% and Hero MotoCorp down by 1.28% were the top losers. (Provisional)

Meanwhile, CARE Ratings in its latest study report has stated that growth in job creation slowed down in the financial year 2018-19 (FY19), with a 4.3% year-on-year (Y-o-Y) increase in total employment, over 6.2% Y-o-Y growth in FY18. The report showed that the number of jobs created during FY19 to be at 6.03 million. It noted that an economy growing at 6.8% should ideally be creating jobs commensurate to its growth rate. The study is based on a sample of 969 companies which has a high level of concentration as of 2019. About 12 of the 33 sectors are included, with 502 companies that accounted for 83 percent of total headcount, as of March 2019.

The study showed that growth tended to be higher in the service sectors such as finance, retail, realty, IT insurance, media and logistics. These were the relatively faster growing sectors in the economy. In the non-services sectors, non-ferrous, consumer durables and capital goods registered higher growth rates (electrical as well, though it was smaller in size). The auto sector (which saw a sharp fall in growth in production, combined with higher mechanisation), textiles (low production growth) and chemicals grew at just less than 5 percent (and have a sizeable share in total).

The slower movers were infrastructure, construction materials (even though production grew at a healthy rate), FMCG (slowdown in growth in production from 10.5% in FY18 to 4% in FY19), healthcare (slowdown in production growth from 23.1% in FY18 to 1.6% in FY19) and power (stable growth in production of around 5%). CARE Ratings said that the slower growth in the capital goods segment is a factor that has affected job growth in some sectors like infrastructure and construction material. Employment in paper industry grew by just 0.9%, which corresponded to a decline in production by 4.4% over two successive years.

The CNX Nifty ended at 11055.10, up by 7.30 points or 0.07% after trading in a range of 11037.85 and 11146.90. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Sun Pharma up by 2.72%, Tech Mahindra up by 2.26%, Axis Bank up by 1.41%, Bharti Infratel up by 1.32% and Titan Co up by 1.24%. (Provisional)

On the flip side, Yes Bank down by 3.34%, Indiabulls Housing finance down by 3.04%, Grasim Industries down by 2.56%, Power Grid down by 1.97% and GAIL India down by 1.66% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 58.38 points or 0.82% to 7,175.53, France’s CAC rose 35.00 points or 0.66% to 5,335.79 and Germany’s DAX was up by 86.52 points or 0.75% to 11,649.26.

Asian markets ended mostly higher on Monday on hopes of more stimulus measures from central banks around the world to support their economies helped ease immediate concerns about a global recession. A rebound in US Treasury yields and reports suggesting that Washington and Beijing are working actively to revive negotiations aimed at ending the trade war also buoyed sentiment. On Sunday, US President Trump said that he had discussed the impact of Washington's tariffs on Chinese goods with Apple chief Tim Cook. Chinese shares closed higher after the People's Bank of China said it would use market-based reform methods to help lower real lending rates and prop up a slowing economy.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,883.10
59.28
2.10

Hang Seng

26,291.84
557.62
2.17

Jakarta Composite

6,296.72
10.06
0.16

KLSE Composite

1,596.45

-2.77

-0.17

Nikkei 225

20,563.16
144.35
0.71

Straits Times

3,128.45
13.42
0.43

KOSPI Composite

1,939.90
12.73
0.66

Taiwan Weighted

10,488.75
67.86
0.65

 
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