HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Benchmarks pare early gains to end flat
Aug-19-2019

Indian equity benchmarks pared most of the early gains and ended flat on Monday, with Sensex & Nifty ending higher just by 52 and 6 points, respectively. Markets made a fabulous start of the day, aided by Fitch Solutions’ statement that the Reserve Bank of India (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. Sentiments got boosted amid 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. 

But, in the last hour of the trade, key indices pared most of their gains, as 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. However, markets managed to settle in positive terrain, supported with 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.

On the global front, European markets were trading in green, despite euro area trade surplus declined in June as exports logged a monthly decline amid an increase in imports. The data from Eurostat showed that the trade surplus fell to a seasonally adjusted EUR 17.9 billion in June from EUR 19.6 billion in May. In the same period last year, the surplus totaled EUR 12.5 billion. Asian markets ended in green, even after Thailand's economic growth decelerated to a five-year low in the second quarter.  The National Economic and Social Development Council said that gross domestic product expanded 2.3 percent year-on-year in the second quarter, slower than the 2.8 percent increase seen in the first quarter.

Back home, the automobile industry stocks ended lower, after automobile dealers' body Federation of Automobile Dealers Associations (FADA) said retail sales of passenger vehicles (PV) in July declined 11 per cent to 2,43,183 units against the same period last year. According to FADA, PV sales stood at 2,74,772 units in July 2018. Further, stocks related to the realty sector remained in watch, as global rating agency Fitch Ratings in its latest report said that Indian-based real-estate developers may face liquidity crunch as non-bank financial companies (NBFCs) and housing finance companies (HFCs) becoming risk -averse towards lending to real-estate sector.

Finally, the BSE Sensex gained 52.16 points or 0.14% to 37,402.49, while the CNX Nifty was up by 6.10 points or 0.06% to 11,053.90.

The BSE Sensex touched a high and a low of 37,718.88 and 37,358.49, respectively and there were 12 stocks advancing against 18 stocks declining, while 1 stock remain unchanged on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.20%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.57%, Capital Goods up by 1.18%, Industrials up by 0.68%, Healthcare up by 0.56% and Energy up by 0.50%, while PSU down by 0.92%, Oil & Gas down by 0.59%, Auto down by 0.57%, Metal down by 0.34% and Basic Materials down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.66%, Tech Mahindra up by 1.84%, Axis Bank up by 1.40%, Larsen & Toubro up by 1.30% and Reliance Industries up by 1.15%. On the flip side, Yes Bank down by 3.46%, Power Grid down by 1.96%, ONGC down by 1.48%, SBI down by 1.46% and Mahindra & Mahindra down by 1.36% were the top losers.

Meanwhile, Corporate Affairs Secretary Injeti Srinivas has said that the government is planning to give debt waiver for small distressed borrowers as part of 'Fresh Start' provisions under the Insolvency and Bankruptcy Code (IBC) framework. He said the government has held discussions with the microfinance industry regarding criteria for the proposed waiver for small distressed borrowers from the economically weaker section (EWS). He emphasized that the waiver-as part of individual insolvency-would be for the most distressed within the EWS.

Srinivas said 'If you have once availed the fresh start, then you cannot avail it again for five years. We have worked out all safeguards to the satisfaction of the microfinance industry. It will be like taking haircuts. At a national level, over a three to four years period, it will be not more than Rs 10,000 crore.' He further said that the IBC provisions pertaining to personal guarantor to corporate debtor would be coming into effect immediately, followed by those related to partnership and proprietorship. He said 'then we will look to bring fresh start provision.'

As per the IBC, there are various thresholds for 'fresh start', including that the gross annual income of the debtor does not exceed Rs 60,000. The aggregate value of the debtor's assets should not be more than Rs 20,000 and that the aggregate value of the qualifying debts does not exceed Rs 35,000. Among others, such a person should not be having an own dwelling unit, irrespective of whether it is encumbered or not.

The CNX Nifty traded in a range of 11,146.90 and 11,037.85. There were 20 stocks advancing against 30 stocks declining on the index.

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 up by 1.24%. On the flip side, Yes Bank down by 3.34%, Grasim Industries down by 2.56%, Indiabulls Housing Finance down by 1.69%, GAIL India down by 1.66% and Coal India down by 1.51% were the top losers.

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
  RELATED NEWS >>
Most Viewed >>
April 24 , 2024
Investing in passive funds? Keep it simple and
April 22 , 2024
Investment bankers to receive hefty bonuses as
April 22 , 2024
FPIs withdraw over Rs 5,200 crore in April so
April 23 , 2024
Why Mirae Asset MF is cautioning its ETF inves
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.