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Markets end volatile session in green; Sensex gains around 150 points
May-22-2019

In a volatile session, Indian equities benchmarks gained ground to settle in green terrain on Wednesday, with Sensex and Nifty reclaiming their crucial psychological levels of 39,100 and 11,700, respectively. After a cautious start, the markets remained positive for the most part of the session, aided by the Organisation for Economic Co-operation and Development’s (OECD) statement that the Indian economic growth will regain strength and approach 7.5% by 2020. The new income scheme for small farmers will support rural consumption. Traders were also optimistic amid United Nations’ (UN) report stating that the India's economy is projected to grow at 7.1% in current financial year (FY20) on the back of strong domestic consumption and investment. It projected the economy will grow 7% in last financial year (FY19).

But, key indices faced volatility during the trade, as anxiety persisted on the street ahead of final results of the 2019 Lok Sabha elections to be declared tomorrow, May 23, 2019. But, bourses managed to end higher, taking support from a private report that land and labour reforms, privatisation and export promotion would be at the top of agenda of the new government irrespective of which party or coalition takes charge after the poll results on May 23. Markets participants took a note of the Vice President of India, M. Venkaiah Naidu’s statement that India has emerged as an attractive destination for global investors and asked educational institutions to maintain high standards and foster academic excellence. Observing that India was poised to become a $5 trillion economy in the next few years, Naidu said there was a need to remove economic imbalances, urban-rural divide, end gender and social discrimination and enhance the prestige of all the institutions, including the Supreme Court, CAG, CVC, EC, Parliament and State Legislatures.

On the global front, European markets were trading in green, as Eurozone consumer confidence rose more-than-expected in May to its highest level in seven months, after weakening in the previous month. The flash data from the European Commission showed that the flash consumer confidence index climbed to -6.5 from -7.3 in April, which was revised from -7.9. The latest reading was the highest since October, when the score was -5.9. Asian markets ended mostly lower, after Thailand's exports fell in April. The data from the Commerce Ministry showed that exports decreased 2.57 percent year-on-year in April, after a 4.88 percent decline in March. Imports fell 0.72 percent annually in April, after a 7.63 percent decline in the previous month. The trade balance registered a deficit of $1.46 billion in April versus a surplus of $2 billion in March.

Back home, banks and NBFCs companies stocks remained in focus, after the Reserve Bank of India’s (RBI) Central Board in its 576th meeting decided to create a specialised supervisory and regulatory cadre within the RBI, with a view to strengthening the supervision and regulation of commercial banks, urban cooperative banks and Non-Banking Financial Companies (NBFCs).

Finally, the BSE Sensex gained 140.41 points or 0.36% to 39,110.21, while the CNX Nifty was up by 28.80 points or 0.25% to 11,737.90.

The BSE Sensex touched a high and a low of 39,249.08 and 38,903.87, respectively and there were 25 stocks advancing against 05 stocks declining, while 01 stock remain unchanged on the index.

The broader indices ended mixed; the BSE Mid cap index fell 0.16%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were PSU up by 0.92%, Bankex up by 0.89%, Capital Goods up by 0.87%, Industrials up by 0.82% and Oil & Gas up by 0.67%, while FMCG down by 0.84%, Consumer Durables down by 0.64%, IT down by 0.61% and TECK down by 0.55% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 4.84%, Sun Pharma up by 2.92%, Tata Motors - DVR up by 2.71%, Bajaj Auto up by 2.29% and Bharti Airtel up by 1.83%. On the flip side, Yes Bank down by 2.34%, ITC down by 1.88%, TCS down by 1.25%, Power Grid down by 1.03% and Hindustan Unilever down by 0.97% were the top losers.

Meanwhile, rating agency India Ratings (Ind-Ra) in its latest report has cautioned that steel production in India may be significantly affected if the auction of the mines is delayed. Consequently, it said the credit profile of merchant miners and thus non-integrated steel players could come under stress. It noted that the license of about 288 merchant mines will expire by March 2020, out of which 59 mines are under operations. It also highlighted that majority of these 59 mines are iron ore mines situated in Odisha and Karnataka with about 85 million tonnes of approved annual capacity.

Rating agency estimates that around 60 million tonnes of the actual production of iron ore from these mines could be disrupted. Considering that the auction process on an average takes three to six months to complete, it said a delay in initiating them until the latter half of 2019 due to the Lok Sabha elections in the country could affect the timely auction of mining lease.

According to the report, auction to operation process also gets elongated typically due to delays in obtaining environmental, wildlife and forest clearances. It said that the G2 resource prospection is a pre-requisite for auction which some of these mines may not have at the moment. The report assumes importance as India is aiming to reach a crude steel production capacity of 300 million tonnes by 2030-2031.

The CNX Nifty traded in a range of 11,784.80 and 11,682.40. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 5.54%, Sun Pharma up by 3.46%, Bajaj Auto up by 2.51%, BPCL up by 2.35% and Eicher Motors up by 1.83%. On the flip side, Tech Mahindra down by 2.98%, Indiabulls Housing Finance down by 2.94%, Bharti Infratel down by 2.52%, Yes Bank down by 1.49% and ZEEL down by 1.35% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 32.84 points or 0.45% to 7,361.76, France’s CAC rose 2.23 points or 0.04% to 5,387.69 and Germany’s DAX was up by 32.71 points or 0.27% to 12,176.18.

Asian markets ended mostly lower on Wednesday despite the overnight gains on Wall Street after the US temporarily eased trade restrictions on Chinese telecom giant Huawei. Investors are also cautious as they look ahead to the release of minutes of the US Federal Reserve's latest monetary policy meeting later in the day. Chinese shares ended down as trade tensions continued to linger. While, Japanese shares ended largely unchanged after the New York Times reported that the Trump administration is considering placing limits to Chinese video surveillance firm Hikvision's ability to buy US technology.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,891.70-14.27-0.49

Hang Seng

27,705.9448.7048.70

Jakarta Composite

5,939.64-11.73-0.20

KLSE Composite

1,603.74-1.62-0.10

Nikkei 225

21,283.3710.920.05

Straits Times

3,183.14-0.12--

KOSPI Composite

2,064.863.610.18

Taiwan Weighted

10,457.22-7.28-0.07
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