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EQUITY
Post Session: Quick Review
Jul-22-2019

Key equity benchmarks once again came under heavy selling pressure on Monday and extended their losses to a third session in a row, as weak global cues weighed down sentiments. Markets started the week on a gloomy note and stayed in the negative terrain for whole trading session, as traders remain concerned about the Reserve Bank of India’s (RBI) data showing that after touching record highs, the foreign exchange reserves declined by $1.113 billion to $428.797 billion in the week to July 12 - the first fall after four consecutive weeks of gains - due to a fall in foreign currency assets. Some cautiousness also crept in with report that the Ministry of Statistics and Programme Implementation indicated as many as 345 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns to the tune of over Rs 3.28 lakh crore owing to delays and other reasons.

Anxiety too persisted with a data showing that investments through participatory notes (P-notes) in the Indian capital market slipped to Rs 81,913 crore in June after posting growth for the previous four months. In the previous four months, cumulative investment of Rs 73,428 crore was made till the end of February, Rs 78,110 crore till March-end, Rs 81,220 crore till April-end and Rs 82,619 till May-end.  Traders paid no heed towards report that Asian Development Bank (ADB) has lowered the inflation forecast for India during the current financial year by 0.2 percentage points to 4.1 percent, on the back of gain in rupee and cut in the country's GDP projection. The market participants even overlooked NITI Aayog Vice Chairman Rajiv Kumar’s statement that India will achieve Gross domestic product (GDP) growth of 8 percent plus from fiscal year 2020-2021 onwards as structural reforms such as the Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC) are set to produce the benefits.

On the global front, Asian markets ended mostly lower on Monday, as investors scaled back expectations of an aggressive interest rate cut by the Federal Reserve, while heightened Middle East tensions following Iran’s seizure of a British tanker lifted crude oil prices. European markets were trading in green, shrugging off dialed-down expectations for a big U.S. rate cut this month. Back home, stocks related to power sector were in focus with the Institute for Energy Economics and Financial Analysis (IEEFA) stating that India, which is aggressively pushing its policy of adding renewable energy to its energy profile, is likely to obtain 63 percent of its installed power capacity from non-fossil fuel sources, including hydro-electricity, by 2029-30.

The BSE Sensex ended at 38012.51, down by 324.50 points or 0.85% after trading in a range of 37890.32 and 38333.52. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.57%, while Small cap index was down by 1.11%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.91%, Energy up by 1.83%, Oil & Gas up by 0.97%, Basic Materials up by 0.65% and Healthcare up by 0.49%, while Bankex down by 1.52%, FMCG down by 1.36%, Realty down by 1.03%, Consumer Durables down by 0.38% and Industrials down by 0.30% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 9.67%, Vedanta up by 3.88%, Asian Paints up by 2.77%, Reliance Industries up by 2.63% and Maruti Suzuki up by 2.45%. (Provisional)

On the flip side, HDFC down by 5.17%, Kotak Mahindra Bank down by 3.46%, HDFC Bank down by 3.15%, Hindustan Unilever down by 2.32% and Bajaj Finance down by 2.10% were the top losers. (Provisional)

Meanwhile, Asian Development Bank (ADB) in its supplement to Asian Development Outlook (ADO) 2019 has lowered the inflation forecast for India by 0.2 percentage points to 4.1 percent during the current financial year ending in March 2020 (FY20) and 4.4 percent in FY21. It has lowered inflation forecast in light of a smaller-than-expected uptick in food inflation, a strengthening Indian rupee since October 2018, and a lower Gross Domestic Product (GDP) growth forecast of the country.

In its report, ADB said India will be the main driver to lower the inflation for the South Asian region. It added that South Asia's inflation forecast for 2019, was revised down from 4.7 percent to 4.5 percent, mainly reflecting lowered forecasts for India.

According to the ADO supplement, inflation projections for developing Asia were revised up a notch from 2.5 percent to 2.6 percent in both 2019 and 2020, reflecting higher oil prices and several domestic factors. It also said price fluctuations for brent crude oil continue amid various concerns affecting both supply and demand.
The ADO supplement has lowered India's GDP growth forecast by 0.2 percentage points to 7 percent in 2019-20 from 7.2 percent projected in April, on the back of fiscal shortfall concerns. It also lowered its GDP growth forecast for FY 2020-21 to 7.2 percent from 7.3 percent projected earlier.

The CNX Nifty ended at 11341.50, down by 77.75 points or 0.68% after trading in a range of 11301.25 and 11398.15. There were 27 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 9.61%, Vedanta up by 3.75%, Hindalco up by 3.65%, Zee Entertainment up by 3.12% and Indiabulls Housing Finance up by 3.05%. (Provisional)

On the flip side, Bajaj Finserv down by 5.36%, HDFC down by 5.12%, Kotak Mahindra Bank down by 3.56%, HDFC Bank down by 3.14% and Eicher Motors down by 3.08% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 25.15 points or 0.33% to 7,533.85, France’s CAC rose 7.19 points or 0.13% to 5,559.53 and Germany’s DAX was up by 16.65 points or 0.14% to 12,276.72.

Asian markets ended mostly lower on Monday as hopes for an aggressive rate reduction by the US central bank faded and tensions between Britain and Iran rose in the Gulf. Japanese shares closed modestly lower as investors scaled back expectations of a 50-bps rate cut at the July 30-31 Fed meeting. Prime Minister Shinzo Abe's ruling bloc won a solid majority in Japan's upper house election on Sunday, helping limit the downside to some extent. Further, Seoul shares ended little changed with a negative bias after the release of weak trade data showing that the country's exports for the first 20 days of this month declined a sharp 13.6 percent from a year earlier. Investors also took a cautious stance ahead of the corporate earnings season. Moreover, Chinese stocks closed lower as Nasdaq-style technology board on the Shanghai Stock Exchange marked its debut.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,886.97
-37.23
-1.27

Hang Seng

28,371.26
-394.14
-1.37

Jakarta Composite

6,433.55
-22.99
-0.36

KLSE Composite

1,655.40

-2.79

-0.17

Nikkei 225

21,416.79
-50.20
-0.23

Straits Times

3,357.22
-20.74
-0.61

KOSPI Composite

2,093.34
-1.02
-0.05

Taiwan Weighted

10,944.53
71.34
0.66
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