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EQUITY
Post Session: Quick Review
Aug-02-2021

Indian equity benchmarks ended with notable gains on Monday. Markets made a strong start of the day, as the goods and services tax (GST) collection recovered to a three-month high in July, exceeding the Rs 1.1 trillion-mark, as economic activity resumed after most states eased Covid-19 restrictions. Adding more optimism, the government data showed that the output of eight core sectors grew 8.9 per cent in June, mainly due to a low base effect and uptick in production of natural gas, steel, coal and electricity.

Key indices held their gaining momentum during the trading session, as domestic sentiments remained positive, after India's manufacturing sector activities witnessed the strongest rate of growth in three months in July amid improved demand conditions and easing of some local COVID-19 restrictions. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) rose from 48.1 in June to 55.3 in July, pointing to the strongest rate of growth in three months.

Markets remained higher for the whole trading session, taking support with commerce Minister Piyush Goyal’s statement that India and the US are 'natural partners' and services trade will play a critical role in ever-expanding business ties. The minister also said that the services sector holds a lot of promise in aiding India's economic recovery in the post Covid period. Traders remained optimistic after India’s unemployment rate fell to a four-month low of 6.95% in July, staging a near-complete recovery in all parameters of the labour markets, which were hit by the second wave of the pandemic. The labour participation rate, unemployment rate and employment rate have all bounced back to close to their March 2021 levels.

On the global front, European markets were trading higher with rising to a new record on earnings updates and easing concern about China’s regulatory crackdown. Asian markets ended mostly higher on Monday, after the manufacturing sector in China continued to expand in July, albeit at a slower pace, the latest survey from Caixin showed on Monday with a manufacturing PMI score of 50.3. That's down from 51.3 in June, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The BSE Sensex ended at 52950.63, up by 363.79 points or 0.69% after trading in a range of 52804.08 and 52986.77. There were 21 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.05%, while Small cap index up by 1.07%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 4.88%, Oil & Gas up by 1.85%, Energy up by 1.74%, Consumer Disc up by 1.32% and Auto up by 1.31%, while there were no losing sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Titan Co up by 3.25%, Mahindra & Mahindra up by 1.97%, Reliance Industries up by 1.77%, Axis Bank up by 1.69% and TCS up by 1.59%. On the flip side, Tata Steel down by 1.66%, Bajaj Finserv down by 0.68%, Bajaj Finance down by 0.48%, NTPC down by 0.34% and Dr. Reddy's Lab down by 0.23% were the top losers. (Provisional)

Meanwhile, Indian manufacturing activity improved in the month of July, as output, new orders, exports, quantity of purchases and input stocks all returned to expansion territory, while a marginal increase in employment ended a 15-month sequence of job shedding. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 55.3 in July as against 48.1 in June.

The report further said that factory orders rose amid reports of improved demand and the easing of some local COVID-19 restrictions. The upturn was sharp and compared with a marked decline in June. Strengthening international demand contributed to the uptick in total order books. New export orders expanded markedly in July, following a moderate contraction in June.

On the price front, with demand for inputs outstripping supply, there was another substantial increase in purchasing prices. The rate of cost inflation remained above its long-run average, but eased to a seven-month low. Output charges also increased at a slower rate, the weakest in 2021 so far. But here the rate of inflation was slight and below its long-run average.

The CNX Nifty ended at 15885.15, up by 122.10 points or 0.77% after trading in a range of 15834.65 and 15892.90. There were 40 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were Shree Cement up by 3.64%, Titan Co up by 3.32%, Eicher Motors up by 2.86%, BPCL up by 2.76% and Grasim Industries up by 2.60%. On the flip side, UPL down by 2.16%, Tata Steel down by 1.69%, Bajaj Finserv down by 0.68%, Bajaj Finance down by 0.44% and NTPC down by 0.38% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 65.74 points or 0.93% to 7,098.04, France’s CAC increased 55.57 points or 0.84% to 6,668.33 and Germany’s DAX was up by 42.74 points or 0.27% to 15,587.13.

Asian markets ended mostly higher on Monday, despite data showed the world's second-biggest economy China's factory activity expanded at a slower pace in July. The official Purchasing Managers' Index fell to 50.4 in July from 50.9 in June, while the Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) dropped to 50.3 last month from 51.3 in June, marking the lowest level in 15 months. Japanese shares ended higher as investors focus shifted to corporate earnings from big companies due this week, while upbeat manufacturing data also supported market sentiment. The latest survey from Jibun Bank showed that the manufacturing sector in Japan expanded at a faster pace in July, with a manufacturing PMI score of 53.0, up from 52.4 in June. However, continued concerns about the spread of the highly contagious coronavirus variants and the resultant state of emergencies to contain the virus, capped the upside.

Asian Indices

Last Trade           

Change in Points

Change in %    

Shanghai Composite

3,464.29
66.93
1.97

Hang Seng

26,235.80
274.77
1.06

Jakarta Composite

6,096.54
26.50
0.44

KLSE Composite

1,493.00

-1.60

-0.11

Nikkei 225

27,781.02
497.43
1.82

Straits Times

3,161.22
-5.72
-0.18

KOSPI Composite

3,223.04
20.72
0.65

Taiwan Weighted

17,503.28
255.87
1.48
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