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Key indices end higher on Monday
Aug-02-2021

Indian equity benchmarks closed with gains of over half percent on Monday paced by strong buying interest in index heavyweights Titan Company, Mahindra & Mahindra and Reliance Industries. Strong trend in other global markets also added to bullish sentiment. Benchmarks opened a day with good gap and managed to hold bullish stream throughout day, as Goods and Services Tax (GST) mop-up grew 33 percent year-on-year in July to over Rs 1.16 lakh crore, indicating that the economy is recovering at a fast pace. This is the second highest collection so far this fiscal after a record Rs 1.41 lakh crore mop-up in April. Sentiments got the boost as the growth of eight core infrastructure industries grew by 8.9 percent in June 2021 as compared to same month last year, mainly due to a low base effect and uptick in production of natural gas, steel, coal and electricity. Some support also came 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.

Markets sentiment remained bullish in the afternoon session 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. Traders also 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. Meanwhile, data released by the Controller General of Accounts (CGA) showed that the central government's fiscal deficit stood at Rs 2.74 trillion or 18.2 per cent of the full year's Budget estimate at the end of June. The fiscal deficit at the end of June 2020 was 83.2 per cent of the Budget Estimates (BE) of 2020-2 at Rs 6.62 trillion, after a fall in tax receipts due to pandemic lockdown that led to the worst recession in seven decades.

On the global front, Asian markets ended mostly higher on Monday with upbeat economic data from the United States and Europe and progress on a U.S. infrastructure spending bill boosting sentiment. Besides, the latest survey from Jibun Bank showed 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. Back home, on the sectoral front, power stocks were buzzing with power ministry data showing that India's power consumption grew nearly 12 per cent in July to 125.51 billion units (BU) and returned to pre-pandemic level mainly due to easing of lockdown curbs and delayed monsoon.

Finally, the BSE Sensex rose 363.79 points or 0.69% to 52,950.63, while the CNX Nifty was up by 122.10 points or 0.77% to 15,885.15.    

The BSE Sensex touched high and low of 52,986.77 and 52,804.08, respectively and there were 21 stocks advancing against 9 stocks declining on the index.

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

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 discretionary up by 1.32% and Auto up by 1.31%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Titan Company 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.

Meanwhile, finance ministry has said that Goods and Services Tax (GST) mop-up grew 33 percent year-on-year in July to over Rs 1.16 lakh crore, indicating that the economy is recovering at a fast pace. This is the second highest collection so far this fiscal after a record Rs 1.41 lakh crore mop-up in April. GST collection in July 2020 was Rs 87,422 crore. Sequentially, it was Rs 92,849 crore in June this year.

The gross GST revenue collected in July 2021 is Rs 1,16,393 crore of which Central GST is Rs 22,197 crore, State GST Rs 28,541 crore, Integrated GST Rs 57,864 crore (including Rs 27,900 crore collected on import of goods), and cess is Rs 7,790 crore (including Rs 815 crore collected on import of goods). The revenues for July 2021 are 33 percent higher than GST collected in the same month last year and include GST returns filed between July 1-31 as well as IGST and cess collected from imports for the same period.

During the month, revenues from the import of goods were 36 percent higher and the collection from domestic transactions (including import of services) were 32 percent higher than the revenues from these sources during the same month last year.

The CNX Nifty traded in a range of 15,892.90 and 15,834.65 and there were 37 stocks advancing against 13 stocks declining on the index.     

The top gainers on Nifty were Titan Company up by 3.58%, Shree Cement up by 3.52%, BPCL up by 3.05%, Adani Ports and SEZ up by 2.93 and Eicher Motors up by 2.89%. On the flip side, UPL down by 2.25%, Tata Steel down by 1.49%, Bajaj Finserv down by 0.62%, Bajaj Finance down by 0.41% and Tech Mahindra down by 0.29% were the top losers.

European markets were trading higher;  UK’s FTSE 100 increased 67.48 points or 0.96% to 7,099.78, France’s CAC increased 53.58 points or 0.81% to 6,666.34 and Germany’s DAX increased 26.31 points or 0.17% to 15,570.70.

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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