Post Session: Quick Review

Indian equity benchmarks ended in red on Friday. After a cautious start, key indices traded in green, taking some support with union Minister Anurag Singh Thakur’s statement that financial inclusion is a top priority for the government and that promoting financial education would help in realising the collective potential. Traders also took some encouragement with Commerce Secretary Anup Wadhawan’s statement the time frame to resume negotiations for the stalled free trade agreement with the European Union (EU) and to initiate fresh talks for a pact with the UK will be very early and the talks will start soon after completion of the preparatory work.

But, in late morning deals, markets turned negative and remained weak till the end of the day, after the Reserve Bank of India’s (RBI's) Monetary Policy Committee has kept policy rates unchanged once again at its bi-monthly review. The Repo rate has been maintained at 4% while the reverse repo rate is at 3.35%. Policy stance has been maintained at accommodative by the central bank in an effort to maintain liquidity in the system as the country continues to recover from the covid-19 pandemic and its economic implications. Traders got worried, as the Reserve Bank lowered the country's growth projection for the current financial year to 9.5 percent from 10.5 percent estimated earlier, amid uncertainties created by the second wave of the coronavirus pandemic.

The street overlooked reports that overall hiring activity has shown some improvement with a marginal 1 percent month-on-month contraction recorded in May as against a decline of 14.95 percent in April. The job postings during May stood at 2,047 compared to 2,072 in April on the Naukri.com platform, according to Naukri JobSpeak Index. Traders took a note of NITI Aayog CEO Amitabh Kant’s statement that in order to shape a post-COVID reality, there is no way out for India but growth. He also emphasised that India has an opportunity to usher in change that will see its society transform within a generation.

On the global front, European markets were trading mostly in red ahead of US jobs data, with economic recovery hopes putting the main index on course for its third straight week of gains. Asian markets ended mostly lower on Friday, after China's service sector growth moderated in May as activity and new order growth softened since April. The survey results from IHS Markit showed that the Caixin services Purchasing Managers' Index dropped to 55.1 in May from a four-month high of 56.3 in April. Nonetheless, the score remained firmly above the neutral 50.0 level to suggest a marked growth in activity. Business activity as well as new orders rose sharply in May, despite rates of expansion softening since April. Customer demand continued to expand due to the successful containment of COVID-19 in China, while there were also reports of new product offerings boosting sales.

The BSE Sensex ended at 52100.05, down by 132.38 points or 0.25% after trading in a range of 51952.70 and 52389.02. There were 13 stocks advancing against 16 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.63%, while Small cap index up by 0.78%. (Provisional)

The top gaining sectoral indices on the BSE were Industrials up by 1.32%, Oil & Gas up by 1.23%, Capital Goods up by 1.12%, Metal up by 0.69% and Utilities up by 0.67%, while Bankex down by 0.95%, Consumer Durables down by 0.75%, FMCG down by 0.39%, Energy down by 0.18% and Healthcare down by 0.12% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Finserv up by 2.53%, ONGC up by 2.24%, Larsen & Toubro up by 1.81%, Bajaj Finance up by 1.56% and HDFC up by 1.42%. On the flip side, Nestle down by 1.97%, SBI down by 1.38%, HDFC Bank down by 1.25%, ICICI Bank down by 1.14% and Axis Bank down by 1.11% were the top losers. (Provisional)

Meanwhile, expressing  optimism, the Commerce Secretary Anup Wadhawan has said that India’s export performance continues to be impressive, with provisional data of merchandise exports in May 2021 showing a significant growth of 67.39 per cent over May 2020 level and 7.93 per cent over May 2019 level.

Wadhawan further said that merchandise export, excluding PoL and Gems & Jewellery, increased by 45.96 per cent in May 2021 over the same period of 2020-21 and by 11.51 per cent over the same period of 2019-20.

On the import front, the Commerce Secretary noted that merchandise imports registered a positive growth of 68.54 per cent during May 2021 vis-a-vis the same period last year. As compared to May 2019, imports have declined by (-) 17.47 per cent during May 2021.

The CNX Nifty ended at 15670.25, down by 20.10 points or 0.13% after trading in a range of 15622.35 and 15733.60. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Grasim Industries up by 3.05%, Tata Motors up by 2.86%, Bajaj Finserv up by 2.84%, Coal India up by 2.72% and ONGC up by 2.41%. On the flip side, Nestle down by 2.09%, SBI down by 1.38%, HDFC Bank down by 1.29%, ICICI Bank down by 1.16% and Axis Bank down by 1.15% were the top losers. (Provisional)

European markets were trading mostly in red, UK’s FTSE 100 decreased 12.34 points or 0.17% to 7,052.01 and France’s CAC was down by 4.99 points or 0.08% to 6,502.93. On the flip side, Germany’s DAX was up by 7.85 points or 0.05% to 15,640.52.

Asian markets ended mostly lower on Friday. Japanese shares retreated as investors await a key US jobs report later in the day, which could provide more clarity on the inflation outlook, while worries about the extension of the Covid-19 state of emergency in several major areas too weighed on market sentiment. Street has predicted an improvement for May, with 650,000 jobs added, compared with April's surprisingly tepid gain of 266,000. The unemployment rate last month is forecast at 5.9%, down from 6.1% in April. However, Chinese shares ended marginally higher despite renewed worries over Sino-US tensions. US President Joe Biden expanded and updated a blacklist of Chinese companies with alleged ties to defence or surveillance technology sectors.