Market cautious ahead of Economic Survey and Budgetary Outcome
Asian indices held on to gains after a strong Wall Street close
Sensex Today: Benchmark indices Sensex and Nifty ended today's trade marginally higher, one day ahead of the Union Budget. While Sensex rose 68 points to 39,908, Nifty gained 30 points to 11,946.
The country's inflation rate has moved to a more stable and low level in the last five fiscals, and controlling price surge remains a key policy focus area of the government, the Economic Survey for 2018-19. (PTI)
Economic Policy Uncertainty index is very strongly correlated to volatility in exchange rate, stock market & inflation and various other macroeconomic variables. There is a correlation of around 0.7 between volatility in exchange rate and EPU index. The EPU index closely tracks both the deterioration of the future expectation index and India VIX index which monitors the volatility in stock market.
The CIRP yielded a resolution of 94 cases which has resulted in the settlement of claims of FCs of Rs 1,73,359 crore. These cases include 6 out of 12 large accounts - insolvency resolution in respect of which was initiated by banks, as per directions of the RBI in 2017.
The IBC was enacted on May 28, 2016. The Government moved quickly to operationalize the IBC.
The IBC cases registered represents that 42% of cases filed are from the manufacturing sector covering industries like steel, fast moving consumer goods (FMCG), chemical products, electrical machinery, basic metals, etc.; 20 per cent in real estate; 10 per cent in engineering, procurement,and construction (EPC) sector and 10 per cent in trading companies. Other sectors under stress are textiles, power & utilities, FMCG, and hospitality.
The growing number of cases by the FCs indicate that the IBC has already struck a chord with the banks and financial institutions, who view the IBC as a preferred mode to resolve distressed assets and maximize returns.
As on March 31, 2019, 2,456 IPs were registered with the IBBI from different parts of the country. The highest concentration of IPs is in New Delhi (22 per cent) and Mumbai (16 per cent).
Investment rate seen higher in FY20 on higher credit growth. Growth in current fiscal is driven by investment, consumption and investment is the "key driver" of simultaneous growth in demand, jobs, exports & productivity. The image above depicts that after falling for close to a decade since 2008, investment activity has turned the corner since Q1 of 2017-18. As per the chart, since Q1 of 2017-18, there has been an improvement in the investment rate, even with the marginally lower GPD growth rate over the years.
S&P BSE Sensex, the benchmark index of Bombay Stock Exchange (BSE), closed at 38,673 on March 31, 2019, witnessing an increase of 17.3 per cent from its closing value of 32,969 as on March 31, 2018
In addition, Nifty 50, the benchmark index of National Stock Exchange (NSE) closed at 11,624 on March 31, 2019, witnessing a gain of 14.9 per cent from its closing value of 10,114 as on March 31, 2018.
In banking, the survey stated that the performance of the banking system has improved as NPA ratios declined and credit growth accelerated.However, financial flows to the economy remained constrained because of decline in the amount of equity finance raised from capital markets and stress in the NBFC sector. Capital mobilized through public equity issuance declined by 81 per cent in 2018-19. Credit growth rate y-o-y of the NBFCs have declined from 30 per cent in March 2018 to 9 per cent in March 2019
As per the Economic Survey, there was a net outflow of Rs 5,499 crore by FPIs in 2018-19 compared to an inflow of Rs 22,466 crore in 2017-18. Total cumulative investment by FPIs decreased to Rs 2,48,154 crore as on March 31 2019 as against Rs 2,53,653 crore as on March 31 2018.
GM Breweries, as per company announcement, will be submitting financial earnings result for the quarter ending June 30. The stock is trading down at Rs 505.25, at a loss of 4.75 or 0.93% currently, with a spurt in volumes traded.
After the release of Economic Survey, PSU Bank fell from earlier gains and currently advances as the major leading sector at 1.65% gain, followed by 1.41% gain in Realty sector. FMCG has turned flat, while Metal is the most declining sector for the day, at a loss of 0.55%, followed by 0.12% loss in Pharma. Nifty CPSE and PSE are also trading down.
INDIA Vix on the release day of Economic Survey stands at 13.4975, at a fall of 0.20 % or 1.44% against yesterday's close of 14, indicating lower volumes and weak volatility in the market.
"The theme of EcoSurvey2019 is to enable "shifting gears" to accelerate and sustain a real GDP growth rate of 8% and thereby achieve the vision of Economy5trillion," tweeted CEA KV Subramanian.
The cover design of #EcoSurvey2019 of Inter-linked Gears captures the idea of investment, savings, exports, growth and jobs being complementary and forming a “Virtuous Cycle” with investment as the key driver. 3/3@FinMinIndia@PIB_India@nsitharamanoffchttps://t.co/0FZjMIr8Ty
— K V Subramanian (@SubramanianKri) July 4, 2019
The cover design of #EcoSurvey2019 of Inter-linked Gears captures the idea of investment, savings, exports, growth and jobs being complementary and forming a “Virtuous Cycle” with investment as the key driver. 3/3@FinMinIndia@PIB_India@nsitharamanoffchttps://t.co/0FZjMIr8Ty
— K V Subramanian (@SubramanianKri) July 4, 2019
Shares of Kolte-Patil Developers rose 4 percent on Thursday as it announced to the exchanges that the firm plnas to develop over 1250 units over 3 projects in Pune with saleable potential of over 1.2 m sqaure feet.
The firm expects to earn fees of Rs 60-65 cr over 30-36 months from development management.
The survey said that the moderation of growth momentum was on account of Agriculture & Allied, Trade, hotel ,transport, storage, communication and service related to broadcasting and Public administration and defense sectors.
The survey further added that higher economic growth in the ongoing fiscal year is predicted owing to stable macroeconomic conditions. The survey said that NBFC has stressed the FY19 slowdown.
The survey said that the outlook of the Indian Economy looks bright for the year 2019-20 on back of pick up private investment and robust consumption growth.
It added that the nation has maintained its macroeconomic stability by containing inflation within 4% and by managing a current account deficit to GDP ratio.
Non-Performing Assets as a percentage of Gross Advances have reduced to 10.1 % at the end of December 2018 from 11.5 % at the end of March 2018.
Share price of Cox & Kings currently trade at Rs 29.80, with a fall 4.94% with the opening bell and locked in lower circuit as the firm defaulted on payment of interest on NCD due on June 30. It has touched a new 52-week and all time low of Rs 29.80. There are only sellers and no bids standing for the share today
India’s monsoon rains in the week ending on Wednesday were below average for the fifth time in a row, although the deficit was the lowest since the start of the season, after it revived in central and western regions.
Monsoon rains are crucial for farm output and economic growth, as about 55% of India’s arable land is rain-fed, and agriculture forms about 15% of a $2.5-trillion economy that is the third biggest in Asia.
India's #monsoon rain below average for fifth straight week https://t.co/4boJuM2Rd5
— Reuters India (@ReutersIndia) July 4, 2019
India's #monsoon rain below average for fifth straight week https://t.co/4boJuM2Rd5
— Reuters India (@ReutersIndia) July 4, 2019
Indian Rupee opens higher at 68.82 against the dollar. Later, it rose to 68.87, up by 0.12% against the last close. Rupee yesterday closed at 68.91 per dollar.
Gold steadied on Wednesday, paring earlier gains as a rally in equities reduced the attraction of the non-yielding metal, while global growth concerns and prospects for dovish monetary policy kept bullion supported. (Reuters)
Oil prices edge down, pressured by U.S. supply https://t.co/LowR0bhxdTpic.twitter.com/nST62MkJhg
— Reuters Top News (@Reuters) July 4, 2019
Oil prices edge down, pressured by U.S. supply https://t.co/LowR0bhxdTpic.twitter.com/nST62MkJhg
— Reuters Top News (@Reuters) July 4, 2019
IndiaMART InterMESH Ltd listing in the stock exchanges today on July 04, 2019, under the n the list of 'B' Group Securities, with a face value of Rs 10.
After the IPO that raised Rs 476 crore, IndiaMART's stock price that was fixed at the final issue price of Rs 973 per share as the higher end of the price band.
The stock is currently trading at Rs 1175, at a gain of over 20% against the listed price of Rs 973.
The stock has generated an Market Capital of Rs 3,395.43 cr on BSE till now.
Markets opened marginally higher today with Sensex strating at 39,917.65 against yesterday close of 39,839.25 while Nifty50 opened at 11,928.80 aganst th elast close of 11,916.
IndiaMART InterMESH is set to make its debut on bourses on July 4.The company raised Rs 476 crore through the IPO and fixed final issue price at Rs 973 per share as the higher end of the price band.
Market pre-opened positively, with Sensex rising 88 points up at 39,927.72 against the previous close of 39,839.25 and Nifty50 started pre-open session at 11,928.80 level at a gain of 12 points above the 11,916, the last close.
The market has been quite tepid in the past few weeks with Sensex and Nifty trading sideways on back of lower volumes, suggestive that the stocks were being traded cautiously on concerns of economic slowdown that will be the key focus of the Union Budget & Economic Survey.
Indian equities are expected to trade on a flat note today as investors' anticipation were high ahead of the Budget 2019 outcome tomorrow and the Economic Survey scheduled for today at 11: 00 am.
Budget 2019 outcome, on which a lot of hopes and expectations are based, is likely to give market a further direction which currently goes through a correction phase.
On a net basis, foreign institutional investors sold equities worth Rs 390.18 crore, while domestic institutional investors purchased shares to the tune of Rs 287.57 crore, provisional data available with stock exchanges showed Wednesday.
S&P 500 opens at record high on rising rate cut hopes https://t.co/jdbKAG67Ebpic.twitter.com/b9rwRchxFw
— Reuters Business (@ReutersBiz) July 3, 2019
S&P 500 opens at record high on rising rate cut hopes https://t.co/jdbKAG67Ebpic.twitter.com/b9rwRchxFw
— Reuters Business (@ReutersBiz) July 3, 2019
Asian stocks advanced on Thursday, tracking sharp gains on Wall Street as recent data from multiple sectors pointed to slowing economic growth in the United States, bolstering the prospect of rate cuts by the Federal Reserve. (Rueters)
Stocks rally again on expected Fed rate cuts; euro on defensive https://t.co/LdR5HjgyNnpic.twitter.com/BanN0qkJbh
— Reuters Top News (@Reuters) July 4, 2019
Stocks rally again on expected Fed rate cuts; euro on defensive https://t.co/LdR5HjgyNnpic.twitter.com/BanN0qkJbh
— Reuters Top News (@Reuters) July 4, 2019
Key Benchmark indices are expected to open positive today, on account of strong global cues amid investors' anticipation on the Economic Survey, scheduled to be tabled at 1: 00 pm today.