The domestic equity market registered smart gains Friday, following the previous days roller-coaster trading that left most shares in the red. The barometer index, the S&P BSE Sensex, rose 284.32 points or 0.75% to 37,947.88, as per the provisional closing data. The Nifty 50 index rose 79.30 points or 0.70% to 11,464.35, as per the provisional closing data. Positive global cues apparently helped brighten sentiment as the week came to an end, with investors cheering Washington and Beijing's decision to hold trade talks next week. The Sensex pared gains after touching the psychologically important 38,000 mark in mid-afternoon trade.
After a gap-up opening, the indices firmed up and hit fresh intraday high in mid-afternoon trade. The Sensex rose 358.76 points, or 0.95% at the day's high of 38,022.32 in mid-afternoon trade. The index rose 176.60 points, or 0.47% at the day's low of 37,840.16 in early trade. The Nifty rose 101.40 points, or 0.89% at the day's high of 11,486.45 in mid-afternoon trade. The index rose 46.75 points, or 0.41% at the day's low of 11,431.80 in early trade.
Among secondary barometers, the BSE Mid-Cap index rose 0.88%. The BSE Small-Cap index rose 0.94%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,625 shares rose and 1,082 shares fell. A total of 155 shares were unchanged.
Yes Bank (up 3.78%), State Bank of India (up 3.14%), Vedanta (up 2.85%), Hindustan Unilever (up 2.68%), Tata Motors (up 2.35%), Tata Steel (up 2.21%) and ITC (up 2.12%), were the major Sensex gainers.
Hero MotoCorp (down 1.19%), Maruti Suzuki India (down 0.68%), ONGC (down 0.67%), Coal India (down 0.44%), Bajaj Auto (down 0.34%) and Power Grid Corporation of India (down 0.27%), were the major Sensex losers.
IT major TCS rose 0.15%. The company was awarded a new contract by the Improvement Service, the national organisation for improving local government services and digital transformation in Scotland. TCS will continue to deliver a digital platform for the award-winning authentication "myaccount" service and its broader portfolio, providing Scottish households with beneficial online public services. The announcement was made after market hours yesterday, 16 August 2018.
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On the economic front, India's monetary policy committee members had cited possible risks of inflation in the second-half of the year as key driver for rate hike in August, according to minutes of the meeting released by the Reserve Bank of India (RBI) on Thursday. Five out of 6 members voted for a rate hike at the August meeting and to retained its neutral policy stance amid various uncertainties on the growth front.
The minutes show that the impact of financial market volatility, currency and trade wars was looked at both from the growth and inflation angles. The five members who voted for a rate hike believed that spillovers from trade wars have the potential to infuse greater volatility into the domestic inflation print. The twelfth meeting of the Monetary Policy Committee (MPC) was held from 30 July 2018 to 1 August 2018 at the Reserve Bank of India, Mumbai.
Overseas, European shares reversed early gains while Asian shares were mixed. US stocks rallied to close higher Thursday, on strong corporate earnings from Walmart Inc. and Cisco Systems Inc. News that the US and China are prepared to resume trade talks next week also bolstered investors' sentiment.
Lower-level trade talks between US and Chinese officials will take place on August 22 and 23, the media reported, offering financial markets hope that the globe's two largest economies could end trade tensions.
On the data front, initial jobless claims, a measure of layoffs in the US, fell in early August and returned near a post-recession low. New claims declined by 2,000 to 212,000 in the seven days from August 5 to August 11. The Philadelphia Fed manufacturing index sank to a 21-month low of 11.9 in August. Construction of new houses increased by less than 1% in July, reflecting a recent slowdown in building that is likely tied to higher mortgage rates and growing shortages of skilled craftsmen.
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