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Indian equity benchmarks ended with marginal gains on Tuesday, on the back of buying in index heavyweights such as Bharti Airtel, Tech Mahindra and HDFC amid a largely positive trend in global markets. Markets made positive start and traded higher for most part of the day, as sentiments got a boost with the Centre for Monitoring Indian Economy (CMIE) data showing that India witnessed an addition of 16 million jobs in July mainly in the agriculture and construction sectors. Some optimism also came with the Finance Ministry’s statement that a Bill to end retrospective taxes imposed on indirect transfer of Indian assets will encourage companies to invest in India and help the country become a $5-trillion economy. Traders also remained positive with private report stating that business resumption activity reached a record high since the start of the pandemic over 15 months ago for the week ended August 8. The Nomura India Business Resumption Index (NIBRI) rose to a record high of 99.4 for the week ending 8 August, from 94.0 last week, near the pre-pandemic level of 100, and surpassing the pre-second wave peak (of 99.3 in mid-February).

However, markets trimmed all the gains in late hour of trading session, as country’s unemployment rate rose to a six-week high of 8.1% in the week ended August 8, 2021. But, markets recovered from blip to end in the green, as country's exports rose by 50.45 percent to $7.41 billion during August 1-7, on account of healthy growth in the shipments of engineering goods, gems and jewellery as well as petroleum products. Some support also came as the Reserve Bank issued draft guidelines to further liberalise regulatory framework governing overseas investments with a view to promote ease of doing business. The RBI has placed on its website two documents -- draft Foreign Exchange Management (Non-debt Instruments - Overseas Investment) Rules, 2021 and draft Foreign Exchange Management (Overseas Investment) Regulations, 2021. Meanwhile, Minister of State for Finance Pankaj Chaudhary’s statement that net Goods and Services Tax (GST) collection in the April-June quarter was over Rs 1.67 lakh crore, which is 26.6 percent of the budget estimate of Rs 6.30 lakh crore for full 2021-22 fiscal.

On the global front, Asian market end mostly higher on Tuesday, ahead of US consumer inflation data due on Wednesday. However, a steep drop in crude oil prices and the surge in the spread of the delta variant of coronavirus and the resultant fresh restrictions in several countries, including China, weighing on investor sentiment. European markets were trading mostly in green, even as the ZEW economic research institute said Economic expectations declined in Germany for a third consecutive month, due to a more challenging environment for the German economy. The headline numbers for August dropped more than expected to 40.4 from 63.3 in July. Back home, on the sectoral front, auto stocks were in focus as India's overall vehicle retail sales on both sequential and year-on-year basis in July 2021 with low base and rising demand. The data released by the Federation of Automobile Dealers Associations (FADA) showed a rise of 34.12 per cent during the month under review from the level of July 2020. 

Finally, the BSE Sensex rose 151.81 points or 0.28% to 54,554.66, while the CNX Nifty was up by 21.85 points or 0.13% to 16,280.10.   

The BSE Sensex touched high and low of 54,779.66 and 54,308.77, respectively and there were 15 stocks advancing against 15 stocks declining on the index. 

The broader indices ended in red; the BSE Mid cap index fell 0.85%, while Small cap index was down by 2.05%.

The top gaining sectoral indices on the BSE were Telecom up by 2.07%, TECK up by 0.89%, IT up by 0.66%, Bankex up by 0.19% and Energy up by 0.07%, while Metal down by 2.72%, Basic Materials down by 2.21%, PSU down by 1.89%, Realty down by 1.85% and Utilities down by 1.74% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.84%, Tech Mahindra up by 2.81%, HDFC up by 1.85%, Kotak Mahindra Bank up by 1.80% and Mahindra & Mahindra up by 1.48%. On the flip side, Tata Steel down by 2.73%, Power Grid Corporation down by 2.21%, NTPC down by 2.14%, ITC down by 1.85% and Bajaj Auto down by 1.64% were the top losers.

Meanwhile, Reserve Bank of India (RBI) has issued draft guidelines to further liberalise regulatory framework governing overseas investments with a view to promote ease of doing business. The RBI has placed on its website two documents -- draft Foreign Exchange Management (Non-debt Instruments - Overseas Investment) Rules, 2021 and draft Foreign Exchange Management (Overseas Investment) Regulations, 2021.

The Draft Foreign Exchange Management (Non-debt Instruments - Overseas Investment) Rules, 2021 has outlined the restrictions on overseas investments. As per the draft, a person resident in India is prohibited from making Overseas Direct Investment (ODI) in a foreign entity engaged in real estate activity; gambling in any form; and offering financial products linked to Indian Rupee except for products offered in an IFSC. Also, it said overseas investment will remain prohibited a foreign entity located in countries/ jurisdictions that are not Financial Action Task Force (FATF) and International Organization of Securities Commissions (IOSCO) compliant country or any other country/ jurisdiction as may be prescribed by the central government.

The other draft on Foreign Exchange Management (Overseas Investment) Regulations, 2021 proposes that an Indian entity may lend or invest in any debt instruments issued by a foreign entity subject to such loans duly backed by a loan agreement and the rate of interest shall be charged on an arm's length basis, among other things.

The CNX Nifty traded in a range of 16,359.25 and 16,202.25 and there were 20 stocks advancing against 29 stocks declining, while 1 stock remain unchanged on the index.     

The top gainers on Nifty were Bharti Airtel up by 3.78%, Tech Mahindra up by 2.76%, HDFC up by 1.80%, Kotak Mahindra Bank up by 1.63% and Mahindra & Mahindra up by 1.38%. On the flip side, Shree Cement down by 4.05%, JSW Steel down by 3.59%, Tata Steel down by 2.84%, Hindalco Industries down by 2.22% and Power Grid Corporation down by 2.07% were the top losers.

European markets were trading mostly in green; France’s CAC increased 4.91 points or 0.07% to 6,818.09 and Germany’s DAX increased 24.29 points or 0.15% to 15,769.70, while UK’s FTSE 100 decreased 9.22 points or 0.13% to 7,123.08.

Asian market ended mostly higher on Tuesday ahead of US consumer inflation data due on Wednesday. Japanese shares ended slightly higher as traders returned to their desks after a long holiday weekend, while cheaper yen against the dollar and positive earnings results from Japanese companies too supported market sentiments. Chinese shares rose as more cities embarked on mass testing and local lockdowns to curb Covid-19 spread. However, South Korean shares ended lower on concerns over surging of delta variant of corona-virus cases. More talks of stimulus withdrawal by the US Federal Reserve too weighed sentiments.

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