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Indian equity benchmarks swung between gains and losses in a volatile session and managed to end in green on Tuesday, tracking gains in index majors Tech Mahindra, TCS and Nestle. After a cautious start, domestic equities witnessed lackluster movement for most part of the day, as traders got anxious with Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai’s statement that with Kabul falling into the hands of the Taliban, bilateral trade between Afghanistan and India will get impacted significantly in these uncertain times. Some concern also came as a private report stating that consumer confidence on financial preparedness for the future has dropped in the last two years with the onset of the coronavirus pandemic, even as the financial awareness and need for insurance has increased. Besides, the microfinance industry's gross loan portfolio (GLP) marginally declined by around 4 per cent to Rs 2,14,528 crore as of June 30 this year, against Rs 2,24,205 crore as of June 20, 2020, according to a report by Sa-Dhan. Sa-Dhan is an RBI recognised self-regulatory organisation for microfinance institutions.

However, key indices turned sharply higher in the last hour of trade, taking support from Finance Minister Nirmala Sitharaman’s statement that she expects inflation to remain in the prescribed range during the current fiscal. The RBI has been mandated to keep inflation at 4 per cent, with tolerance level of 2 per cent on either side. Some support also came with report that investments by private equity and venture capital funds doubled to a record high of $9.5 billion in July mainly driven by higher investor interest in the e-commerce sector. Private equity (PE) and venture capital (VC) investments stood at $4.1 billion in the year-ago period. Some comfort also came after Retailers Association of India (RAI) said Retail sales across the country continued to recover in July, reaching 72 per cent of the pre-pandemic levels of July 2019, and businesses are pinning hopes on the festive seasons for a further boost. The rate of recovery was 50 per cent of pre-pandemic levels in June 2021.

On the global front, Asian markets settled mostly down on Tuesday, while European markets were trading mostly in red as worries about the impact of the fast-spreading Delta coronavirus variant weighed on sentiment. Traders also awaited U.S. retail sales figures, an address by Federal Reserve Chairman Jerome Powell and the minutes from the U.S. Fed's latest meeting for cues on the economic and interest-rate outlook. Back home, on the sectoral front, sugar industry stocks were in focus with report that the Indian Sugar Mills Association (ISMA) has written to the Prime Minister’s Office (PMO) to immediately increase the Minimum Sale Price (MSP) of sugar from the current Rs 31 per kg to at least Rs 34-35 per kg to help it clear the pending sugarcane dues ahead of the new crushing season that will start from October 2021. Tyre industry’s stocks too were in action as automotive Tyre Manufacturers Association (ATMA) asked the government to allow duty-free import of natural rubber as shortage of the commodity in India has become a major deterrent for the tyre industry to support domestic manufacturing.

Finally, the BSE Sensex rose 209.69 points or 0.38% to 55,792.27, while the CNX Nifty was up by 51.55 points or 0.31% to 16614.60.  

The BSE Sensex touched high and low of 55,854.88 and 55,386.49, respectively and there were 18 stocks advancing against 12 stocks declining on the index.   

The broader indices ended in green; the BSE Mid cap index rose 0.71%, while Small cap index was up by 0.30%.

The top gaining sectoral indices on the BSE were IT up by 2.33%, TECK up by 1.92%, Healthcare up by 1.37%, FMCG up by 1.18% and Consumer Durables up by 0.63%, while Metal down by 2.63%, Telecom down by 1.06%, Basic Materials down by 1.02%, PSU down by 0.96% and Realty down by 0.81% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 3.21%, TCS up by 2.32%, Nestle up by 2.30%, Infosys up by 2.15% and Hindustan Unilever up by 2.10%. On the flip side, Indusind Bank down by 1.78%, NTPC down by 1.26%, Bharti Airtel down by 1.18%, Larsen & Toubro down by 1.10% and Mahindra & Mahindra down by 1.09% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman expects inflation to remain in the prescribed range during the current fiscal (FY22) and the government is regularly monitoring the price movement of essential items. The RBI has been mandated to keep inflation at 4 per cent, with a tolerance level of 2 per cent on either side. She said the Group of Ministers is actively monitoring price movement of essential items like edible oil, pulses, fruits and vegetables, meat etc.

The minister appreciated that states have been very cooperative in terms of going after hoarders and black marketeers. She also said various efforts taken by the government are expected to keep inflation benign and it is expected to remain within the target. She expressed confidence that the revenue would be buoyant in the coming months. Both Goods and Services Tax (GST) and direct taxes have improved in the past few months.

Sitharaman has said that the GST collection this year has improved substantially and as a result there are chances that the government may be able to pay compensation to states from revenue collected. About extending compensation beyond July 2022, she said the GST Council will decide about the issue.

The CNX Nifty traded in a range of 16,628.55 and 16,495.40 and there were 26 stocks advancing against 23 stocks declining, while 1 stock remain unchanged on the index.   

The top gainers on Nifty were Tata Consumer Products up by 3.83%, Wipro up by 3.29%, Tech Mahindra up by 3.15%, Hindustan Unilever up by 2.41% and Nestle up by 2.35%. On the flip side, JSW Steel down by 2.42%, Adani Ports &SE Z down by 2.26%, Tata Motors down by 2.22%, Coal India down by 1.90% and UPL down by 1.60% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 37.23 points or 0.54% to 6,801.54 and Germany’s DAX decreased 42.44 points or 0.27% to 15,883.29, while UK’s FTSE 100 increased 10.11 points or 0.14% to 7,164.09.

Asian markets settled mostly down on Tuesday tracking mixed cues from Wall Street overnight, while geopolitical tensions in Afghanistan and worries over fast-spreading Delta corona-virus variant too weighed sentiments. Investors are now awaiting minutes from the Federal Reserve’s latest meeting, due to be published on Wednesday, for cues on the economic and interest-rate outlook. Chinese shares ended lower due to tensions between China and the United States after the US Securities and Exchange Commission Chair Gary Gensler issued his most direct warning yet about the risks of investing in Chinese companies. Meanwhile, Chinese market regulator issued draft rules aimed at stopping unfair competition on the internet, marking the latest stage of Beijing’s crackdown on the country’s technology sector.

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