Post Session: Quick Review

Fire-works were witnessed on the auspicious occasion of ‘Diwali’ at Dalal Street, which led to Sensex and Nifty ending above psychologically crucial 26,700 and 7,950 levels respectively, with sparkling gains of over half a percent. Sustained buying activities by funds and investors, after the Government announced more reforms and recommended the promulgation of an ordinance to facilitate e-auction of coal blocks for private companies for captive use and allot mines directly to state and central PSUs, mainly drove the bulls berserk. Additionally, sentiments also were buttressed after India's decision to remove price controls on diesel and to raise natural gas prices, which signaled fiscal discipline was termed a 'credit positive' step by Moody’s, which also noted that fiscal savings for the government's diesel measures were likely to be limited given total subsidies account for less than 1% of the country's 2013/14 gross domestic product. In the broad-based buying session of trade, broader indices outperforming larger counterparts concluded with gains of over a percent.

On the global front, Asian shares rose on Wednesday as upbeat results from two U.S. technology bellwethers and hopes of fresh stimulus from the European Central Bank offset concerns about the outlook for the global economy. Meanwhile, European shares succumbing to selling pressure were trading lower despite raft of positive corporate results from companies including ABB and Husqvarna lifting sentiment. Shares in Swiss engineering group ABB were the top gainers among European blue-chips, gaining 2.7 percent after posting a bigger-than-expected rise in orders, helped by demand from the oil and gas industries.

Closer home, all the sectoral indices on BSE, besides PSU stocks, cheering the occasion, went home with splendid gains, nevertheless top gainers were the stocks belonging from Auto, Capital Goods and Consumer Durable counters. Capital goods counter’s gains were led by L&T stocks which rose after company’s closure of foreign currency convertible bonds offering. Meanwhile, banking and realty counters stocks were upbeat for yet another session on rate cut hopes. The market breadth on the BSE remained in the favour of advances; where advancing and declining stocks were in a ratio of 1790:1030, while 109 scrips remained unchanged. (Provisional)

The BSE Sensex ended higher at 26787.23, up by 211.58 points or 0.80% after trading in a range of 26712.21 and 26818.33. There were 21 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.21%, while Small cap index up by 1.17%. (Provisional)

The gaining sectoral indices on the BSE were Auto up by 2.97%, Capital Goods up by 2.08%, Consumer Durables up by 1.16%, IT up by 0.71% and TECK up by 0.64% while, PSU down by 0.42% were the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Cipla up by 4.03%, Hero MotoCorp up by 3.87%, Bajaj Auto up by 3.76%, Tata Motors up by 3.46% and Maruti Suzuki up by 3.26%. On the flip side, ONGC down by 1.72%, ITC down by 0.65%, NTPC down by 0.64%, ICICI Bank down by 0.37% and Bharti Airtel down by 0.33% were the top losers. (Provisional)

Meanwhile, with an aim to implement the Goods and Service Tax (GST) soon and to provide impetus to Indian industry, Finance Minister Arun Jailtley has stated that the revised Constitution Amendment Bill to roll out GST would be introduced in the forthcoming Winter Session of Parliament. By adding further, Finance Minister stressed that the first tranche of compensation to States for their revenue loss arising due to phasing out of Central Sales Tax (CST) may also be taken up in the Winter Session.

The Government proposes to implement the GST from April 1, 2016, and the new Finance Commission is also likely to be set up ahead of its schedule to look into the issues related with the new indirect tax regime.

The proposed GST is one of the biggest taxation reforms in India and will replace existing state and federal levies such as excise duty, service tax and value-added tax (VAT) and will integrate State economies and boost overall growth. Under GST, the taxation burden will be divided equitably between manufacturing and services, through a lower tax rate by increasing the tax base and minimizing exemptions. The industry is awaiting its introduction, as GST would boost revenues and aid economic growth.

India VIX, a gauge for markets short term expectation of volatility dropped 2.25% at 13.03 from its previous close of 13.33 on Tuesday. (Provisional)

The CNX Nifty ended higher at 7995.90, up by 68.15 points or 0.86% after trading in a range of 7974.55 and 8005.00. There were 37 stocks advancing against 13 stocks declining on the index. (Provisional)

The top gainers on Nifty were Jindal Steel & Power up by 10.11%, Kotak Mahindra Bank up by 4.86%, Hero MotoCorp up by 3.99%, Cairn India up by 3.75% and Tata Motors up by 3.53%. On the flip side, ONGC down by 2.10%, NMDC down by 1.17%, DLF down by 1.03%, ICICI Bank down by 0.70% and NTPC down by 0.68% were the top losers. (Provisional)

European Markets were trading mostly in the red; UK’s FTSE 100 was down 0.17% and France’s CAC was down by 0.07%, while Germany’s DAX was up by 0.17%.

Asian markets ended mostly in green on Wednesday, amid speculation that Europe’s central bank would add stimulus. Malaysian Stock Exchange and Singapore Stock Exchange were closed today on account of ‘Deepavali’ holiday. Chinese Premier Li Keqiang stated that the country’s economy for the first three quarters of this year has remained within a reasonable range, accompanied by some positive and profound changes. Acknowledging improvement in structural optimization, employment and energy conservation, Li enlightened that new impetus for the economy have gathered speed, resulting from streamlining administration, delegating powers and other reformative measures. Japan’s three biggest banks may need to raise as much as about $100 billion of capital that can be written down in a crisis to meet proposed global rules for lenders deemed too big to fail. Japan’ trade balance fell unexpectedly last month. The country’s trade balance fell to a seasonally adjusted -1.07T, from -0.91T in the preceding month whose figure was revised up from -0.92T. 

Indonesian banks have enough capital to withstand as much as a 25% drop in government bonds price in the event of foreign capital outflow, according to the latest stress test by the central bank released. The stress test was conducted earlier this month to see the impact of declining assets value and a weakening rupiah to the banks balance sheet.