Post Session: Quick Review

Local equity markets consolidated on Thursday after hitting record highs in previous trading session due to lack of directional cues from the global market and absence of substantial positive triggers at the domestic front, despite this the trend remained largely positive.

Prevailing cautiousness ahead of the winter session of parliament, which begins next week, and RBI's policy review due on December 2, 2014, which kept investors at the tenterhooks limited further gains of local equity markets. Nevertheless, late surge, which was witnessed in today’s trade, ensured a positive close of local equity markets. Both, Sensex and Nifty accumulating modest gains in the range of 0.10%-0.20%, concluded above psychologically crucial 28,050 and 8,400 levels respectively. However, broader indices acting contrary to the trend went home with losses in the range of 0.05%-0.30%.

On the global front, Asian stocks mostly fell on Thursday as factory output data suggesting that China’s economy was slowing dampened investor sentiment. The China flash HSBC/Markit manufacturing purchasing managers’ index published on Thursday showed factory output contracted in the world’s second-biggest economy for the first time in six months. On the flip side, data from Japan showed that exports rose 9.6 percent on an annual basis, above the 4.5 percent rise forecast, and following a 6.9 percent rise in September. Imports, meanwhile, rose 2.7 percent from the year-ago period, below expectations of a 3.4 percent rise and after rising 6.2 percent in September, leaving behind a trade deficit to 710 billion yen, better than expectations of a 1.05 trillion yen deficit. Meanwhile, European stocks dropped, led by a decline in commodity producers, as Federal Reserve members weighed the need to communicate more about the timing of rate increases.

Closer home, most of the sectoral indices on BSE concluded into negative territory, nevertheless stocks from Consumer Durables, Realty and Metal counters were the top losers. On the flip side, stocks from IT, Healthcare and Technology counters emerged out to be investor’s favorites. IT and Pharma stocks rallied on the back of rupee’s weakness, which hit a nine-month low level on the back of strength in dollar index against the basket of other major currencies. The market breadth on the BSE remained in the favour of decliners, where advancing and declining stocks were in a ratio of 1373:1631, while 117 scrips remained unchanged. (Provisional)

The BSE Sensex ended at 28067.56, up by 34.71 points or 0.12% after trading in a range of 27915.23 and 28118.53. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in the in red; the BSE Mid cap index was down by 0.07%, while Small cap index down by 0.28%. (Provisional)

The gaining sectoral indices on the BSE were IT up by 1.27%, healthcare up by 0.98%, TECK up by 0.81%, FMCG up by 0.39% and Bankex up by 0.37%, while Consumer Durables down by 1.72%, Realty down by 1.52%, Metal down by 0.84%, Power down by 0.78%, Capital Goods down by 0.72% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Cipla up by 4.13%, SBI up by 2.01%, Wipro up by 1.55%, Tata Power up by 1.19% and TCS up by 1.02%. On the flip side, Sesa Sterlite down by 2.39%, NTPC down by 1.80%, Larsen & Toubro down by 1.10%, Tata Steel down by 1.05% and Bharti Airtel down by 0.95% were the top losers. (Provisional)

Meanwhile, In an encouraging development for the country, the Organization for Economic Cooperation and Development (OECD) pointed that economy is coming out of its worst slowdown in a quarter-century and implementation of new reforms held the key for putting the economy on a strong and sustainable growth path of 8%.

The Paris-based think-tank pegged India’s growth rate, which languished at below 5% for the last two fiscal due to high interest rates, stubborn inflation and weak investment to grow by 6.6% in 2015-16, up from its last forecast of 5.7% growth in May and to edge higher to 6.8% in 2016-17.

It, however, emphasized to achieve 8% growth rate, the economy would have to undertake sweeping reform measures, like switching subsidy spending to social and physical infrastructure, bringing in tax reforms, cleaning up the banking system to free up funds for infrastructure and reducing structural barriers for job creation by bringing in labour reforms among other things.

The Paris-based think-tank also pushed for early implementation of the goods and services tax (GST) to improve public finances and also stressed on the need for India to improve the quality of its fiscal consolidation both by the Centre and the states.

In yet another positive, the OECD, in its latest forecast, pegged inflation to fall to 5.4% in 2015-16 and nudge higher to 5.6% the following fiscal year, after 6.9% in 2014-2015. In May, it forecast that inflation would remain above 6 percent over the next few years.

Notably, OECD in its key recommendations suggested that India to Improve the macroeconomic framework by introducing flexible inflation targeting, pursuing fiscal consolidation and implementing a national value-added tax and strengthening banking oversight. OECD also added that it could boost manufacturing jobs by simplifying labour laws, improving access to education, accelerating approvals for infrastructure projects and improving the business climate.

India VIX, a gauge for markets short term expectation of volatility slipped 1.25% at 14.16 from its previous close of 14.34 on Wednesday. (Provisional)

The CNX Nifty ended The CNX Nifty is currently ended at 8401.90, up by 19.60 points or 0.23% after trading in a range of 8353.15 and 8410.85. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Kotak Mahindra Bank up by 7.35%, Cipla up by 3.22%, Tech Mahindra up by 2.99%, SBI up by 2.08% and Cairn India up by 1.97%. On the flip side, Jindal Steel & Power down by 3.78%, Zee Entertainment down by 3.45%, NMDC down by 3.05%, Sesa Sterlite down by 2.41% and DLF down by 1.84% were the top losers. (Provisional)

European Markets were trading mostly in the red; France’s CAC was down by 0.77%, Germany’s DAX was down by 0.49% and UK’s FTSE 100 was down by 0.43%.

Asian markets ended mostly in red on Thursday, with Japanese stock rising as yen fell to a seven-year low against the dollar after minutes of the Federal Reserve highlighted a divergence in global monetary policy. In China, the flow of data was again disappointing as an early reading on HSBC/Markit’s manufacturing purchasing managers’ index (PMI) showed a drop to a six-month low of 50.0 in November, from 50.4 in October. A cooling property sector, erratic foreign demand and overcapacity have weighed on its manufacturers and the broader economy this year despite a steady stream of stimulus measures. China’s annual growth slowed to 7.3% in the third quarter, leaving 2014 on track to be slowest in 24 years. Japanese exports grew in October at the fastest pace in eight months, an encouraging sign that global demand could help the country recover from recession and support the central bank’s optimistic economic outlook. The 9.6% annual rise in exports in October was more than double the 4.5% gain expected. Japan’s trade balance rose to a seasonally adjusted -0.98T, from -1.07T in the preceding month. In another sign that the world’s third-largest economy is regaining its footing, a private flash survey showed that factory output grew in November at the fastest pace since March.