Post Session: Quick Review

Local equity markets resumed their downtrend after a session of breather on Thursday. In the extremely dismal session of trade, benchmark equity indices kept languishing into negative territory, though some buying emerged in the second half of the session, benchmarks yet again succumbing to selling pressure, concluded at day’s low by close of trade. Sustained foreign fund outflows, tracking weak global cues amid plunging crude prices mainly dragged the benchmarks lower. Besides, caution ahead of the release of key macroeconomic data, i.e, consumer price index (CPI) based inflation and Index of Industrial Production (IIP) data also weighed on the sentiments. While, the street expects CPI inflation to be around 4.4% in November compared with 5.52% in October, IIP is expected to grow 2.7% in October compared with 2.5% in September. By close of trade, both Sensex and Nifty settled below crucial 28,000 and 8,300 levels respectively, with losses of around 1%. Meanwhile, broader indices also settled with losses of around 0.70%.

On the global front, Asian stocks fell early on Thursday as falling oil prices continued to feed into global growth concerns. Crude oil prices fell as much as 5% overnight on weak US demand and Saudi Arabia reaffirming that it has no plans to curb output. Meanwhile, European shares fell in early trading on Thursday, losing ground for the fourth session in a row, as the slump in oil and iron ore prices knocked resource-related shares lower.

Closer home, all the sectoral indices on BSE capitulated to selling pressure, however stocks from Healthcare counter was the only gainer. On the flip side, stocks from Oil & Gas, Realty and Information Technology counters were the only losers. Meanwhile, in stock specific activity, sugar stocks like Balrampur Chini , Bajaj Hindusthan, Shree Renuka Sugars rallied 7-8 percent on Thursday as the government has fixed a price of Rs 48.50-49.50 per litre for procurement of ethanol for blending with petrol, a rate much higher than the price oil companies presently pay to buy the sugarcane extract.

On the flip side, PSU bank stocks which lost fervor in early session after Union Cabinet chaired by Prime Minister, Narendra Modi gave its approval for allowing Public Sector Banks (PSBs) to raise capital to meet their additional capital requirements under BASEL-III by diluting government holding upto 52% in a phased manner, made comeback in the dying hours of trade. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1469:534; while 31 shares remained unchanged.

The BSE Sensex concluded at 27595.58, down by 235.52 points or 0.85% after trading in a range of 27539.47 and 27796.34. 9 stocks advanced against 21 stocks declining on the index. ( Provisional)

The broader indices too concluded into negative territory; the BSE Mid cap index was down by 0.65%, while Small cap index down by 0.72%. ( Provisional)

The top losers sectoral indices on the BSE were Oil & Gas down by 2.55%, Realty down by 2.32%, IT down by 1.19%, TECK down by 1.07%, Power down by 1.07%. On the flip side, Healthcare up by 0.19% was the lone gainer on BSE. (Provisional)

The top gainers on the Sensex were Hindalco up by 1.17%, Coal India up by 1.10%, Maruti Suzuki up by 0.57%, Dr. Reddys Lab up by 0.41% and ITC up by 0.39%. On the flip side, ONGC down by 3.10%, Tata Steel down by 3.08%, Reliance Industries down by 2.85%, GAIL India down by 2.78% and Bharti Airtel down by 2.63% were the top losers. (Provisional)

Meanwhile, ahead of the meeting with state finance ministers to iron out contentious issues over GST implementation, Finance Minister Arun Jaitley has asserted that the government will soon release Rs 11,000 crore towards Central Sales Tax (CST) compensation, as part of consensus building for Goods and Services Tax (GST) rollout. The Minister stressed that despite the challenging revenue condition, the government will release about Rs 11,000 crore, which is one-third this year, as a part payment of CST compensation to the states and balance amount will start being paid from the next financial year. The GST roll out has missed several deadlines because of lack of consensus among Centre and states over certain crucial issues like CST compensation. The states still wait for Rs 13,000 crore CST compensation arrears pending till 2010 and have also sought a five-year compensation mechanism from the Centre and demanded the same to be included in the GST Constitutional Amendment Bill. States have also been demanding that petroleum, alcohol and tobacco should be kept out of the purview of the GST.

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.

The CNX Nifty settled at 8292.90, down by 62.75 points or 0.75% after trading in a range of 8272.40 and 8348.30. There were 15 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were IDFC up by 2.05% and Tech Mahindra up by 1.84% and Hindalco up by 1.01% and Coal India up by 1.01% and Kotak Mahindra Bank up by 0.89%. On the flip side, Jindal Steel & Power down by 3.53%, ONGC down by 3.23%, Tata Steel down by 3.18%, Reliance Industries down by 2.83% and Bharti Airtel down by 2.83% were the top losers. (Provisional)

European Markets recovered from day’s low; with France’s CAC trading higher by 5.86 points or 0.14% to 4,233.77; Germany’s DAX advancing by 30.21 points or 0.31% to 9,829.94 and  UK’s FTSE 100 losing by 3.24 points or 0.05% to 6,496.80.

The Asian equity benchmarks ended in red on Thursday, on global growth concerns and as tumbling oil prices hit energy firms. Most emerging Asian currencies firmed up as the dollar broadly slid with investors taking profits ahead of the year-end, while Malaysia’s ringgit fell after OPEC cut its forecast for global oil demand next year. Japanese voters head to the polls in three days, with the focus on Prime Minister Shinzo Abe’s economic policies. A revised report on gross domestic product this week confirmed the economy had entered a recession, contracting for two straight quarters since an April sales-tax increase. Japan’s Core Machinery Orders fell to -6.4% compared to 2.9% in the preceding month.

China’s benchmark interest-rate swap climbed by the most since March and money-market rates increased, as the central bank refrained from offering reverse-repurchase agreements in auction window. The People’s Bank of China conducted no open-market operations today for the fifth auction window in a row, having last offered repurchase agreements on November 18. Moody’s Investors Service upgraded its rating on the Philippines by one notch to Baa2 from Baa3 with a stable outlook, citing a decline in the Philippines’ debt burden and structural improvements in fiscal management.