Post Session: Quick Review

After resuming its declining streak in previous trading session, local equity markets extended losses for yet another session on Friday, ending with a cut of around a percent, which took Sensex and Nifty below psychologically crucial 27,400 and 8,250 levels respectively. Meanwhile, broader indices also suffered a nasty blow and settled with losses of around 1.20%-1.50%. Prevailing cautiousness ahead of key macroeconomic data, i.e, consumer price index (CPI)-based inflation and Index of Industrial Production (IIP) data on Friday, weighed on the sentiment. On the macro-front, the street widely expects CPI inflation to be around 4.4% in November compared with 5.52% in October, while IIP is expected to grow 2.7% in October compared with 2.5% in September.

On the global front, Asian markets concluded mostly positive despite two contrasting pieces of economic data emerged from China. On one hand, China's industrial output grew by a less-than-expected 7.2% in November from a year ago, on the other, retail sales rose 11.7%, beating forecasts. On the flip side, European shares fell on Friday, with renewed declines in the price of oil hitting energy stocks, while political concerns over Greece also pegged back equities. In Greece, Prime Minister Antonis Samaras on Thursday warned the country risked a 'catastrophic' return to the depths of its debt crisis if his government fell, raising the stakes before a presidential vote this month.

Closer home, most of the sectoral indices on BSE settled into negative territory, nevertheless Healthcare counter was the only gainer. Defensive healthcare counter held up in green for the session even after India capped the prices of 52 more drugs, including painkillers and antibiotics. The additional drugs join a list of nearly 400 essential medicines that have so far been placed under price control in India.

On the flip side, much of the pressure was witnessed by stocks from Realty, Oil & Gas and Capital Goods counters, which were the worst performers of the session. Shares of upstream oil and gas companies fell as investors fear that falling crude prices will affect production and gross refining margins of these companies. Besides, metal stocks tumbled in trade on weak Chinese data. A slate of Chinese economic data for November released on Friday painted a mixed picture of the state of the world's second biggest economy, with better-than-expected retail sales and weaker-than-expected industrial output. Industrial production rose 7.2% on year in November, below October's 7.7 % rise  However, select shares of IT companies were trading higher after the rupee weakened to a 10-month low against the dollar, which will help the companies boost overseas margins. The overall market breadth on BSE ended in the favour of declines, which thumped advances in the ratio of 1986:927, while 103 shares remained unchanged.

The BSE Sensex plunged 251.33 points or 0.91% and concluded at 27350.68, after trading in a range of 27320.05 and 27692.32.  7 stocks advanced against 23 stocks declining ones on the index. (Provisional)

The broader indices concluded into negative territory; the BSE Mid cap index was down by 1.28%, while Small cap index down by 1.50%. (Provisional)

While, healthcare up by 0.19% was the only gaining sectoral indices on BSE, the top losers indices on the BSE were Oil & Gas down by 2.63%, Realty down by 2.47%, Consumer Durables down by 2.28%, Capital Goods down by 2.00%, PSU down by 1.51%. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 1.30%, Bharti Airtel up by 1.19%, Infosys up by 0.96%, Sun Pharma Inds. up by 0.78% and Coal India up by 0.44%. On the flip side, GAIL India down by 4.63%, Tata Steel down by 3.95%, ONGC down by 3.55%, Sesa Sterlite down by 2.91% and BHEL down by 2.87% were the top losers. (Provisional)

Meanwhile, in a big setback to government aiming to implement GST soon, states rejected the draft of Goods and Services Tax (GST) Bill, underscoring that it does not address their concerns, particularly on entry tax and taxation of petroleum products.

During a meeting, the government’s plan to bring petroleum goods under GST regime was strongly opposed by the Empowered Committee of State Finance Ministers. The states also objected to the Constitutional Amendment Bill saying it does not contain provisions for giving states compensation against any possible loss of revenue after GST roll-out for five years. The state governments want to keep the entry tax and petro tax out of the ambit of the GST. The GST roll out has missed several deadlines because of lack of consensus among Centre and states over certain crucial issues like CST compensation. However, the government is taking steps to build consensus among states and centre for GST rollout. Finance Minister Arun Jaitley had recently announced that the government will soon release Rs 11,000 crore towards Central Sales Tax (CST) compensation and balance amount will start being paid from the next financial year.

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 8224.10, down by 68.80 points or 0.83% after trading in a range of 8216.30 and 8321.90. 17 stocks advanced against 33 stocks declining one’s on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 1.35% and Ambuja Cement up by 1.23% and Maruti Suzuki up by 1.14% and Ultratech Cement up by 1.09% and Sun Pharma Inds. up by 1.02%. On the flip side, GAIL India down by 4.39%, Tata Steel down by 3.83%, Cairn India down by 3.55%, ONGC down by 3.53% and Sesa Sterlite down by 2.73% were the top losers. (Provisional)

European Markets were reeling under pressure; with Germany’s DAX down by 116.18 points or 1.18% to 9,746.35; UK’s FTSE 100 down by 97.67 points or 1.51% to 6,364.03 and  France’s CAC down by 55.62 points or 1.32% to 4,170.24.

The Asian equity benchmarks ended mostly in green on Friday, as optimism was boosted by US data on retail sales, while the Japanese shares gained ahead of the weekend’s election. China’s economy showed further signs of fatigue in November, with factory growth slowing more than expected and investment expansion hovering near a 13-year low, putting pressure on policymakers to unveil stronger stimulus measures. A deluge of weak data this week has reinforced the view that annual economic growth may weaken further from 7.3% in the third quarter - already the lowest since the great financial crisis and further straining the fragile global economy. China’s leaders will keep growth on track next year by applying a prudent monetary stance with a balance between loosening and tightening. China’s economy is adjusting to a new normal of slower growth -- a phrase President Xi Jinping has used several times recently.

Chinese Industrial Production fell to 7.2%, from 7.7% in the preceding month. Chinese Retail Sales rose to an annual rate of 11.7%, from 11.5% in the preceding month. Chinese Fixed Asset Investment fell to a seasonally adjusted 15.8%, from 15.9% in the preceding month. Japan’s industrial production rose to a seasonally adjusted 0.4%, from 0.2% in the preceding month.