Post Session: Quick Review

Indian equity markets extended their gaining streak to the sixth day on Wednesday, marking their highest level in nearly one and half months and Sensex scaling the crucial psychological level of 27000, supported by surge in oil explorers tracking a rebound in crude oil prices. Markets also tracked higher Asian stocks which hit a seven-week high on Wednesday, on bounce in battered resource shares and emerging economy currencies. Traders seem to have taken support with IMF’s latest report, which while cutting its global growth forecast said that Indian economy is expected to grow faster than other major emerging economies. The IMF has marginally lowered its 2015-16 growth forecast for India to 7.3% this year, lower than the 7.5% it projected in July. But it expects growth to accelerate to 7.5% the following year. It also added that India will remain the world’s fastest growing major economy.

On the global front, while the US markets made a mixed closing, the Asian markets ended mostly in green led by the Hong Kong market which gained over 3 percent for the day, building on their biggest five-day advance in almost four years. The Japanese market that was once looking faltering, too ended in green despite the yen rising broadly after the Bank of Japan kept monetary policy unchanged. The European markets too made a positive start after Glencore shares rose for a fourth day in London and ahead of UK’s Industrial and manufacturing production figures.The indices in the region overlooked the IMF’s cut in its global growth forecast for 2015 and 2016.

Back home, in a choppy day of trade markets once lost their momentum completely in the second half to dip into red, though recovered instantly but the trade remained volatile till last, despite that markets extended their gains and ended near the highs of the day. The major boost to the markets came from the upstream oil companies after international crude oil prices surged to near a three-month high after a new US forecast showed tighter oil supplies next year. Cairn India was up by around 4%, ONGC surged by over 5%, Oil India gained over 3% and Aban Offshore ended up by around 5%. Reliance Industries too gained over 2%. The sugar sector continued their jubilation on global forecasts of shortage during the next crushing season. The International Sugar Organisation has forecast a deficit of 2.5 million tonnes, while the US Department of Agriculture estimated the shortage to be 3.8 million tonnes. On the domestic front the festive prospects were aiding the sentiments. Auto stocks too gained on hopes the upcoming festive season would boost sales. However, power sector lenders extended their decline for a second consecutive session on profit-taking after surging higher on hopes the government would soon announce power distributors' restructuring.

The BSE Sensex ended at 27066.83, up by 133.95 points or 0.50% after trading in a range of 26877.51 and 27082.28. There were 21 stocks on gainers side against 9 stocks on losers’ side on the index. (Provisional)

The broader indices too ended in green; the BSE Mid cap index was up by 0.10%, while Small cap index gained 0.41%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.68%, Realty up by 1.81%, Oil & Gas up by 1.63%, Auto up by 1.60%, Power up by 1.28%, while IT down by 1.36%, TECK down by 1.15%, Consumer Durables down by 0.10% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindalco up by 8.97%, Vedanta up by 5.78%, ONGC up by 5.08%, Tata Steel up by 3.90% and Bajaj Auto up by 3.63%. On the flip side, Wipro down by 2.04%, Axis Bank down by 1.65%, Bharti Airtel down by 1.56%, TCS down by 1.51% and Infosys down by 1.36% were the top losers. (Provisional)

Meanwhile, a top US industry advocacy, US India Business Council (USIBC) has argued that for India to reach its ambiguous economic growth targets, it needs to be integrated into global trade pacts, especially those that drive commerce in the dynamic Asia Pacific region. Mukesh Aghi, president of USIBC after the deal on TPP was announced by the US and 11 other countries, said that India's exploration of APEC membership, which is currently an informal precursor to TPP membership can unlock India's potential as a global manufacturing hub and deepen its ties with the global economy.

Recently, the US and 11 other nations reached a landmark deal on the Trans-Pacific Partnership which aims to become the world's largest free-trade zone linking 40 per cent of the global economy. The 12 countries Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam constitute 40 per cent of the global economy.

Aghi further added that the recent study by the Peterson Institute for International Economics, demonstrates that if India joins TPP agreement that included all of the APEC countries and were to complete its domestic reforms, it could potentially expand more than $500 billion exports per year. On the other hand, if it were to stand outside the negotiations, while other countries entered a regional trade agreement, export losses of $50 billion per year, as trade is diverted away from India.

Earlier, the former Australian Prime Minister, Kevin Rudd and USIBC's outgoing Chairman Ajay Banga had said that APEC membership would help prepare India to participate in the emerging mega regional trade arrangements, such as the Trans-Pacific Partnership (TPP) and the Free Trade Area of the Asia-Pacific (FTAAP) that will define the future of global trade. Meanwhile, Commerce Minister Nirmala Sitharaman contesting India's exclusion from TPP had said that India is not being left out from TPP. The country is currently engaged in ARSEP (Asean Regional Comprehensive Economic Partnership) which consists of Association of Southeast Asian Nations (ASEAN) and ASEAN FTA countries and is actually moving faster along with other members.

The CNX Nifty ended at 8180.90, up by 28.00 points or 0.34% after trading in a range of 8132.90 and 8186.85. There were 34 stocks in green against 16 stocks in red on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 8.53%, Vedanta up by 5.78%, Cairn India up by 5.76%, ONGC up by 4.51% and Tata Steel up by 4.04%. On the flip side, HCL Tech. down by 4.11%, Axis Bank down by 2.15%, Bharti Airtel down by 1.75%, Infosys down by 1.74% and Wipro down by 1.66% were the top losers. (Provisional)

European markets were trading in green, France’s CAC gained 35.67 points or 0.77% to 4,696.31, UK’s FTSE 100 was up by 36.05 points or 0.57% to 6,362.21 and Germany’s DAX surged by 112.2 points or 1.13% to 10,015.03.

The Asian equity markets ended in green on Wednesday, as investors shrug off cut in growth outlook by IMF. China Stock exchange was closed on account of ‘National Day’ holiday. The Bank of Japan held off on expanding stimulus, even as slumping exports and falling oil prices threaten its rosy projection that the economy is on track to hit the bank’s ambitious 2 percent inflation target next year. But lingering fears of recession will keep the central bank under pressure to ease at a more crucial meeting on October 30, when it is expected to cut its long-term economic and price forecasts. BOJ Governor Haruhiko Kuroda remained bullish that the bank’s massive money-printing will eventually lift the world’s third-biggest economy decisively out of nearly two decades of deflation. The BOJ maintained its optimistic view that while exports and output has been hurt by slowing emerging market growth, Japan’s economy continues to recover moderately. Singapore’s central bank would announce its semi-annual monetary policy decision on October 14. The Monetary Authority of Singapore (MAS) will probably ease monetary policy due to the rising risk of a recession and downside risks to the inflation outlook.

China’s foreign exchange reserves shrank by $43.3 billion in September as the central bank stepped up intervention to stabilize the yuan and calm sentiment after a surprise devaluation of its currency had jolted global markets. China’s reserves, the world’s largest, dropped to $3.514 trillion last month, after a record slide of $93.9 billion in August. The devaluation of the yuan on August 11, and the consequent fall in reserves have raised questions about how sustainable China’s efforts to support the yuan are, as capital trickles out of the country due to fears of a deepening economic slowdown and prospects of rising US interest rates.