Post Session: Quick Review

Markets extended their decline for the second straight session amid weak global environment. In a volatile day of trade benchmarks struggled to come into green after a negative start, there was some serious attempt in last but that could not help to put the markets in green, Traders seemed to have largely overlooked the report of surge in industrial production data announced after the market hours yesterday. Industrial production grew at a nearly three-year high of 6.4 percent in August on account of improvement in manufacturing as well as mining activity and better offtake of capital goods. FICCI too has said the growth in manufacturing seems to be accelerating and the coming months might see a transformation in the same trajectory. There was some concern of rise in inflation, as the Consumer Price Index (CPI) inflation for the month of September rose to 4.41 percent, compared to 3.74 percent in August, mainly due to costlier food items in general and beverages and pulses in particular.

Somberness was visible on global front too and though the US markets ended modestly in green, the Asian markets ended mostly in red. The Chinese market however recovered and ended marginally in green on stimulus hopes after data showed an 11th monthly decline in imports in September spurring concern about growth in the world’s second-largest economy. China’s imports contracted by 17.7 percent in yuan terms in September. Later the European markets too made a soft start led by the drop in commodity stocks after the International Energy Agency said that global oil markets will remain oversupplied next year.

Back home, markets traded in a tight band in the first half as the broader markets held the turf, but there was sudden profit taking that dragged the markets lower in second half with metal and oil stocks edging lower after disappointing trade data from China and sharp fall in international crude prices. A near 18 per cent slump in Chinese imports added to worries about a slowdown in the world's number two economy. With earnings season picking up pace traders reacted to numbers as well and while Indusind Bank surged on reporting good numbers, DCB Bank was down on below expected numbers. The IT sector once again remained in somber mood ahead of the TCS numbers. Infosys, which fell nearly 4 per cent, extended losses declining by over 2 percent again. TCS will announce its earnings after market hours today, it is being expected that India's biggest outsourcer will post a 3.6 per cent sequential growth in dollar revenues. Traders will be eyeing the management commentary for the second half as it is traditionally a weaker period for IT companies. There was mixed reaction in the telecom stocks after, DoT released Spectrum Trading norms. It permitted Spectrum trading in 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands and said that spectrum trading shall only be allowed between two access service providers and bands earmarked for access services by licensor to be called tradable bands. Though, DoT has not permitted spectrum leasing. RCom surged by around 4%, while Idea Cellular lost over 3% and Bharti Airtel too declined by over a percent.

The BSE Sensex ended at 26827.15, down by 76.96 points or 0.29% after trading in a range of 26719.10 and 26918.52. There were 13 stocks ended in green against 17 stocks in red on the index. (Provisional)

The broader indices made a mixed closing; the BSE Mid cap index ended modestly down by 0.02%, while Small cap index gained 0.40%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.18%, Power up by 0.18%, FMCG up by 0.13%, Auto up by 0.05%, Metal up by 0.01%, while IT down by 1.27%, TECK down by 1.07%, Oil & Gas down by 0.61%, Consumer Durables down by 0.42%, Capital Goods down by 0.30% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 2.06%, Bajaj Auto up by 1.63%, BHEL up by 1.34%, Lupin up by 1.26% and ITC up by 0.95%. On the flip side, ONGC down by 3.62%, Hindalco down by 3.10%, Vedanta down by 3.02%, Tata Steel down by 2.45% and Infosys down by 2.18% were the top losers. (Provisional)

Meanwhile, the Centre and states have completed the drafting of model Goods and Services Tax law as well as an integrated-GST or iGST law, which will be put up in public domain by early November. The model GST law and iGST law has been circulated among the states. The Empowered Committee would meet soon to discuss them. The government has already put up three reports of empowered committee on GST on refunds, payment process and registration for public comments by October 31.

The reports to be put up for public comment have recommended that the RBI’s core banking solution e-Kuber be used for consolidating and settlement of accounts under the GST system. It has also suggested that Internet banking, over the counter payment and NEFT and RTGS should be extensively used to facilitate payments under GST.

The drafts of the proposed legislations are based on three principles -- definitional clarity, certainty in assessment and promoting ease of doing business, the official said. The model GST law and iGST law have been drafted by the officials of both Centre and States. The Central GST (CGST) will be framed based on the model GST law, while the states will draft their own State GST (SGST) based on the draft model law with minor variation incorporating state based exemption.

Although the government had planned to roll out the GST, touted as the most comprehensive indirect tax reform since Independence, from April 1, 2016, but it seems difficult as the Constitution Amendment Bill is stuck in the Rajya Sabha where the ruling party does not have a majority. The government, however, is going ahead with the preparatory work necessary for smooth implementation of the GST, which will subsume various levies like excise, service tax, sales tax, octroi, etc, and will ensure a single indirect tax regime for the entire country.

The CNX Nifty ended at 8135.70, down by 7.90 points or 0.10% after trading in a range of 8088.60 and 8150.25. There were 27 stocks on gainers side against 23 stocks on losers side on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 1.85%, Bajaj Auto up by 1.83%, BPCL up by 1.73%, Coal India up by 1.72% and Dr. Reddys Lab up by 1.47%. On the flip side, Idea Cellular down by 3.83%, ONGC down by 3.53%, HCL Tech. down by 2.94%, Vedanta down by 2.93% and Hindalco down by 2.65% were the top losers. (Provisional)

European markets were trading in red, Germany’s DAX declined by 123.34 points or 1.22% to 9,996.49, France’s CAC lost 77.53 points or 1.65% to 4,611.17 and UK’s FTSE 100 lost 53.58 points or 0.84% to 6,317.60.

The Asian equity markets ended mostly in red on Tuesday, after Chinese trade data signaled weakening global and domestic demand, the latest evidence that the world’s second largest economy is stalling. Japanese Finance Minister Taro Aso stated that the economy is clearly in recovery as corporate profits are at a record high and wages are rising. Aso hopes private-sector companies understand the need to invest their large cash reserves by raising capital expenditure or workers’ salaries. Japanese Household Confidence rose to a seasonally adjusted annual rate of 40.6, from 41.7 in the preceding month. China may cut its GDP growth target to 6.5 percent from the present seven percent in its next five-year plan in view of the continued slowdown of the world’s second largest economy. Chinese imports slumped by nearly 18 percent year-on-year in September, in the latest poor figures from the world’s second-largest economy. The country has also been hit by falling demand in some key markets for its manufactured goods, and September exports slipped by 1.1 percent to 1.30 trillion yuan. The trade surplus for the month nearly doubled to 376.2 billion yuan.