Post Session: Quick Review

Indian stock markets showed a volatile trade on Tuesday swinging between gains and losses and finally snapping the three sessions gaining streak. After a cautious start the markets came in red for a couple of time and reached to their peak in the early second half, though sudden slump was seen afterwords with traders booking profit, dragging the benchmarks deep in red, however subsequent recovery led the markets recover their major losses, still making a negative close for the day. Earlier, the markets made a cautious start after global rating agency Standard & Poor's kept India's sovereign rating at the lowest investment grade of 'BBB-minus' and a 'stable' outlook, saying factors such as its sound external position were offset by low income and weak public finances. The agency added it does not expect to change its rating this year or in 2016 based on its current set of forecasts. S&P said any rating improvement would require reforms that 'markedly improve' the government's fiscal position and bring net general government debt below 60 percent of GDP. Also, traders were eyeing the Finance Ministry two-day interactive meetings on October 20-21 with foreign portfolio investors (FPIs) and domestic market participants, aimed at ensuring ease of doing business in the financial market.

On the global front after the US markets ended with slight gains, the Asian markets followed the trend and snapped the session mostly in green, led by the Chinese market, while the Japanese market too posted good gains on weaker yen. The European markets also made a positive start near a two-month high, as some upbeat earnings tempered losses in commodity shares. Though, weak data from China and Europe reignited concerns that the slowdown in the world’s second-biggest economy is spreading and dragged the major indices in red

Back home, traders seemed to have overlooked the monthly SBI Composite Index report that stated that country’s manufacturing sector growth improved in October largely driven by the manufacturing sector, but mining and electricity are still acting as a drag on the economic activity. Markets recovering from the day’s low witnessed good cover-up but could not enter the green by the end, as the metals kept reeling in red, the major upheavals were seen in the second half when markets slumped from their day’s high on account of sharp selling in metal and energy stocks. However, IT stocks saw buying interest, and supported the broader markets  after Europe's biggest software company SAP said it could top full-year financial targets in the fourth quarter, its most important period of the year, as it confirmed the strong third-quarter results it pre-announced last week. The broader indices however outperformed the benchmarks and ended in green. Among the sectoral indices on BSE, the Power index was the top gainer, followed by IT , Tech, Consumer Durables and auto, on the other hand the BSE Metal index was the top loser, followed by Oil & Gas, realty and PSU. Power stocks moved higher after Moody's Investor Services said in a report that decline in power producers' consumption of costly imported coal is a credit positive for them. RPower was up by over 4%, Adani Power surged by over 8% and Torrent Power gained near to 9%.

The BSE Sensex ended at 27289.99, down by 74.93 points or 0.27% after trading in a range of 27216.40 and 27432.07. There were 9 stocks on gainers side against 21 stocks on losers side on the index. (Provisional)

The broader indices outperformed; the BSE Mid cap index was up by 0.57%, while Small cap index ended higher by 0.19%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 1.23%, IT up by 1.03%, TECK up by 0.79%, Consumer Durables up by 0.57%, Auto up by 0.16%, while Metal down by 1.88%, Oil & Gas down by 0.79%, Realty down by 0.61%, PSU down by 0.34%, FMCG down by 0.24% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 1.34%, Infosys up by 1.33%, Maruti Suzuki up by 1.11%, Tata Motors up by 1.06% and NTPC up by 0.31%. On the flip side, Vedanta down by 6.52%, Tata Steel down by 3.08%, Mahindra & Mahindra down by 2.38%, Hindalco down by 2.37% and ONGC down by 2.13% were the top losers. (Provisional)

Meanwhile, ratings Agency, CARE Ratings in its report “Revised Prognosis for Indian Economy” has downgraded India's GDP forecast to 7.5-7.6% for the financial year 2015-16 from its earlier estimate of 7.8-8%. The cut in forecast takes into account global developments like China’s slowdown, Chinese Yuan devaluation, Fed impending rate hike, 16 percent deficient monsoon and low capital utilization.

The report stated that the global growth has lowered down and the initial anticipated growth is unlikely to materialize. In particular, China has slowed down and the prospects do not look too encouraging. China had devalued the Yuan which had an impact on various currencies, viz. the emerging and developing economy currencies, which also declined in harmony. 

Besides, the report also factors in downbeat agriculture production which is pegged around a low of 0.5-1% this year assuming a normal Rabi crop that may compensate for the slippage in kharif crop output. The first advance estimates for kharif crop indicate a shortfall in case of food grains and cotton besides sugarcane. Industry has shown signs of pickup with industrial production up by 4.1% in the first five months though a clearer picture will emerge in the second half. However, the report states that it is the government's disinvestment target that could pose to be major risk for its fiscal position. The government has a target of Rs 69,500 crore and till August it has achieved Rs 13,000 crore .

Care Ratings further states that even as ratings agencies continue to cut India's GDP forecast, the government is following the fiscal consolidation road map and maintain that India will grow in excess of 7.5% in FY16 on the back of positive macroeconomic indicators such as declining inflation, Indirect tax revenues which are showing a positive trend and CAD which is under control.

The CNX Nifty ended at 8253.60, down by 21.45 points or 0.26% after trading in a range of 8229.20 and 8294.05. There were 17 stocks in green against 33 stocks in red on the index. (Provisional)

The top gainers on Nifty were Bosch up by 2.12%, Tata Power up by 2.09%, Power Grid Corpn. up by 1.61%, TCS up by 1.38% and Infosys up by 1.26%. On the flip side, Vedanta down by 6.43%, Cairn India down by 4.01%, Tata Steel down by 3.28%, Hindalco down by 2.65% and Adani Ports &Special down by 2.46% were the top losers. (Provisional)

European markets, Germany’s DAX declined by 60.64 points or 0.6% to 10,103.67, France’s CAC lost 40.99 points or 0.87% to 4,663.08 and UK’s FTSE 100 was lower by 27.69 points or 0.44% to 6,324.64.

The Asian equity markets ended mostly in green on Tuesday, with Japanese market closing higher, as a weaker yen lifted exporters’ stocks. The Bank of Japan maintained its upbeat assessment for all nine of the country’s regional economies and stressed that the pain from China’s slowdown was limited for now, suggesting that it saw no immediate need to expand monetary stimulus further. But four regions, including western and central areas home to big Japanese auto and electronics goods exporters, offered a gloomier view on output than three months ago, underscoring the fragile nature of Japan’s recovery. The slowdown in China, which suffered the weakest growth since 2009 in the July-September period, has yet to hit exporters in western Japan that much, pointing to a pickup in shipments of smart-phone parts and car batteries.  In a quarterly report issued, the BOJ maintained its view that Japan’s regional economies were recovering, with strength in capital expenditure and consumption offsetting weakness in external demand. Indonesia’s inflation rate is forecast to decelerate this month on the back of a declining trend in staple food prices. Up to the second week of October, Bank Indonesia’s survey has reported deflation. This is one of the supporting factors that Indonesia’s annual inflation rate will range around 4 percent or even better than 4 percent by the end of the year. Juda Agung, executive director of economic and monetary policy at Bank Indonesia, separately estimated a 0.09 percent deflation for October compared to the month before, due to lower staple food prices, namely for poultry and red onions. Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.3% compared to the preceding month.