Post Session: Quick Review

Indian markets despite coming off the day’s high posted good gains on Friday. The sentiments were lifted by a global rally after European Central Bank said that it is studying new stimulus measures that could be unveiled as soon as December. The demand for riskier assets soared on the prospect of more stimulus from the European Central Bank and the benchmarks after a gap-up opening traded firm throughout the day. There were lots of good earnings that too supported the market, while traders took additional support with Moody's Investors Service’s report stating that India will clock the highest growth rate of 7-7.5 per cent among G20 economies in 2015 and 2016. It has said that India is less exposed to global risks because of its more resilient economic growth and the impact of positive policy reforms momentum.

Most of the Asian market posted their longest stretch of weekly gains in six months, following the rally in the US markets overnight after Mario Draghi, president of the European Central Bank, signaled the ECB will consider bolstering its bond-buying program before the end of 2015. South Korean shares climbed and the won halted a three-day drop after the nation’s economy rebounded in the third quarter. The European markets too made a strong start, supported by ECB President’s comments and as French economic output picked up in October to the fastest in four months. However, in the euro area, a composite manufacturing and services index probably slipped to 53.4 in October from 53.6 in September.

Back home, BSE Sensex and Nifty both ended with good gains though they were slightly off their day's highs and Nifty lost its 8300 bastion, but the gains for the day helped the markets snap the week on a positive note. While the higher opening of the European market boosted the morale, support also came with a report that private investment in the July-September period was about Rs 2,25,000 crore, 54% more from a year earlier and the highest in any quarter since 2011. But it was mainly the earnings that kept the markets buzzing for the day with traders rewarding all the good performers. VIP Industries was locked in upper circuit for the day after reporting four-fold jump in net profit at Rs 15.7 crore for the quarter ended September 30. Cadila Healthcare too hit its highest level in a year after the pharmaceutical company reported 41 per cent annual jump in its net profit at Rs 391 crore compared to Rs 278 crore in the year-ago period. On the same time Idea Cellular fell over 7 per cent after the telecom operator reported weak earnings in the September quarter. The day was not good for the broader markets too and both the midcap and small cap indices on the BSE ended in red. On the sectoral front, the gains were led by banking, oil & gas and FMCG stocks. Metal and oil & gas stocks too were among the outperformers with gain in global crude prices. On the same time shares of IT companies struggled today after Wipro gave a muted guidance for the third quarter. Wipro expects revenues from the IT services business to be in the range of $1,841 million to $1,878 million, a growth of 0.5 per cent to 2.5 per cent from the September quarter.

The BSE Sensex ended at 27477.92, up by 190.26 points or 0.70% after trading in a range of 27421.71 and 27555.06. There were 20 stocks green against 10 stocks in red on the index. (Provisional)

The broader indices though underperformed and ended in red; the BSE Mid cap index was down by 0.25%, while Small cap index lost 0.43%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 1.40%, FMCG up by 1.07%, Oil & Gas up by 0.73%, PSU up by 0.57%, Metal up by 0.40%, while Capital Goods down by 1.59%, Auto down by 0.79%, TECK down by 0.44% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 3.04%, ITC up by 2.87%, GAIL India up by 2.11%, HDFC up by 2.00% and NTPC up by 1.81%. On the flip side, Bharti Airtel down by 3.76%, Vedanta down by 2.62%, Larsen & Toubro down by 2.60%, Maruti Suzuki down by 2.08% and Wipro down by 1.68% were the top losers. (Provisional)

Meanwhile, Moody's Investor Service’s latest report is likely to give some cheers to the government and other policy makers, as the international ratings agency has said that India is less exposed to global risks because of resilient economic growth and impact of positive policy reform momentum.

In its report ‘Baa-rated Sovereigns: Diverging Resilience to Developing Global Risks’, which focuses on five Baa-rated sovereigns-Turkey, Brazil, South Africa, India and Indonesia, it considers India less exposed to external shocks than the other sovereigns discussed. It further stated that the positive outlook on its Baa3 rating reflects our view that the relatively resilient growth and the policy reform momentum will slowly stabilize inflation, improve the regulatory environment, increase infrastructure investment and lower government debt ratios.

Making a special mention of India’s significant monetary tightening in 2013, coupled with some fiscal consolidation, which is “an example of effective macroeconomic management that restored macroeconomic stability, albeit at the expense of near-term growth” Moody’s said although India, South Africa and Brazil have weaker fiscal positions than Turkey and Indonesia, these governments are less reliant on foreign currency and non-resident funding (government external debt).

The rating agency also said that emerging market sovereigns have diverging shock-absorption capabilities to withstand the risks that will continue to impact global credit quality in 2015-16. Moody’s believes the main external risk facing emerging markets is the potential for a prolonged risk aversion, prompted by hopes of normalization of US monetary policy and possibility of a sharper-than-expected China slowdown.

The CNX Nifty ended at 8296.85, up by 45.15 points or 0.55% after trading in a range of 8280.75 and 8328.10. There were 33 stocks on gainers side against 17 stocks on decliners side on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 2.98%, ITC up by 2.81%, Cairn India up by 2.43%, HDFC up by 2.06% and GAIL India up by 2.05%. On the flip side, Idea Cellular down by 7.57%, Bharti Airtel down by 3.80%, Vedanta down by 2.47%, Larsen & Toubro down by 2.35% and Maruti Suzuki down by 2.03% were the top losers. (Provisional)

European markets were trading in green, UK’s FTSE 100 was up by 55.79 points or 0.87% to 6,432.07, France’s CAC gained 81.2 points or 1.69% to 4,883.38 and Germany’s DAX was up by 177.6 points or 1.69% to 10,669.57.

The Asian equity markets ended in green on Friday, tracking the positive cues overnight from Wall Street and European markets after ECB hinted at further economic stimulus measures in December. Japan’s core inflation probably slipped for a second month in September, while factory output fell for a third month in a row, adding to headaches facing Bank of Japan policymakers as they head into a key policy meeting. Private spending data also due next week is expected to show modest improvement, helped by holiday spending, but the rate of recovery likely remained moderate due to slow growth in wages. The economic data next week will be among the last clues for investors and the BOJ on how the economy performed in July-September after it contracted in the second quarter. Average new home prices in China rose for the fifth month in a row in September, increasing 0.3 percent from August. Compared with a year earlier, home prices in September fell 0.9 percent, slowing from a 2.3 percent drop in August. New home prices in Beijing in September rose 4.7 percent from a year earlier, while those in Shanghai increased 8.3 percent. China’s property market accounts for around 15 percent of the economy, so even modest signs of improvement would relieve some pressure on the cooling economy. Japan’s index of leading economic indicators rose to a seasonally adjusted 103.5. South Korean GDP rose to a seasonally adjusted 1.2%, from 0.3% in the preceding month. Taiwanese Industrial Production rose to a seasonally adjusted annual rate of -4.56%, from -5.46% in the preceding month.