Post Session: Quick Review

The October F&O series made a disappointing closing, with markets extending losses for the fourth straight session tracking the weakness in Asian markets after US Fed in a direct reference put in play a rate hike at its next policy meeting in December. Though both the benchmarks gained over 3 percent for the series but the final day was dismal one and the NSE Nifty slipped below the 8100 mark intraday, while the Sensex never managed to sneak above the psychological 27,000 mark after falling below that earlier during the day. Traders failed to drew any comfort from Finance Minister Arun Jaitley’s statement who after India jumped 12 positions to rank 130th in the world on ease of doing business said that the improvement in ranking does not fully reflect the reforms initiated and the position will improve further next year.

The global cues remained mostly weak as the regional markets overlooked the ralliy in US markets overnight after the Federal Reserve bolstered prospects for a December interest-rate increase. Most of the indices in the region ended in red, though the Japanese market was higher despite the yen climbing with Japanese bond yields after a surprise jump in industrial production, dimming speculation over an increase in BOJ stimulus. The European markets made mostly a lower start. Meanwhile, UK house-price growth picked up slightly in October to the fastest in six months.

Back home, local markets that were looking trading in a broad range till noon suddenly slumped in the second half, with high beta blue-chip stocks suffering sharper cuts, dragging the markets considerably lower. Rupee depreciation too weighed on the sentiments, as the Indian rupee depreciated sharply on strong month-end demand for the US currency from importers. Earnings though kept the markets buzzing and there were lots of scrip specific actions based on the performance. Yes Bank rose 2% after the bank reported a 26.5% increase in net profit for the September quarter due to lower provisions and higher net interest income and other income. On the other hand Just Dial slumped over 11% after its quarterly earnings adjusted for other income missed estimates. The broader markets too fell in the last, making a negative closing despite posing some resistance in the early deals. On sectoral front, the major drag was the Banking stocks that extended losses after suffering a selloff yesterday. PSU stocks suffered the major drubbing and most of them ended in red. The PSU oil marketing companies too suffered sharp cuts after the international crude prices surged overnight, though there was some decline in today’s trade in prices after Pemex, the national oil company of Mexico, said it received permission to swap crude oil with the US, possibly ending the US ban on exporting crude. However, the local traders continued reacting to the results season, which has been largely disappointing.

The BSE Sensex ended at 26860.36, down by 179.40 points or 0.66% after trading in a range of 26794.10 and 27099.11. There were 10 stocks in green against 20 stocks in red on the index. (Provisional)

The broader indices too gave up and ended in red; the BSE Mid cap index was down by 0.30%, while Small cap index lost 0.45%. (Provisional)

The lone gaining sectoral index on the BSE was Consumer Durables up by 0.17%, while PSU down by 1.31%, Capital Goods down by 1.16%, Bankex down by 1.12%, Power down by 1.07%, TECK down by 0.91% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Dr. Reddys Lab up by 2.30%, Vedanta up by 1.86%, Tata Motors up by 0.75%, Tata Steel up by 0.75% and Lupin up by 0.59%. On the flip side, BHEL down by 4.49%, Axis Bank down by 3.00%, Coal India down by 2.65%, SBI down by 2.07% and Sun Pharma Inds. down by 2.00% were the top losers. (Provisional)

Meanwhile, a day after India’s ranking in the World Bank’s ease of doing business jumped 12 steps to 130th position, up from 142nd rank last year, Finance Minister Arun Jaitley has said that the improvement in ranking does not fully reflect the reforms initiated and the position will improve further next year. He said that a large number of steps which we have already taken are going to be reflected in the rankings next year. These rankings are only up to June 1 and some of those steps, whose impact is not seen on the ground, as yet have not been factored into this. But I am sure in the years our ranking will certainly improve.

Jaitley said that “I am grateful that the World Bank has recognised that India is now becoming an easier place to do business... I believe that this 12 point movement does not reflect the full pace of reforms that we have done.” He also said he believed that India still has a long way to go and it is 'work in progress' on improving environment for doing business in the country.

The finance minister also pointed that in recent days the government has taken a number of steps to further improve the ranking and is trying to make the Income Tax Act much simpler and in this regard have announced a Committee which will recast some of these provisions. The government has also brought in another ordinance two days ago for establishing a commercial court in each High Court of the country.
 
Earlier DIPP Secretary Amitabh Kant too had said that though we had done a 12 points jump but Prime Minister’s target is that India must become the easiest and the simplest place to do business. This would require a lot of sustained work over a long period of time and we are determined to do this.

The CNX Nifty ended at 8118.70, down by 52.50 points or 0.64% after trading in a range of 8098.00 and 8179.60. There were 15 stocks on gainers side against 35 stocks on decliners side on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 2.32%, Dr. Reddys Lab up by 2.22%, Vedanta up by 2.14%, Ultratech Cement up by 1.28% and Lupin up by 0.87%. On the flip side, BHEL down by 4.43%, BPCL down by 3.40%, Axis Bank down by 3.11%, Coal India down by 2.82% and Sun Pharma Inds. down by 2.39% were the top losers. (Provisional)

European markets were trading in range, UK’s FTSE 100 decreased 60.21 points or 0.94% to 6,377.59, France’s CAC was down by 36.75 points or 0.75% to 4,853.83 and Germany’s DAX was lower by 13.98 points or 0.13% to 10,817.98.

The Asian equity markets ended in red on Thursday, barring Shanghai Composite and Nikkei 225 which closed with marginal gains. Chinese leaders are meeting in Beijing to decide on an economic growth target for the next five years. China’s Premier Li Keqiang stated that China requires annual growth of at least 6.53 percent over the next five years. China’s most recent annual GDP target for 2015 stood at around 7 percent. The economy grew 6.9 percent in the third quarter from a year earlier. The Bank of Japan is expected to hold monetary policy steady on Friday even while diluting its rosy inflation forecasts, clinging to the hope a tightening job market will underpin consumption and help the economy emerge from a soft patch. Some BOJ policymakers have worried that sluggish demand in emerging Asian markets could hurt output and corporate sentiment enough to delay planned capital investment and wage hikes. The BOJ is also expected to maintain its pledge to increase base money, or cash and deposits at the central bank, at an annual pace of 80 trillion yen ($663 billion) through aggressive asset purchases. Japan’s industrial production rose to a seasonally adjusted 1.0%, from -1.2% in the preceding month.