Post Session: Quick Review

Indian markets finally managed to break their six days losing streak, though the trade was pretty volatile and markets after a gap down opening kept swinging between gains and losses for the whole second half, ending with modest gains only. Earlier the bourses made a strong start supported by good global cues and both the benchmarks reclaimed their crucial psychological levels of 26700 (Sensex) and 8100 (Nifty). Traders were encouraged by the good growth in core sector, which constitutes almost 38 percent of the industrial production. India’s core sector output growth rose to a four-month high in September at 3.2% in compared to 2.6% in the same period last year and previous month's 2.6%. There was sharp pick-up in fertiliser production and electricity generation, while steel and cement - contracted. Markets also got a boost with Moody's Investors Services projecting stable growth rate for India and stating that the economy would grow at 7.5 percent in the current fiscal and improve marginally in the following year. It expects India's real GDP to grow at 7.5 percent in the financial year ending March 31, 2016 (FY16) and 7.6 percent in FY17.

The US markets rallied after manufacturing PMI reading for the world's largest economy inched up in October and propelled gains in the Asian markets, traders in the region were also encouraged with inflation in South Korea unexpectedly increasing at the fastest pace in almost a year, helping the government assessment that economy is in turnaround. The European markets too opened with smart gains tracking similar trends seen on Asian markets, however they lacked direction and slipped into red  with the FTSE moving up and down ahead of construction data for October due from the Office for National Statistics later in the day.

Back home, the markets pared the early gains after rallying to their intraday highs supported by gains in metals, banks and power stocks. Selling witnessed in index heavyweights dragged the range bound markets into red.  Banks that were looking strong and powered the markets in early trade with Moody's Investors Service upgrading its outlook for the country's banking system to 'stable' from 'negative', saying an improving economy would help temper problem-loans on banks' books, lost their momentum after a completely different view emerged from other rating agency Fitch Ratings, which said that formation of stress assets of Indian banks' is likely peak this fiscal year. It said that that the share of bad loans to total loans would improve after touching a high of 11.1% in fiscal year march 2015. Some disappointment over earnings once again dragged the markets lower. Oberoi Realty declined after its September quarter earnings came in below the estimates. Rating agency CARE reported 27.78% fall in its net profit at Rs 37.85 crore for the quarter ended September 30, 2015. Also Jaypee Infratech reported a net loss of Rs 159.57 crore for the quarter. Sectorally oil & gas, PSU stocks and IT capped the losses, while consumer durables, capital goods and realty kept dragging the markets till last.

The BSE Sensex ended at 26590.59, up by 31.44 points or 0.12% after trading in a range of 26514.48 and 26732.24. There were 14 stocks on gainers side against 16 stocks on losers side on the index. (Provisional)

The broader indices outperformed the benchmarks; the BSE Mid cap index was up by 0.19%, while Small cap index gained 0.31%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.85%, PSU up by 0.73%, IT up by 0.72%, Power up by 0.68%, TECK up by 0.48%, while Consumer Durables down by 0.76%, Capital Goods down by 0.67%, Realty down by 0.34%, Bankex down by 0.27%, Metal down by 0.21% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 2.26%, ONGC up by 1.74%, Mahindra & Mahindra up by 1.73%, Hindalco up by 1.54% and TCS up by 1.27%. On the flip side, Lupin down by 1.67%, Tata Motors down by 1.43%, Larsen & Toubro down by 1.40%, Bharti Airtel down by 1.34% and Tata Steel down by 1.30% were the top losers. (Provisional)

Meanwhile, in a bid to speed up corporate tax reforms, the finance ministry is preparing a road map to deal with the problem of a large number of tax litigations. Revenue Secretary Hasmukh Adhia has said that tax related litigations; including out of court settlement will be dealt through it. Adhia further said that the Justice RV Easwar panel will look at ways to simplify Income Tax laws though it will not specifically deal with the issues concerning retrospective tax amendment.

Adhia said terms of reference for the Committee for simplification of tax laws are there and they will work accordingly, besides, the tax department is also contemplating increasing the threshold limit for litigation of tax cases to reduce the number of such cases at various levels. On a roadmap to phase out corporate tax exemptions and a gradual reduction of the tax rate to 25 per cent over four years, Adhia said the road map for tax cuts and the rollback could come by the end of the next month.

Recently, in its bid to further simplify the Income Tax laws and ease of doing business, the government has set up a 10-member panel under a former Delhi High Court judge to suggest simplification of over 50-year-old Income Tax Act. The panel will identify clauses that lead to litigations and suggest modifications to bring predictability and certainty in tax laws. The term of the committee is for one year and the first report is expected by January 2016.

The CNX Nifty ended at 8060.70, up by 9.90 points or 0.12% after trading in a range of 8031.75 and 8100.35. There were 24 stocks in green against 25 stocks in red, while one stock remained unchanged on the index. (Provisional)

The top gainers on Nifty were NTPC up by 2.41%, Power Grid Corpn. up by 2.33%, ACC up by 1.91%, Mahindra & Mahindra up by 1.75% and Hindalco up by 1.67%. On the flip side, Asian Paints down by 1.94%, Tata Steel down by 1.57%, Adani Ports &Special down by 1.45%, Larsen & Toubro down by 1.42% and Tata Motors down by 1.40% were the top losers. (Provisional)

European markets paring their early gains were trading in red, Germany’s DAX declined by 30.8 points or 0.28% to 10,919.87, UK’s FTSE 100 lost 3.46 points or 0.05% to 6,358.34 and France’s CAC was tad lower  by 0.85 points or 0.02% to 4,915.36.

The Asian equity markets ended mostly in green on Tuesday, taking cues from buoyant US markets and recent data that indicated the global economy may have turned a corner, though wary central banks signalled a recovery may be anything but durable. Japan’s stock exchange was closed on account of ‘Culture Day’ holiday.  China’s private and export-oriented companies saw manufacturing activity shrink again in October although the decline was not as bad as that in the month before, suggesting the economy was stabilizing. The Caixin China Purchasing Managers’ Index landed at 48.3 last month, up from 47.2 in September, to reach a four-month high. South Korea’s annual inflation accelerated to an 11-month high in October, raising the hurdle to further monetary easing as the central bank showed it was wary about taking borrowing costs even lower amid rising household debt and external risks. The consumer price index rose 0.9 percent in October from a year earlier, driven by rising prices in the services sector and marked the fastest rise since November last year. Annual core inflation rose 2.3 percent in October to the highest since February this year. The Bank of Korea promised to keep monetary policy easy, but stopped short of signaling additional rate cuts as it remained wary of rising household debt.