Post Session: Quick Review

Indian markets went through another tumultuous day of trade on Wednesday, with the major benchmarks after a good gap-up opening losing their entire gains and ending modestly in red. Although the markets remained in positive terrain for most part of the day but the final hour witnessed sharp sell-off in the bluechip market heavy weights that dragged the markets lower along with the banking stocks. Earlier, the markets got a good start tailing the rally in the Asian peers and got a boost with India's services sector activity touching an eight-month high in October driven by a significant rise in new business orders. The Nikkei Business Activity index climbed to 53.2 in October, from 51.3 in September. The seasonally adjusted Nikkei India Composite PMI Output index, which maps both manufacturing and services sectors, rose to 52.6 in October from 51.5 in September helped by new businesses. India Inc kept buzzing with Finance Minister Arun Jaitley stating that the government, in the next few days, will list out the exemptions to be phased out as part of its plans to gradually bring down corporate tax rate to 25%, the first tranche of which will be announced in the Budget in February.

On the global front, after the second straight session of rise in US markets, the Asian markets posted solid gains, with the Chinese markets rallying over 4 percent after China’s central bank published five-month-old comments from Governor Zhou Xiaochuan that said a link between exchanges in Shenzhen and Hong Kong would start in 2015, though the bank later clarified that comments were old. Also, the China's Caixin services PMI rose to a three-month high. European markets too rose after the European Central Bank President Mario Draghi reiterated that officials will reassess policy in December.

Back home, the Sensex and Nifty started showing fatigue in the latter half of the trade after rallying at opening and while closing they completely lost the momentum. They were unable to get any solace with Finance minister expressing confidence that he would be able to pass a new goods-and-services tax (GST), saying opposition to the reform would crumble when it comes to a parliamentary vote. Profit-taking at higher levels continued amid caution over the outcome of Bihar election and some disappointment over Q2 corporate earnings. Some selling pressure emerged in IT stocks, as the rupee traded higher against the dollar with banks indulging in dollar buying. The broader markets mirrored the movements seen on the benchmark indices and paring most of their gains ended mixed. On sectoral front auto, PSU and FMCG capped the losses, while the banking, IT and tech dragged the markets lower. Power stocks ended in red despite report that power distribution companies (discoms) could soon be getting a lifeline as the Cabinet will take up a proposal to restructure their debt this Thursday, adding that the headroom under the Fiscal Responsibility and Budget Management (FRBM) scheme will be put to use and old loans will be converted into bonds.

The BSE Sensex ended at 26533.54, down by 57.05 points or 0.21% after trading in a range of 26528.80 and 26800.06. There were 11 stocks on gainers side against 19 stocks on the decliners’ side on the index. (Provisional)

The broader indices made a mixed closing; the BSE Mid cap index was up by 0.09%, while Small cap index lost 0.37%. (Provisional)

The gaining sectoral indices on the BSE were Auto up by 1.68%, PSU up by 0.46%, FMCG up by 0.37%, Metal up by 0.34%, while Bankex down by 0.67%, IT down by 0.60%, TECK down by 0.49%, Capital Goods down by 0.48%, Power down by 0.43% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 6.35%, Mahindra & Mahindra up by 1.56%, Bajaj Auto up by 1.26%, Hero MotoCorp up by 1.24% and Coal India up by 1.21%. On the flip side, ICICI Bank down by 2.24%, Sun Pharma Inds. down by 2.06%, Reliance Industries down by 1.76%, GAIL India down by 1.61% and Lupin down by 1.11% were the top losers. (Provisional)

Meanwhile, with an aim to provide an alternative for buying physical gold, the Reserve Bank of India (RBI) has fixed the public issue price at Rs 2,684 per gram for the sovereign gold bonds. This is the first tranche of the gold bond scheme and subsequent tranches would be notified later. The applications for the bonds will be accepted from November 5 to November 20, 2015.

RBI has notified that the rates have been fixed on the basis of simple average of closing price for gold of 999 purity of the previous week (October 26-30, 2015) published by the India Bullion and Jewellers Association (IBJA). These bonds which will be sold through banks and designated post offices would be issued on November 26. These will be issued by the RBI on behalf of the Government of India. Therefore, these bonds will have a sovereign guarantee.

Indian residents including individuals, HUFs, trusts, universities and charitable institutions can buy the bonds. The Gold Bond scheme will offer investors an interest rate of 2.75 per cent and a choice to buy bonds worth 2 grams of gold, up to a maximum of 500 grams and tenor of the bond will be for a period of eight years with exit option from 5th year to be exercised on the interest payment dates.

The interest earned on gold bonds would be taxable, and capital gains tax shall be levied as in case of physical gold. The redemption of gold bonds will be done by banks, NBFCs and other authorized entities. Earlier, the Budget 2015-16 had proposed to launch a Sovereign Gold Bond (SGB) scheme to develop a financial asset as an alternative to gold.

The CNX Nifty ended at 8030.35, down by 30.35 points or 0.38% after trading in a range of 8027.30 and 8116.10. There were 16 stocks in green against 34 stocks in red on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 6.40%, Mahindra & Mahindra up by 1.46%, Hero MotoCorp up by 1.37%, SBI up by 1.23% and Coal India up by 1.23%. On the flip side, Tech Mahindra down by 2.49%, ICICI Bank down by 2.16%, Reliance Industries down by 2.04%, Sun Pharma Inds. down by 2.02% and GAIL India down by 1.87% were the top losers. (Provisional)

The European markets were trading in green, Germany’s DAX were up by 12.06 points or 0.11% to 10,963.21, France’s CAC was higher by 50.13 points or 1.02% to 4,986.31 and UK’s FTSE 100 increased by 54.67 points or 0.86% to 6,438.28.

The Asian equity markets ended in green on Wednesday, boosted by speculation that Chinese authorities will open a trading link between Shenzen and Hong Kong by year-end. China’s President Xi Jinping stated that growth of only 6.5 percent a year in 2016-2020 will be enough for China to meet its wealth goals. The report came as the ruling Communist party issued guidelines for the next five-year plan for the world’s second-largest economy, whose slowing growth has alarmed investors worldwide. The comments are the clearest indication yet that Beijing will reduce its target growth rate from the current around seven percent, after expansion slowed last quarter to its lowest in six years. Hong Kong retail sales fell for a seventh straight month in September as a drop in Chinese tourists and weak consumer sentiment amid a volatile stock market hurt retailers. Retail sales dropped 6.4 percent from a year earlier, the biggest percentage decline since January this year, to HK$35.2 billion ($4.54 billion). That followed a revised 5.3 percent fall in August. In volume terms, September sales slipped 3.1 percent. South Korean CPI rose to a seasonally adjusted annual rate of 0.9% in October, from 0.6% in the preceding month.