Post Session: Quick Review

Indian markets showed a smart turnaround on Monday, bucking the trend in most of the regional counterparts. The market mood which looked somber from the very beginning in the wake of deadly attacks in Paris during the weekend, witnessed smart recovery. The bourses stabilized in the late morning session and started moving higher, aided by buying in some bluechips and taking support with finance minister Arun Jaitley’s statement that India's economy has grown faster than any other despite global economic turbulence, below par monsoons and private sector stress. He said that India's economic growth was expected to exceed 7.3 per cent in the current fiscal year and go higher still in the next one. Jaitley said the global economy is facing a challenging time, but what is gloom for some is in some sense a boom for India. Traders were also encouraged with IMF stating that it is optimistic about India's prospects and view the economy being on an increasingly stable footing.

The global cues remained mostly weak, as investors responded to Europe’s worst terror attack in a decade by shifting out of riskier assets. Traders also grew concerned about the weak economic conditions with the Japan’s economy contracting in the third quarter. The nation fell into its second recession since Prime Minister Shinzo Abe took office in December 2012. Gross domestic product of Japan declined an annualized 0.8 percent in the three months ended Sept. 30, following a revised 0.7 drop in the second quarter, meeting the common definition of a recession. The European markets too made a weak start, as the euro fell on concern that geopolitical tensions will hurt trade and consumer confidence, with travel and leisure stocks dragging down the markets, though there were signs of recovery.

Back home, the markets surged to their intraday high in the second half, as strong buying in banking stocks lifted the benchmarks higher. Traders also factored in inflation data announced during the day, which came mostly in line to the expectation and remained in negative territory for the 12th month in a row. Wholesale Price Index (WPI) inflation for the month of October was reported at (-)3.81% vs (-)4.54% in September. Earlier, the country’s retail inflation was pushed to a four-month high in October on rising prices for some food products and firm demand during the festival season. Buying in FMCG, consumer durables, capital goods, healthcare and realty stocks too helped recovery in the markets. However, the IT stocks remained in somber mood despite paring some losses, as the rupee strengthened, erasing all the morning losses, past the 66 per US dollar mark. In non sectoral gauges, fertilizer companies showed some upmove after the Fertilizer Ministry sought more than Rs 25,000 crore from the Finance Ministry for making subsidy payments to domestic urea manufacturers, as there has been shortage of funds for making subsidy payments. Chambal Fertilisers, Coromandel Fertilizers, RCF, GSFC all rose in a range of 0.5-1.5% for the day.

The BSE Sensex ended at 25777.67, up by 167.14 points or 0.65% after trading in a range of 25451.42 and 25866.42. There were 22 stocks in green against 8 stocks in red on the index. (Provisional)

The broader indices too made a green close; the BSE Mid cap index ended higher by 0.22%, while Small cap index gained 0.49%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 1.46%, Capital Goods up by 1.09%, PSU up by 0.50%, FMCG up by 0.49%, Oil & Gas up by 0.48%, while IT down by 0.81%, TECK down by 0.73%, Realty down by 0.10%, Consumer Durables down by 0.06% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 4.38%, Tata Steel up by 3.78%, Dr. Reddys Lab up by 3.71%, Vedanta up by 3.38% and SBI up by 3.35%. On the flip side, Coal India down by 2.19%, Hindustan Unilever down by 1.94%, Infosys down by 1.56%, TCS down by 1.01% and Tata Motors down by 0.71% were the top losers. (Provisional)

Meanwhile, highlighting their optimism about India’s growth story, International Monetary Fund (IMF) has said that “We are optimistic about India's prospects and view the economy being on an increasingly stable footing.” Though it has also stressed that India needs to further progress on the long standing supply bottlenecks for achieving faster and more inclusive growth,

IMF has often said that India is among the few bright spots in an otherwise gloomier world economy. In its latest report published ahead of the G20 Summit, the Washington-based multilateral institution said India's growth will benefit from recent policy reforms, a consequent pickup in investment, and lower commodity prices.

Deputy Director of IMF's Asia and Pacific Department, Kalpana Kochhar has said that there are many aspects where the India is growing such as Inflation has declined, the current account deficit is in check, international reserves are ample and economic growth is picking up. But stated that further progress is needed to relax long-standing supply bottlenecks (especially in the energy, mining and power sectors) and achieve faster and more inclusive growth. While pointing out the various positive developments, Kochhar said a number of important economic and structural reforms have also been initiated including diesel price deregulation, steps to create more flexible labour markets (particularly at the state level), coal sector reforms, adoption of the flexible inflation targeting framework by the RBI, increasing infrastructure spending, and enhancing financial inclusion.

Recently IMF had said that India remains one of the fastest growing economies in the world, though it marginally lowered India’s growth rate to 7.3 percent this year from the previous estimation of 7.5 percent in the July 2015 World Economic Outlook (WEO) Update, stating the reason of external environment and stated that the external demand has weakened hence Indian exports tends to suffer, which is the negative force pushing down the growth forecast for India.

The CNX Nifty ended at 7808.65, up by 46.40 points or 0.60% after trading in a range of 7714.15 and 7838.85. There were 33 stocks on gainers side against 17 stocks on losers side on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 4.08%, Vedanta up by 3.78%, Tata Steel up by 3.77%, SBI up by 3.56% and Dr. Reddys Lab up by 3.55%. On the flip side, Coal India down by 2.24%, Hindustan Unilever down by 1.91%, Infosys down by 1.89%, Tata Power down by 1.39% and Hero MotoCorp down by 1.35% were the top losers. (Provisional)

European markets were showing some recovery and were trading mixed, Germany’s DAX gained 6.19 points or 0.06% to 10,714.59, UK’s FTSE 100 was up by 16.68 points or 0.27% to 6,134.96, while France’s CAC declined by 2.9 points or 0.06% to 4,805.05.

The Asian markets closed mostly lower on Monday, as weak growth numbers released by Japan kept investors at bay.  Japan’s economy slid back into recession in July-September as uncertainty over the overseas outlook hurt business investment, keeping policymakers under pressure to deploy new stimulus measures to support a fragile recovery. A rebound in private consumption and exports offered some hope, the world’s third-largest economy is emerging from the doldrums, despite slowing Chinese demand and the pain households are feeling from rising imported food prices. The world’s third-largest economy shrank an annualized 0.8 percent in July-September.

Chinese President Xi Jinping stated that the country’s economy is predicted to grow by about 7 percent this year, which will continue to contribute as high as about a third to the global growth. Xi Jinping added that China shouldered the responsibility of driving economic growth in times of the world economic hardship. Despite a recent slowdown, China still contributes 30 percent to world economic growth, which means that China still acts as a major world economic powerhouse. Indonesian Trade Balance fell to a seasonally adjusted 1.01B, from 1.02B in the preceding month. Thailand GDP rose to a seasonally adjusted 2.9%, from 2.8% in the preceding month.