Post Session: Quick Review

Indian markets despite a very volatile session managed to extend their gaining streak for the second day. Traders considering the markets to be in oversold territory after the recent correction, continued accumulating the fundamentally strong stocks at lower valuations. Marketmen were encouraged with Finance Minister Arun Jaitley's statement that the government would make all efforts to persuade the opposition for the passage of Constitution amendment bill for implementation of GST in the winter session. The Goods and Services Tax (GST), which will subsume more than a dozen state levies to create a single market, is to be implemented from April 1, 2016. Though, there was some cautiousness too, as India’s merchandise exports dipped for the 11th month in a row and stood at $21.35 billion, down by 17.33 percent, due to weak global demands. However, the data showed trade deficit narrowed to $9.8 billion in October compared with $10.5 billion in the previous month. Markets were also supported by the gain in domestic currency in line with all major Asian currencies. The rupee had ended stronger at 66/dollar in last session too.

The global markets remained mostly in a jubilant mood and after the US markets posted their strongest session in three weeks overnight, the Asian markets too followed the trend, with majority of them posting gains in excess of a percent ahead of the US inflation data release. The European markets too extended the global rebound as concern about the geopolitical impact of the attacks in Paris faded.

Back home, markets which started showing a range bound trade in first half bounced back after slipping into the negative territory in early noon trade, when the banking stocks came under pressure on profit-taking. However, commodity stocks tailing the gains in global markets kept the momentum going and led the markets to a positive close. Meanwhile, the sentiments got a boost with Finance Minister Arun Jaitley stating that the government would prefer to use buoyant tax receipts to fund extra infrastructure spending than to slash its borrowing target for the current fiscal year. Finally the markets ended with gains of around half a percent led by surge in some bluechip stocks. On the sectoral front, the IT sector remained under pressure due to strength in rupee and as IT major Infosys warned about weak margins in the December quarter. Though, the company said that it will maintain margins in the guided 24-26 per cent band through higher employee utilization and cost optimization.

Oil sector stocks kept buzzing after the government issued a new draft hydrocarbon policy under which blocks will be awarded on the basis of a simpler revenue-sharing model versus the earlier profit-sharing model. GAIL which is likely to be the biggest beneficiary surged by around 5%.  In non sectoral gauge, sugar was once again in jubilant mood with many of them touching the upper circuit limit on a report that India's sugar output is estimated to decline by 4.62 percent to 26.8 million tonnes in the 2015-16 marketing year. Also, the shortage in sugar supplies globally is expected to aid domestic sugar prices and increase realizations. Among the major players, EID Parry advanced by over 9 per cent. Bajaj Hindusthan gained over a per cent. Shree Renuka surged by over 19 per cent. Sakthi Sugars spurted by over 3 per cent and Simbhaoli Sugars soared by around 9 percent.

The BSE Sensex ended at 25861.93, up by 101.83 points or 0.40% after trading in a range of 25732.79 and 25948.20. There were 18 stocks in green against 12 stocks in red on the index.

The broader indices too managed a positive close; the BSE Mid cap index was up by 0.29%, while Small cap index gained 0.49%.

The top gaining sectoral indices on the BSE were FMCG up by 2.25%, Metal up by 1.07%, Auto up by 0.54%, Oil & Gas up by 0.34%, Power up by 0.33%, while Consumer Durables down by 0.41%, Bankex down by 0.33%, IT down by 0.32%, Realty down by 0.28%, TECK down by 0.17% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 4.63%, ITC up by 3.04%, Vedanta up by 2.84%, Hindalco up by 2.34% and Tata Steel up by 2.33%. On the flip side, Infosys down by 1.77%, Dr. Reddys Lab down by 1.73%, Axis Bank down by 1.33%, Bajaj Auto down by 0.83% and Reliance Industries down by 0.62% were the top losers.

Meanwhile, Indian merchandise exports contracting for the eleventh straight month plunged by 17.33 percent in the month of October to $21.35 billion. The significant fall in exports is attributed to weak global demand, amid a tepid global economic recovery. The last time Indian exports registered a positive growth was in November 2014, when shipments had expanded at a rate of 7.27 percent. On the positive side the imports too declined by over 21.15 percent from a year earlier to $31.12 billion, narrowing the trade gap to $9.77 billion in October from $10.48 billion in September and $13.35 billion in the year ago period. The trade deficit for April-October, 2015-16 was estimated at $ 77762.06 million which was lower than the deficit of $ 86269.45 million during April-October, 2014-15.

According to the data released by the Commerce Ministry, Indian exports in dollar terms stood at $21352.79 million which was 17.53 per cent lower than the level of $25891.39 million during October, 2014. In Rupee terms the exports valued at Rs 138916.98 crore which was 12.53 per cent lower than the level of Rs.158822.95 crore in the same period last year. Cumulative value of exports for the period April-October 2015-16 was $154292.24 million as against $187288.74 million in same period last year, registering a negative growth of 17.62 per cent in Dollar terms. In Rupee terms cumulative exports for the period April-October 2015-16 stood at Rs 992503.57 crore as against Rs 1130539.38 crore in April-October 2014-15, down by 12.21 per cent.

Meanwhile, Imports during October, 2015 were valued at $31120.06 million in dollar terms, 21.15 per cent lower over the level of imports valued at $39468.76 million in same period last year. In rupee terms imports were valued at Rs 202460.88 crore, which was 16.38 per cent lower than Rs 242109.24 crore during October 2014. Cumulative value of imports for the period April-October 2015-16 in Dollar terms was $232054.30 million, as against $273558.19 million, registering a negative growth of 15.17 per cent in Dollar terms. In rupee terms the imports for the period April-October 2015-16 stood at Rs1492679.30 crore, down by 9.62 per cent compared to Rs 1651512.80 crore in the same period last year.

Oil imports which accounts for 31 percent of the total imports dropped by 45.31 per cent during October, 2015 at $6846.11 million than oil imports valued at $12517.24 million in the corresponding period last year. Oil imports during April-October, 2015-16 were valued at $54975.07 million which was 42.07 per cent lower than the oil imports of $94896.22 million in the corresponding period last year. Non-oil imports during October, 2015 were estimated at $24273.95 million which was 9.93 per cent lower than non-oil imports of $26951.52 million in October, 2014. Non-oil imports during April-October, 2015-16 were valued at $177079.23 million which was 0.89 per cent lower than the level of such imports valued at $178661.97 million in April-October, 2014-15.

The CNX Nifty ended at 7830.35, up by 23.75 points or 0.30% after trading in a range of 7793.00 and 7860.45. There were 29 stocks on gainers side against 21 stocks on decliners side on the index.

The top gainers on Nifty were GAIL India up by 4.02%, Cairn India up by 3.57%, ITC up by 3.03%, Vedanta up by 2.79% and Ambuja Cement up by 2.50%. On the flip side, BPCL down by 2.34%, Dr. Reddys Lab down by 1.97%, Bank Of Baroda down by 1.93%, Grasim Industries down by 1.81% and Infosys down by 1.65% were the top losers.

European markets were trading higher, France’s CAC surged by 101.39 points or 2.11% to 4,905.70, UK’s FTSE 100 gained 112.51 points or 1.83% to 6,258.89 and Germany’s DAX was up by 187.26 points or 1.75% to 10,900.49.

The Asian markets closed mostly higher on Tuesday, after a solid rebound for Wall Street and oil prices pushed markets higher, helping them recoup gains suffered in the aftermath of last week’s attacks in Paris. Japanese Prime Minister Shinzo Abe said that the Bank of Japan is unlikely to offer any further monetary easing this year to avoid unwelcome yen falls that would hurt low-income households.  Japan’s economy slipping into a technical recession for the second time since Prime Minister Shinzo Abe came to office has led to question the efficacy of his aggressive blend of economic policies dubbed ‘Abenomics’. Indonesian Vice President Jusuf Kalla stated that the central bank, which is about to begin its monthly policy meeting, should cut its benchmark interest rate. The poll conducted showed that Bank Indonesia will hold its rate at 7.50 percent, where it has been since February, in the wake of rising expectations of a rate hike in the United States next month. Indonesian Finance Minister Bambang Brodjonegoro stated that China had agreed to increase a bilateral currency swap agreement with the country to $20 billion from $15 billion. Sales of private homes by developers in Singapore fell 30 percent in October from a year earlier. The Urban Redevelopment Authority showed developers sold 546 units last month, compared with 785 units in October 2014. The figure compares with 341 units sold in September of this year.