Benchmarks end volatile session with marginal losses

Indian equity benchmarks ended the volatile day of trade slightly in the red as investors remained on sidelines ahead of expiry of November derivative contracts on Thursday. Selling in last leg of trade mainly dragged the markets lower. Sentiments remained downbeat on reports that overseas investors have pulled out more than $1billion from the Indian capital markets since the beginning of the month due to lacklustre quarterly earnings and concerns over a possible rate hike by the US Federal Reserve. Also, expressing concern over slowdown in the pace of reforms, global rating agency Standard & Poor's has said that India's rating could come under stress if government fails to pursue reforms agenda and overshoots fiscal deficit target.

However, losses remained capped as some support came with former governor of RBI C Rangarajan’s statement that Indian economy will slightly perform better this year as the productivity level of capital may remain high. Though the growth rate of economy will be somewhere around 7.5 percent, the productivity of capital is less than investment growth and should catch up. Further, the markets will closely watch the winter session of Parliament, beginning this week, which sets the agenda of the government. NDA's recent reverses in Bihar elections have put a cloud over the pace of reforms, and market participants fear that it won't be smooth sailing in Parliament.

On the global front, European counters were trading in red after the release of mixed economic reports from Germany and France. Asian markets ended mostly in red as commodity producers tracked a slide in industrial metals and crude oil. Japanese markets were closed for the Labor Thanksgiving Day holiday.

Back home, depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 66.43 per dollar at the time of equity markets closing compared with its previous close of 66.18. Banking stocks remained buzzing with Finance Minister Arun Jaitley meeting with public sector bankers for a review of their performance so far. The major thrust areas of review was said to be Priority Sector lending, Quarter-2 results, Financial Literacy, PMMY and Insurance and Pension schemes.

However, oil & gas stocks remained on buyers’ radar after Qatar agreed to waive $ 1 billion penalty on India for breaking a long-term LNG contract, and has also consented to change the pricing formula to reflect the slump in global energy rates. Auto stocks too remained in focus following the seventh pay panel's better-than-expected recommended hike.

The NSE’s 50-share broadly followed index Nifty declined by around ten points to end below the psychological 7,850 support level, while Bombay Stock Exchange’s Sensitive Index – Sensex slipped by around fifty points but managed to hold its psychological 28,800 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of around half a percent. The market breadth remained in favour of advances, as there were 1,484 shares on the gaining side against 1,180 shares on the losing side while 178 shares remain unchanged.

Finally, the BSE Sensex declined by 49.15 points or 0.19% to 25819.34, while the CNX Nifty lost 7.30 points or 0.09% to 7849.25. 

The BSE Sensex touched a high and a low 25958.04 and 25747.01, respectively. The BSE Mid cap index was up by 0.36 %, while Small cap index was up by .46%.   

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.14%, Realty up by 0.86%, Auto up by 0.68%, Healthcare up by 0.49%, Oil & Gas up by 0.48% and TECK up by 0.12%, while Metal down by 1.21%, FMCG down by 1.17% and PSU down by 0.21% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.87%, GAIL India up by 2.77%, Bajaj Auto up by 2.22%, Dr. Reddys Lab up by 1.55% and Lupin up by 1.43%. On the flip side, Hindalco down by 3.82%, Vedanta down by 2.90%, Tata Steel down by 2.31%, ITC down by 2.03% and Sun Pharma Inds. down by 1.07% were the top losers.

Meanwhile, in order to help taxpayers fill the income tax return (ITR) form without seeking help from expert, the government is looking to further simplify the ITR forms. In this regard, the Revenue department has set up a committee which will be headed by a Joint Secretary level officer and would include chartered accountants and tax experts.

The committee will look into the possibility of reducing the number of pages in the return form. The effort would be to come out with a simple formula for indexation to help assesses compute capital gains on sale of assets.

Earlier in June, the Income Tax department had come out with a simplified tax return form for salaried class. Filers now have to disclose the total number of savings and the current bank accounts held by them at any time during the previous year (excluding dormant accounts). The form also has space to fill up the IFSC code of the bank and in an additional feature, tax filers have been given an option to indicate their bank accounts in which they would want their refund credited. The ITR also has sought the Aadhaar number of filers.

The tax department had come out with simplified ITR after experts raised objections to the 14 page form which was notified earlier in the year. The form sought details of bank accounts and foreign visits and following controversy, the Revenue Department announced putting them on hold.

The CNX Nifty touched a high and low 7877.50 and 7825.20 respectively.

The top gainers on Nifty were GAIL India up by 4.96%, Hero MotoCorp up by 3.05% Asian Paints up by 2.61%, Zee Entertainment up by 2.45% and Idea Cellular up by 2.42%. On the flip side, Hindalco down by 3.63%, Vedanta down by 3.01%, Tata Steel down by 2.30%, ITC down by 2.03% and Bank of Baroda down by 1.37% were the top losers.

European Markets were trading in red; France’s CAC was down by 0.74%, Germany’s DAX was down by 0.28% and UK’s FTSE was down by 0.66%.  

The Asian markets closed mostly lower on Monday, as investors continued to weigh the outlook for global monetary policies. Japan’s stock exchange was closed on account of ‘Labour Thanksgiving Day’ holiday. Japan’s government plans to raise the minimum wage and introduce other steps to revitalize the economy, but the draft of stimulus measures appeared to break no new ground on reforms that needed to end decades of stagnation. Prime Minister Shinzo Abe’s government will also offer some financial support to people living off their pensions to bolster consumer spending. Raising wages is an urgent task for policymakers as Tokyo is keen to ramp up consumer spending, which is seen as crucial to boosting domestic demand and pulling the economy out of 15 years of deflation. Indonesia President Joko Widodo’s administration has dropped plans to introduce a seventh stimulus package aimed at propping the economy and instead will review previous policy changes. The package’s focus was to be on village funds as the government aims to increase the purchasing power of consumers in rural areas and to accelerate infrastructure development in small villages. South Korea’s average disposable household income grew a slim 0.2 percent in real terms in the third quarter over a year earlier, the slowest in nearly two years.