Post Session: Quick Review

Markets showed a lackluster trade on Tuesday and ended modestly in red on the penultimate session of the F&O series expiry, with sentiments remaining cautious given the amount of contracts rolled over to the next month remaining low compared to previous series. The cautiousness was also ahead of the start of winter session of Parliament on Thursday will all eyes on development on GST after Parliamentary Affairs Minister Venkaiah Naidu said that the government is reaching out to the Opposition to bring it on board to ensure passage of the Constitution Amendment Bill for GST. A key panel on goods and services tax is likely to recommend a revenue-neutral rate of about 18 per cent. The group, headed by Chief Economic Adviser Arvind Subramanian, has zeroed in on the rate after considering various scenarios, brightening the chances for this important reform as the low rate should be acceptable to everyone. Meanwhile, Minister of State for Finance Jayant Sinha has said that the high-powered committee to suggest revenue neutral GST rate will submit its report in the first week of December.

The global markets though showed a mixed trend, as the US markets ended modestly in red in last session on some weak economic data, while the Asian markets ended mostly in green, though any major gains was restricted by the drop in materials shares. The expectations that the Federal Reserve will raise borrowing costs at its meeting next month too underpinned gains after Fed Chair Janet Yellen stated that she expects policy will be tightened “gradually” after the initial increase. The Chinese markets managed a green closing after the nation canceled a rule requiring brokerages to hold daily net long positions in their proprietary trading accounts as the nation’s stock market stabilizes. The European markets too made a weak start extending their decline for the second straight session, as capital investment and exports in the region missed estimates.

Back home, the markets despite choppiness kept moving in range for the most part of the day, however there was some selling pressure witnessed in the second half after the European markets made a weak start, though there was some recovery as well, pulling back the indices from the day's low but the markets remained under pressure, unable to get back into green till the last. The strength in rupee, which recovered from a two-month low, too was unable to support the markets. The rupee had slipped considerably against the greenback in the previous session on fresh month-end dollar demand from importers and banks. Back on street, markets remained under pressure owing to weakness in IT, capital goods, auto and select banking stocks. Meanwhile, the broader markets outperforming the benchmark indices ended higher. Oil and gas sector stocks extended their upmove after the crude prices in the global markets improved with Saudi Arabia pledging to work toward oil price stability and Qatar agreeing to waive $ 1 billion penalty on India for breaking a long-term LNG contract. It has also consented to change the pricing formula to reflect the slump in global energy rates. Metals pack too showed some jubilation with Finance Minister Arun Jaitley stating that government is considering “proactive steps” to improve the health of steel and aluminium sectors which are reeling under the impact of decline in global prices. The top gainers of the day was the realty pack with stocks making big move on expectations that the government may push the Real Estate Bill in the winter session of Parliament.

The BSE Sensex ended at 25768.83, down by 50.51 points or 0.20% after trading in a range of 25703.86 and 25901.56. There were 9 stocks in green against 21 stocks in red on the index. (Provisional)

The broader indices outperforming the benchmarks made a positive close; the BSE Mid cap index was up by 0.08%, while Small cap index gained 0.30%. (Provisional)

The gaining sectoral indices on the BSE were Realty up by 1.17%, Oil & Gas up by 0.61% while, Capital Goods down by 1.21%, Auto down by 0.79%, IT down by 0.66%, TECK down by 0.51%, Power down by 0.48% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 2.81%, HDFC up by 2.03%, Reliance Industries up by 1.78%, Bharti Airtel up by 1.14% and ONGC up by 0.73%. On the flip side, Maruti Suzuki down by 2.05%, Larsen & Toubro down by 1.97%, Bajaj Auto down by 1.91%, NTPC down by 1.66% and Sun Pharma Inds. down by 1.63% were the top losers. (Provisional)

Meanwhile, Finance Minister Arun Jaitley has said that the government is willing to consider sectoral interventions to stressed sectors such as steel and aluminum at the second-quarter performance review meeting of public sector banks (PSBs). There were discussions on banks that are facing difficulties on loan quality front. Jaitley said “Results will not come overnight. The problems of each sector have to be addressed separately. The series of steps announced by the RBI will help improve the asset quality situation. The government on its part has also been taking proactive steps in certain sectors”.

Expressing confidence, Jaitley said that asset quality of the PSBs would improve considerably in a reasonable time on the back of a series of steps announced by the RBI and being implemented by several banks. Further, he said that part of the problem of the “unacceptable level of NPAs” could be attributed to the “pressures of the past”, which need to be removed.   

Highlighting willful defaulters and banks' willingness to take action, Jaitley asserted that PSBs already had the required “authority” and “autonomy” to effectively deal with each of their debtors. He further stated that the ability of banks to get failed borrowers to exit will increase if the bankruptcy law gets enacted in Parliament soon

The CNX Nifty ended at 7829.90, down by 19.35 points or 0.25% after trading in a range of 7812.65 and 7870.35. There were 16 stocks on gainers side against 34 stocks on losers’ side on the index. (Provisional)

The top gainers on Nifty were Hindustan Unilever up by 2.58%, HDFC up by 2.48%, Reliance Industries up by 1.46%, Lupin up by 0.85% and Grasim Industries up by 0.82%. On the flip side, Bosch down by 3.02%, Adani Ports &Special down by 2.21%, Maruti Suzuki down by 2.12%, Larsen & Toubro down by 2.04% and Bajaj Auto down by 1.95% were the top losers. (Provisional)

European markets were trading in red, Germany’s DAX was down by 96.29 points or 0.87% to 10,996.02, France’s CAC was lower by 67.11 points or 1.37% to 4,822.01 and UK’s FTSE 100 was down by 51.97 points or 0.82% to 6,253.52.

The Asian markets closed mostly higher on Tuesday while investors treading cautiously following the weak cues overnight from Wall Street. Chinese Premier Li Keqiang stated that China was on track to reach its economic growth target of about 7 percent this year, and the economy was going through adjustments to maintain reasonable medium- to long-term growth. Li added that China was studying the possibility of establishing of a multilateral financial institution with Central and Eastern European countries, as well as a joint fund denominated in Chinese yuan. Japan’s government is expected to finalize plans to raise the minimum wage, and encourage companies to increase annual pay as part of a package of policies aimed at strengthening consumer spending and stoking economic growth. The government is also likely to offer cash handouts to some pensioners in an attempt to lessen the burden of rising food costs and do more to support the household sector. Prime Minister Shinzo Abe and his cabinet are expected to decide the details on wages at a meeting scheduled later today as the government tries to breathe new life into an economy that has struggled with patchy domestic demand. Japan’s trade balance rose to a seasonally adjusted -0.20T compared to -0.31T in the preceding month.