Benchmarks end choppy session with marginal losses

Indian equity benchmarks ended the choppy day of trade with modest cut on Tuesday, as investors remained on sidelines ahead of expiry of November derivative contracts on Thursday. Markets will remain shut tomorrow on account of Gurunanak Jayanti. The cautiousness was also ahead of the start of winter session of Parliament on Thursday, 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.

Moreover, traders will also eye 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.

On the global front, European counters have made weak start, extending their decline for the second straight session, as capital investment and exports in the region missed estimates. However, Asian counters ended mostly in green. Chinese markets managed to end with marginal gains 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.

Back home, sentiments also remained dampened on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 35.37 crore on November 23, 2015, as per provisional data released by the stock exchanges. However, appreciation in rupee helped benchmarks to limit downfall. The rupee recovered from over two-month low by rising 6 paise to 66.41 against the dollar at the time of equity markets closing at the Interbank Foreign Exchange on fresh selling of the US currency by exporters and banks.

Buying in Oil & Gas counters provided some support to the markets after the report that Qatar has agreed to waive USD 1 billion penalty on India for breaking a long-term LNG contract, and has also consented to change the pricing formula. Metal stocks too remained on buyers’ radar after Finance Minister Arun Jaitley’s statement 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 NSE’s 50-share broadly followed index Nifty declined by around twenty points to end below the psychological 7,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over forty points to end below its crucial 25,800 mark. Broader markets, however, managed to end the session marginally in green. The market breadth remained in favor of decliners, as there were 1,475 shares on the gaining side against 1,182 shares on the losing side while 205 shares remain unchanged.

Finally, the BSE Sensex declined by 43.60 points or 0.17% to 25775.74, while the CNX Nifty lost 17.65 points or 0.22% to 7831.60. 

The BSE Sensex touched a high and a low 25901.56 and 25703.86, respectively. The BSE Mid cap index was up by 0.08%, while Small cap index was up by 0.33%.   

The top gaining sectoral indices on the BSE were Realty up by 1.29%, Oil & Gas up by 0.63% and PSU up by 0.04%, while Capital Goods down by 1.20%, Auto down by 0.74%, IT down by 0.66%, TECK down by 0.53% and Healthcare down by 0.46% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.42%, HDFC up by 2.09%, Reliance Industries up by 1.67%, Bharti Airtel up by 1.14% and Lupin up by 1.12%. On the flip side, Maruti Suzuki down by 2.05%, Larsen & Toubro down by 1.94%, Bajaj Auto down by 1.91%, Sun Pharma down by 1.50% and NTPC down by 1.32% were the top losers.

Meanwhile, finance Minister Arun Jaitley has said that the government will sell stake in some state-owned companies, especially those in metals business only when market conditions improve amid concerns that the disinvestment target of Rs 69,500 crore for the current fiscal year may be missed. Jaitley said “I have already said there are few stocks, especially metal stocks, which are down globally. Therefore, in such circumstances it would not be appropriate to sells such stocks in the market”.

For the current financial year, the government has budgeted to raise Rs 69,500 crore through disinvestment, 180 per cent higher than the total amount garnered from PSU share sales in the previous fiscal, though the government has missed its divestment target for five years in a row. Of this, Rs 41,000 crore is to come from minority stake sale in PSUs and the remaining Rs 28,500 crore from strategic stake sale. With eight months of the current fiscal about to be over, the government has been able to sell stake only in four companies -- PFC, REC, Dredging Corp and IOC to net Rs 12,600 crore.

For the current fiscal, the government has a pipeline of over 20 PSUs for offloading part stake for which it already has the Cabinet approval which include 10 per cent stake sale each in OIL, Nalco, NMDC, and 5 per cent each in NTPC, ONGC, BHEL. Besides, plans are afloat for 10 per cent stake sale in Coal India. However, volatile market conditions have dented the prospects of a stake sale, with the recent disinvestments of IOC and PFC facing rough weathers.

The CNX Nifty touched a high and low 7870.35 and 7812.65 respectively. 

The top gainers on Nifty were Hindustan Unilever up by 2.73%, HDFC up by 2.56%, Reliance Industries up by 1.61%, Bharti Airtelup by 0.88% and Grasim industries up by 0.79%. On the flip side, Bosch down by 2.92%, Adani Ports &Special down by 2.26%, Maruti Suzuki down by 2.16%, GAIL down by 2.06% and Larsen & Toubro down by 2.04% were the top losers.

European Markets were trading in red; France’s CAC was down by 0.1.28%, Germany’s DAX was down by 0.72% and UK’s FTSE was down by 0.73%.

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.