Benchmarks end flat ahead of GDP data, RBI monetary policy review

Indian equity benchmarks ended the Monday’s session flat, as investors remained on sidelines ahead of ahead of Gross Domestic Product (GDP) data to be announced later in the day. Traders also remained wary ahead of Reserve Bank of India’s (RBI) fifth bi-monthly monetary policy review tomorrow and continuing fund outflows by foreign investors. India's economic growth likely picked up in the July-September quarter, outpacing China on improving domestic demand and manufacturing activity that could persuade the Reserve Bank of India to keep interest rates unchanged on Tuesday.

Some concern also came with report that foreign portfolio investors pulled out more than $1 billion from the domestic equity and bond market over the last one month. In 2015-16 so far, foreign institutional investors (FIIs) have sold $2.40 billion in equity, the steepest selling since fiscal year 2009. However, the markets got some support with report that government in a move to bring the Congress on board and pass the Goods and Service Tax (GST) Bill in the Parliament, may opt for more than one GST rate. GST could help raise GDP growth to around 8 percent in the next fiscal year.

On the global front, European counters made a weak start as investors remained cautious ahead of a much-anticipated policy decision by the European Central Bank on Thursday. Asian markets ended mostly in red, as Chinese stocks extended last week's sharp losses, while the yuan bounced in volatile trade hours ahead of an IMF decision on whether to promote it to a basket of global reserve currencies.

Back home, recovery in Indian rupee aided sentiments. Rupee was trading at 66.66 per dollar at the time of equity markets closing compared with its previous close of 66.76. Buying in Capital goods counter too supported the sentiments, after the Heavy Industries and Public Enterprises Minister Anant Geete said the government is committed to provide all necessary support to make India`s manufacturing sector globally competitive and a wide array of smart technologies needs to be adopted for the purpose. Stocks related to auto space too remained on buyers’ radar, as buying emerged in Maruti Suzuki, Tata Motors and Ashok Leyland ahead of their inclusion in MSCI India index which will be effective from 1st December.

The NSE’s 50-share broadly followed index Nifty declined marginally and managed to hold the psychological 7,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose around twenty points to end above its crucial 26,100 mark. Broader markets traded with traction and ended the session with a gain of around half a percent. The market breadth remained in favor of advances, as there were 1,632 shares on the gaining side against 1,073 shares on the losing side while 211 shares remain unchanged.

Finally, the BSE Sensex gained 17.47 points or 0.07% to 26145.67, while the CNX Nifty lost 7.45 points or 0.09% to 7935.25. 

The BSE Sensex touched a high and a low 26231.06 and 26089.13, respectively. The BSE Mid cap index was up by 0.05 %, while Small cap index was up by 0.79%.

The top gaining sectoral indices on the BSE were IT up by 1.07%, Consumer Durables up by 1.04%, Realty up by 0.97%, TECK up by 0.58% and Power up by 0.55%, while FMCG down by 0.63%, Healthcare down by 0.41% and Metal down by 0.35% were the losing indices on BSE.The top gainers on the Sensex were Infosys up by 2.08%, ICICI Bank up by 1.67%, Mahindra & Mahindra up by 1.41%, Tata Motors up by 1.39% and Bajaj Auto up by 1.34%. On the flip side, Bharti Airtel down by 2.09%, Vedanta down by 1.96%, Coal India down by 1.65%, Lupin down by 1.31% and Sun Pharma down by 1.26% were the top losers.

Meanwhile, united Arab Emirates (UAE) would contribute to the $75 billion fund allotted for investments in India for which it has identified key sectors including railways, housing, ports, roads and renewable energy (mainly solar). Abu Dabhi Investment Authority (ADIA) had announced to invest a huge $75 bn for various sectors where the government is seeking FDI to boost economy.

India is now a strategic partner for UAE and Abu Dabhi wants to invest in India's growth and seeking expedition of the process on the ground. UAE is pushing to begin the process of investments in near future by various Ministries in keeping with Modi's promise.

Additionally, the Finance Minister has also invited large participation and investment in recently constituted National Investment and Infrastructure Fund (NIIF) by the Sovereign Wealth Funds and Pensions Funds of the UAE stating that the investment in NIIF will ensure good returns on investment as the Government will invest these funds in infrastructure projects. Furthermore, Jaitley raised the issue of fresh negotiations among officials of India and UAE for finalizing the terms of reference of the new Bilateral Investment Promotion Agreement (BIPA) as the existing BIPA is expiring by this December and the new BIPA will come in existence from next January.The CNX Nifty touched a high and low 7966.00 and 7922.80 respectively. 

The top gainers on Nifty were Power Grid up by 2.02%, Indusind Bank up by 1.69%, Infosys up by 1.57% Tata Power up by 1.43% and Tata Motors up by 1.40%. On the flip side, Asian Paints down by 2.23%, Bharti Airtel down by 2.15%, Vedanta down by 1.90%, Coal India down by 1.56% and NTPC down by 1.54% were the top losers.

European Markets were trading mostly in green; France’s CAC was up by 0.16% and Germany’s DAX was up by 0.51%, while UK’s FTSE was down by 0.32%.   

The Asian markets closed mostly lower on Monday as investors awaited key global policy and data events this week, including monetary policy meeting of the European Central Bank. Shanghai Composite rose modestly in volatile trade after posting their worst weekly performance since August last week on news of investigations into three major Chinese brokerages over suspected securities violations. Stocks in Hong Kong though tumbled ahead of an IMF decision to include the Chinese yuan in its Special Drawing Rights reserve currency later in the day and China's November PMI readings due on Tuesday. Japanese shares eased after a slew of data painted a mixed picture of the world's third largest economy. Japan's factory output rose 1.4% in October from a month ago, marking the second consecutive monthly rise, although the figure fell short of forecasts. Separate data showed retail sales rose 1.8 percent in the year to October, more than a 0.8 percent annual gain expected. Seoul shares too fell, pressured by a tumble in Chinese markets the previous session and data showing a surprise drop in industrial output.