Post Session: Quick Review

Indian markets trading in tandem with their global counterparts ended considerably lower on Thursday. The trade after a lower start looked consolidating near the lower levels, but the selling in the final hours dragged the markets near the lows of the day, with benchmarks suffering cut of around a percent. Foreign investors were selling the frontline stocks, on worries that a hike in US interest rates would lead to capital outflows that kept the markets under pressure. Traders turned a bit more concerned with India's services activity broadly posting a five-month low of 50.2 compared with 52.6 in October, which was an eight-month high. Services companies had the slowest rise in incoming new work since July. The report follows, India's manufacturing growth slumping to a 25-month low in November. Rupee too turned lower against the US dollar, which rose on expectations of a rate hike by the US Federal Reserve at its December meet.

On the global front, the US slump overnight extended to the Asian markets and most of the indices in the region ended in red, as the Federal Reserve Chair Janet Yellen reinforced expectations for a December rate increase. However, the European markets made a positive start, as the ECB is expected to further reduce its deposit rate and expand asset purchases and the euro dropped toward a seven-month low. Also, a UK services gauge rose more than expected in November as new business picked up. Markit Economics’ purchasing-managers’ index rose to 55.9, indicating the fastest pace of growth in four months.

Back home, markets were seen struggling in the final moments with intensified selling pressure, the concerns over Fed rate hike has led to a selloff in whole emerging market assets. There was no respite despite affirmation by Standard & Poor's Ratings Services that India's economy will grow at 7.4 percent in the current fiscal, which will further improve to over 8 percent in 2016-17. The Asian Development Bank (ADB) too kept its economic growth forecast for India unchanged at 7.4 percent for the current financial year and 7.8 per cent for the next fiscal. Traders even overlooked government’s statement that the current regulatory framework on Participatory Notes (P-Notes) is strict and robust, hinting that there may not be any change required in the rules at the moment. The comments assume significance following the Supreme Court-appointed SIT on black money asking Sebi to review its regulations on P-Notes and identify their end-users. The FMCG and metals were the top sectoral loser, metals and oil & gas stocks were under pressure with price of dollar-denominated commodities like gold and crude oil falling in global markets. The IT and Utilities are sector stocks that showed some strength in early deals, too lost their way, while the realty emerged as the lone gainer. Shares of auto and IT services companies fell as torrential rains in the southern state of Tamil Nadu hit normal business activities.

The BSE Sensex ended at 25871.95, down by 245.90 points or 0.94% after trading in a range of 25857.35 and 26123.86. There were just 4 stocks in green against 26 stocks in red on the index. (Provisional)

The broader indices too lost their momentum and ended in red; the BSE Mid cap index was down by 0.43%, while Small cap index lost 0.57%. (Provisional)

The lone gaining sectoral index on the BSE was Realty up by 0.20%, while FMCG down by 1.56%, Consumer Durables down by 1.51%, Metal down by 1.48%, PSU down by 1.14%, Auto down by 0.76% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 0.79%, NTPC up by 0.60%, Maruti Suzuki up by 0.26% and HDFC Bank up by 0.06%. On the flip side, Lupin down by 2.76%, ONGC down by 2.67%, BHEL down by 2.60%, Vedanta down by 2.18% and ITC down by 2.13% were the top losers. (Provisional)

Meanwhile, the Union cabinet going a step further in government’s push to policy reforms, has given ex-post-facto approval to the easing of foreign direct investment (FDI) policy in 15 sectors that was approved by the Prime Minister Narendra Modi last month.

The Cabinet at its meeting approved all the relaxations in FDI policy for 15 sectors, which include; increasing foreign-investor limits in several sectors including private banks, defence and non-news entertainment media; and allowing property developers to sell completed projects to foreign investors without lock-in periods

The government had freed the restrictions in the construction sector by allowing overseas investors to exit and repatriate investment even before project completion, foreign direct investment (FDI) up to 49 percent stake in defence firms and regional airlines has been allowed without government nod.

The government had also raised financial power of the Foreign Investment Promotion Board (FIPB) to give single window clearance for investment projects of up to Rs 5,000 crore from Rs 3,000 crore.

The CNX Nifty ended at 7865.50, down by 65.85 points or 0.83% after trading in a range of 7853.30 and 7912.30. There were just 8 stocks on gainers side against 42 stocks on decliners’ side on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 0.74%, Tech Mahindra up by 0.54%, Indusind Bank up by 0.42%, NTPC up by 0.41% and Maruti Suzuki up by 0.25%. On the flip side, ONGC down by 2.76%, BHEL down by 2.74%, Lupin down by 2.46%, PNB down by 2.36% and Vedanta down by 2.33% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 gained 11.54 points or 0.18% to 6,432.47, France’s CAC was up by 49.84 points or 1.02% to 4,955.60 and Germany’s DAX gained 104.21 points or 0.93% to 11,294.23.

Asian markets ended mostly in red on Thursday after crude oil prices fell below the $40 a barrel mark overnight and hawkish comments from Federal Reserve Chair Janet Yellen reinforced the case for an interest rate hike later this month. Yellen said the US economy had ‘recovered substantially’ and consumer spending was ‘particularly solid’. Hong Kong stocks weakened, as investors assessed the effects of diverging global monetary policies after the market rallied this week on the Chinese yuan's global reserve currency status. However, Shanghai Composite ended higher brushing aside a Caixin/Markit Purchasing Managers' Index showing China's services sector growth cooling in November. Weak indicators often stir hopes of government stimulus, providing a burst of support for Chinese shares. Japanese stocks ended littlechanged in choppy trade as investors were content to adopt a conservative approach before the European Central Bank's policy decision later in the day