Benchmarks extend southward journey for fourth straight day

Extending their southward journey for fourth day in a row, Indian equity benchmarks ended the Monday’s trade with a cut of around one third of a percent. After a positive start, domestic bourses lost momentum in absence of any positive trigger and entered into the red terrain as traders remained concerned ahead of the US Federal Reserve's meeting next week, where it is widely expected to raise rates for the first time in about a decade. Sentiments also remained dampened on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 1,745.73 crore on December 04, 2015.

However, losses remained capped as some encouragement came with the committee headed by Arvind Subramanian on goods and services tax (GST) rates coming up with an amicable solution to the ongoing confrontation of the government and the Opposition, suggesting 17-18 percent GST rate and dropping of the one per cent additional tax on inter-state sales. Industry bodies FICCI and Assocham too welcomed the recommendations put forth by the Arvind Subramanian panel and said rollout of the tax reform will add 2 percent to India's growth and usher in efficiency and transparency in the indirect tax regime.

Positive opening in European markets too provided some support with CAC, DAX and FTSE all were trading in the green in early deals after a solid jobs report from the US. Also, ECB President Mario Draghi commented that quantitative easing was unlimited. There is no particular limit to how we can deploy any of our tools. Asian markets ended mostly in green, led by the Japanese markets which surged around a percent, ahead of the Bank of Japan’s governor speech, as the divergence in global monetary policy becomes more stark.

Back home, some support also came in with Fitch Ratings affirming India's Long-Term Foreign- and Local-Currency Issuer Default Ratings at 'BBB-', while the Outlooks on the Long-Term IDRs are Stable. The Country Ceiling is affirmed at 'BBB-' and the Short-Term Foreign-Currency IDR at 'F3'. Outlook balances a strong medium-term GDP growth outlook and favourable external finances, including a strong foreign reserves buffer, with a high government debt burden and weak structural features, including a difficult - but improving - business environment.

On the sectoral front, FMCG remained the top loser with ITC contributing the most to the decline after Arvind Subramanian-led GST panel suggested that tobacco products including cigarettes will see a 40% tax. The taxation is over 25% value added tax (VAT) already charged on current products. On the flip side, shares of logistics companies remained on buyers’ radar as they would directly benefit if the GST bill gets passed in the Parliament.

The NSE’s 50-share broadly followed index Nifty declined by around twenty points to end below the psychological 7,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around one hundred and ten points to end below its crucial 25,600 mark. Broader markets too struggled to get any traction during the trade and ended the session mixed. The market breadth remained in favor of advances, as there were 1,446 shares on the gaining side against 1,316 shares on the losing side while 162 shares remain unchanged.

Finally, the BSE Sensex declined by 108.00 points or 0.42% to 25530.11, while the CNX Nifty lost 16.50 points or 0.21% to 7765.40. 

The BSE Sensex touched a high and a low 25785.53 and 25477.69, respectively. The BSE Mid cap index was down by 0.10 %, while Small cap index was up by 0.16 %.   

The top gaining sectoral indices on the BSE were Healthcare up by 0.77%, Realty up by 0.50%, Bankex up by 0.30%, Consumer Durables up by 0.29% and TECK up by 0.12%, while FMCG down by 2.45%, Metal down by 0.77%, PSU down by 0.70%, Oil & Gas down by 0.46% and Auto down by 0.20% were the losing indices on BSE.  

The top gainers on the Sensex were Sun Pharma up by 2.81%, Hindustan Unilever up by 2.01%, Lupin up by 1.41%, Tata Steel up by 1.39% and HDFC up by 1.20%. On the flip side, ITC down by 6.57%, Coal India down by 2.24%, ONGC down by 1.54%, Reliance Industries down by 1.25% and Maruti Suzuki down by 0.91% were the top losers. 

Meanwhile, Minister of State for Finance Jayant Sinha has said that government is working on universal health insurance scheme, similar to other social security scheme. Emphasising that the low cost of transaction is key to success of digital financial inclusion goal he said “One of the apps that the government is thinking about right now is health insurance then they have got national crop insurance and the government is working on that as well.” Sinha said that the government is working towards completely cashless digital economy.

Sinha further asserted that the government is solving access problem with social security open architecture and it can now load whole host of other applications on the top of the platform that they are building. Besides, he said that other applications can be put on that platform and it can also allow state government to put their schemes on that platform.

Currently, General insurance product Pradhan Mantri Jeevan Suraksha Bima Yojna while life insurance product Pradhan Mantri Jeevan Jyoti Bima Yojana is being provided through banks at a very low cost premium to all bank account holders including Jan Dhan account holders.

The CNX Nifty touched a high and low 7825.40 and 7746.05 respectively.

The top gainers on Nifty were Asian Paints up by 4.46%, Sun Pharma up by 2.95%, Hindustan Unilever up by 2.09%, Tech Mahindra up by 1.80% and HCL up by 1.67%. On the flip side, ITC down by 6.83%, Cairn India down by 2.66%, Coal India down by 2.30%, Reliance Industries down by 1.41% and ONGC down by 1.34% were the top losers.

European Markets were trading in green; France’s CAC was up by 1.66%, Germany’s DAX was up by 1.79% and UK’s FTSE was up by 0.57%.

Asian equity markets ended mostly in green on Monday following a positive US jobs report which showed that 211,000 jobs were created by the US economy in November beat market expectations, which cleared the way for the US Federal Reserve to raise interest rates next week for the first time since 2006. Although some gains were tempered by low oil prices and caution ahead of a slew of Chinese data due this week. Japanese market rallied as a weaker yen bolstered exporters' shares. China stocks edged up, with investors rotating from property companies back into tech and healthcare, sectors that Beijing hopes will be new engines of growth. A slew of data in coming weeks including trade data, consumer and producer price indexes, industrial production and retail sales are likely to show China's economic performance remains sluggish, reinforcing expectations that Beijing will implement more stimulus measures in coming months. Hong Kong shares ended fractionally lower, led by a tumble in energy heavyweights as investors worried about persistent weakness in oil prices.