Post Session: Quick Review

The growing uncertainty over the passage of the GST in the current session of parliament dragged the markets considerably lower. Benchmarks not only declined for the sixth straight session but lost their crucial psychological levels too. Though, the markets made a cautious start on the back of weak global cues but there were some signs of stabilization and they even attempted to enter the green in morning trade, but profit booking dragged them lower amid sluggish global cues. However, the major bourses came off the intraday low levels in the very second hour of trade and despite some choppiness maintained a tight range after a positive start of the European counters. Meanwhile, World Bank in a new policy research note 'Slowdown in Emerging Markets: Rough Patch or Prolonged Weakness? Said that emerging markets, with the exception of India, are facing their fifth consecutive year of slow growth and a possibly longer period of sluggish performance than previously thought, the report too weighed on the sentiments and traders opted to book profit, dragging the Sensex close to breaching the 25000 level and Nifty to 7600 level.

The Asian markets made mostly a lower closing despite the oil advancing from a six-year low. Though, in China where slowing economic growth has been a source of anxiety in commodity and stock markets, consumer-price data on Wednesday signaled a nascent recovery in demand and helped the major index to make a mildly positive close. The European markets after making a green start turned lower, as commodity extended their fall. Also, the British Chambers of Commerce (BCC) cut the UK growth forecast saying that a worsening global outlook will damp UK growth and persuade the Bank of England to keep its key rate at a record low until the third quarter.

Back home, selling which intensified in the last hour of trade was visible across the sectors. Traders overlooked the government statement that the fall in foreign portfolio investments may not have any major macroeconomic impact as long as capital flows are adequate to finance current account deficit. Markets remained under pressure of dimming hope of GST Bill passage and logistics stock that have been the flavor of the markets on hopes of GST Bill getting passed in the Winter session of Parliament, suffered sharp setback as the reform bill seems to have hit another roadblock with main opposition Congress disrupting the parliament. Pharma, metal, auto, realty, oil & gas and capital goods stocks were among the worst hit in trades. Pharma stocks were under pressure as the Venezuela development continued impacting Glenmark Pharmaceuticals and Dr Reddy's, which have revenues worth $137 million and $50 million, respectively, from that country. The victory of the Opposition party in the National Assembly elections may result in many economic reforms in the country due to a change in the political landscape. Metals following their global counterparts extended their fall despite a report that to curb cheap steel imports from China, Japan and Korea, the government is likely to restrict inward shipments to one port, apart from introducing a floor price for imports. The government had imposed a 20% safeguard duty in mid-September on certain categories of steel, but it failed to make much of a dent on rising imports.

The BSE Sensex ended at 25051.71, down by 258.62 points or 1.02% after trading in a range of 25012.22 and 25316.95. There were 6 stocks in green against 24 stocks in red on the index. (Provisional)

The broader indices too concluded with sharp cuts; the BSE Mid cap index was down by 1.72%, while Small cap index slumped by 2.12%. (Provisional)

Again there were no sectoral indices in green, while the top losing one on the BSE were Metal down by 2.88%, Auto down by 1.83%, Oil & Gas down by 1.75%, Capital Goods down by 1.26%, PSU down by 1.22%. (Provisional)

The top gainers on the Sensex were BHEL up by 2.64%, TCS up by 1.52%, ITC up by 0.65%, ONGC up by 0.56% and NTPC up by 0.04%. On the flip side, Vedanta down by 5.40%, Tata Steel down by 3.26%, Lupin down by 3.06%, Coal India down by 3.05% and Cipla down by 3.03% were the top losers. (Provisional)

Meanwhile, the Government for the second half of financial year 2015-16 has cut market borrowing target by Rs 15,000 crore. This amount will be raised through the Sovereign Gold Bond and Gold Monetisation Scheme, with no any impact on the overall borrowing, as this is merely substitution of one borrowing with another.

As per the RBI statement, the Government will raise Rs 2.49 lakh crore through market borrowings in the second half of the current fiscal. Out of which Rs 2.34 lakh crore will be raised through issue of Treasury Bills while Rs 15,000 crore would be raised through sovereign gold bonds. The government plans to borrow a total of Rs 6.01 lakh crore from the market this fiscal. For the first half of the financial year, it has borrowed about Rs 3.5 lakh crore, which is over 50 per cent of the annual target.

The government has budgeted gross and net market borrowing for FY16 at Rs 6 lakh crore and Rs 4.56 lakh crore, respectively. The second half borrowing programme was decided at a meeting chaired by Economic Affairs Secretary Shaktikanta Das. The government borrows money from the market through T-bills and other instruments to fund its fiscal deficit.

According to the government’s public debt management report released for the second quarter, the total public debt (excluding liabilities under the 'Public Account') of the Government increased to Rs 5,412,171 crore at end-September 2015 from Rs 5,301,394 crore at end-June 2015, increase of 2.1 per cent compared with an increase of 3.2 per cent in the previous quarter. Internal debt constituted 92.1 per cent of public debt, as compared with 92.3 per cent in the previous quarter. 

The CNX Nifty ended at 7618.25, down by 83.45 points or 1.08% after trading in a range of 7606.90 and 7702.85. There were just 6 stocks in green against 44 stocks in red on the index. (Provisional)

The top gainers on Nifty were BHEL up by 2.64%, TCS up by 1.76%, ITC up by 0.87%, ONGC up by 0.79% and NTPC up by 0.42%. On the flip side, Vedanta down by 5.62%, BPCL down by 3.62%, Cipla down by 3.23%, Coal India down by 3.18% and Tata Steel down by 3.17% were the top losers. (Provisional)

European markets giving up their early gains were trading in red, Germany’s DAX declined by 42.98 points or 0.4% to 10,630.62, France’s CAC was lower by 24.04 points or 0.51% to 4,657.82 and UK’s FTSE 100 lost 13.06 points or 0.21% to 6,122.16.

Asian equity markets ended mostly in red on Wednesday after oil prices took another tumble overnight and encouraging Japanese and Chinese data weakened the case for additional stimulus, at least in the near-term. Oil prices regained some lost ground in Asian deals on a weaker dollar, helping cap losses across the region. Chinese shares ended marginally higher after country's consumer price inflation rose at an annual rate of 1.5 percent in November, matching forecasts and easing concerns over domestic demand. Producer prices fell for the 45th straight month, but the annual 5.9 percent decline came in line with expectations. However, Japanese shares hit over one-month low after the dollar fell below the 123 yen line overnight. A surprise big jump in core machinery orders helped ease concerns about weakness in capital spending, but dimmed the chances of further policy easing in the near term. Core machinery orders jumped 10.7 percent in October from the previous month, widely beating estimates for a 1.5 percent decline. Hong Kong shares weakened, driven by sluggish global markets and investor caution ahead of an expected US rate hike next week.