Post Session: Quick Review

Indian markets witnessed a smart turnaround after six days of continuous fall, though the rally was led by the beaten down high beta blue-chip stocks but the broader markets too equally participated. Earlier, though the start of the trade was good but markets remained in a tight range for whole first half of the session, witnessing some volatility too, with India seemingly not likely to get the Goods and Services Tax (GST) any time soon, as for the fourth consecutive day on Thursday, the Congress disrupted Parliament over alleged “politics of vengeance” by the BJP-led government. Minister of State for Finance Jayant Sinha too said that meeting April 1 deadline for GST rollout seems to be 'challenging”. Investors were also seen shifting into countdown mode ahead of next week’s meeting of the Federal Reserve, its last for 2015 and most crucial with an imminent rise in the interest rates. However, value-based buying in blue-chips after recent losses coupled with covering of short positions by speculators gave momentum to the markets and both the benchmarks ended up by around a percent.

On the global front, after the weak closing of the US markets overnight, the Asian markets followed the trend and barring the Korean market all the major indices ended in red, led by the Japanese market which retreated for a third day and lost over a percent after the yen witnessed its biggest jump in three months. Meanwhile, the Bank of Korea left its benchmark rate unchanged for a sixth consecutive month, as board members opted to wait for the Federal Reserve’s anticipated rate increase and assess its effects on the global economy and markets. The European markets too made a soft start, despite the crude oil rising from a six-year low.  

Back home there was sudden spurt in the second half of the trade, taking the benchmark indices to the highest point of the day. The surge was led by the gains in market heavyweight Reliance Industries. Traders also rejoiced the report that indirect tax collection jumped 34.3 percent to Rs 4,38,291 crore during the first eight months of current financial year. Finance minister Arun Jaitley expects to mop up Rs 6.46 lakh crore from indirect taxes in FY16, a growth of around 19% over last year. All the major sectoral indices finally made a green closing led by energy, oil & gas and metals, which traded higher after three days of selloff tailing the strength in global counterparts. Hindalco, Vedanta, NMDC, JSW Steel, Jindal Steel and Tata Steel were among the major gainers, up by 2-4 percent. The real estate stocks kept buzzing after the government approved the Real Estate (Regulation & Development) Bill, 2015. The government approved 20 changes in the Real Estate (Regulation and Development) Bill including a proposal for insurance of land title to protect buyers and developers from the risk of land fraud. DLF, NBCC, Prestige Real Estate and Unitech all moved higher in the range of 1-5%. However, banks again witnessed some selling pressure on report that the Reserve Bank of India (RBI) is keeping a close tab on all SDR cases reported so far and may tighten SDR guidelines to ensure the tool is not being misused by banks to defer or avoid provisioning.

The BSE Sensex ended at 25253.12, up by 217.07 points or 0.87% after trading in a range of 25034.14 and 25289.58. There were 18 stocks in green against 12 stocks in red on the index.

The broader indices too posted good gains; the BSE Mid cap index was up by 0.93%, while Small cap index gained 1.25%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.95%, Metal up by 1.80%, IT up by 1.55%, Realty up by 1.54%, TECK up by 1.41%

The top gainers on the Sensex were Reliance Industries up by 3.51%, Hindalco up by 2.98%, Tata Steel up by 2.80%, Bajaj Auto up by 2.22% and Infosys up by 2.06%. On the flip side, Mahindra & Mahindra down by 1.73%, Lupin down by 1.62%, Tata Motors down by 1.23%, SBI down by 1.00% and BHEL down by 0.77% were the top losers.

Meanwhile, Minister of State for Finance Jayant Sinha has said that meeting April 1 deadline for GST rollout seems to be challenging, amid ongoing political turbulence.

Stating the reason Sinha said “legislative side is complicated because you need two-third majority in the Rajya Sabha, you need 50 per cent of states to pass it and then we have to get GST Bill to be passed. Hence, there is lot of heavy lifting to be done on legislative side which makes this challenging in terms of April 1, 2016”. Sinha further added “We will keep pushing as far as GST is concerned. It will happen sooner rather than later.”

Further he stated that if indeed the legislation gets passed across the Centre and states then there is no reason why the government cannot implement in the year at any point. He also said that the present regime is pro-poor and pro-market.

The Constitutional Amendment Bill to roll out GST is stuck in the Rajya Sabha due to stiff opposition by the Congress party and might be delayed further because of the tough stance taken by the main opposition party over the National Herald case issue.

The CNX Nifty ended at 7682.55, up by 70.05 points or 0.92% after trading in a range of 7610.00 and 7691.95. There were 34 stocks on gainers side against 16 stocks on losers side on the index.

The top gainers on Nifty were Reliance Industries up by 3.62%, Tata Steel up by 3.00%, Hindalco up by 2.71%, BPCL up by 2.63% and HDFC up by 2.56%. On the flip side, Lupin down by 1.69%, Yes Bank down by 1.54%, Mahindra & Mahindra down by 1.50%, Tata Motors down by 1.27% and PNB down by 1.00% were the top losers.

Asian equity markets ended mostly in red on Thursday as investors waited to see what the Federal Reserve will do at next week's crucial meeting. Further, the People's Bank of China allowed the yuan to depreciate against the dollar for a fourth consecutive day, sparking fears of competitive devaluations across Asia. Chinese shares ended lower after the China Securities Regulatory Commission said it would push ahead with a long-awaited reform to let companies and investors have more say in new share offerings as early as May. Japanese shares fell sharply to hit five-week lows amid the sudden strength in the yen hit shares of exporters such as Fanuc and Honda Motor, though trading volume was low. Hong Kong shares weakened, driven by continued weakness in resource shares, as investors remained wary of falling commodity prices and ahead of a likely US interest rate rise next week.