Post Session: Quick Review

Indian markets witnessed rounds of volatility in the very start of the week, with benchmarks making a gap-down start and recovering in the very first hour of trade, surging to their intraday high and slipping back into red, though there was subsequent pullback and markets made a closing near the high points of the day. Traders took encouragement with India's industrial output growing at five-year high rate of 9.8 percent in October, a significant rebound from 3.84 percent growth recorded in September 2015 and a contraction of 2.7 percent in October last year, and also with report that the Foreign Direct Investment (FDI) in services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, surged by 20 percent to $1.46 billion (Rs 9,404 crore) during April-September 2015, as compared to $1.22 billion in the same period last fiscal. Though, there was some nervousness too in early trades ahead of an expected US rate rise later in the week. The rupee weakness too weighed on the sentiments to some extent, the rupee fell an over 2-year low amid risk aversion in emerging market assets on concerns that the Federal Reserve will raise interest rates in the US.

The global cues remained mixed with Asian markets making soft closing; however there was smart rebound in the Chinese market after economic data for November came in better than expected. China’s industrial production growth accelerated to a 5-month high of 6.2 percent in November, likewise, retail sales advanced 11.2 percent annually after rising 11 percent in the prior month. On the same time the Japanese market suffered sharp cuts as the yen strengthened against dollar and commodities stocks receded. The European markets though rebounded from their Friday’s sell-off and traded with good gains in early deals.

Back home, amid the choppiness the Indian markets completely lost their ground towards the end, as selling appeared in some high beta, but buying at lower levels supported the markets once again and the major averages crawled back to post decent gains. Traders took some encouragement with report of India’s wholesale inflation, despite easing a bit remaining in negative territory for the thirteenth  month, coming at -1.99 percent in November compared to -3.81 percent in October. In November last year, the WPI-based inflation was (-) 0.17 per cent. However, wholesale food price inflation in November doubled to 5.20 percent year-on-year as compared to October on account of sharp rise in prices of pulses, onions and vegetables. There was buzz in the banking stocks on report that the government is likely to empower the proposed Bank Board Bureau to select audit firms for public sector banks as part of its larger initiative to strengthen their corporate governance practices.  Meanwhile, RBI Deputy Governor S S Mundra said that the central bank supports mergers among commercial lenders but they have to be focused and strategic. He warned that merging a weak bank with a strong bank might weaken the stronger lender. Steel stocks were in action, after the government imposed anti-dumping duty on stainless steel imports, in a bid to protect the struggling domestic industry from cheap imports. The anti-dumping duty-in the range of 5.3-57.4%-has been levied on imports of cold rolled flat products of stainless steel. JSW Steel was up by over 5%, Tata Steel, Vedanta and SAIL too gained over a percent each. Sugar stocks too traded higher on report that the government plans to increase the cess on sugar by almost Rs.100 per quintal to fund its ambitious programme of paying Rs 4.50 per quintal directly into the bank accounts of growers.

The BSE Sensex ended at 25171.13, up by 126.70 points or 0.51% after trading in a range of 24867.73 and 25194.15. There were 18 stocks in green against 12 stocks in red on the index. (Provisional)

The broader indices were trading in green; the BSE Mid cap index was up by 0.65%, while Small cap index up by 0.45%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.56%, IT up by 0.83%, TECK up by 0.83%, Auto up by 0.53%, Consumer Durables up by 0.45%, while Realty down by 0.25%, Capital Goods down by 0.10%, Oil & Gas down by 0.06% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindalco up by 3.28%, Coal India up by 2.97%, Mahindra & Mahindra up by 2.49%, Maruti Suzuki up by 2.14% and Hindustan Unilever up by 1.94%. On the flip side, Axis Bank down by 1.99%, Tata Motors down by 1.68%, Bharti Airtel down by 1.08%, ONGC down by 0.93% and Larsen & Toubro down by 0.66% were the top losers. (Provisional)

Meanwhile, Foreign Direct Investment (FDI) in services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, has surged by 20 percent to $1.46 billion(Rs 9,404 crore)  during April- September 2015 as compared to $1.22 billion in the same period last fiscal, as per latest data released by Department of Industrial Policy and Promotion (DIPP). The services sector contributes over 60% to the India’s Gross Domestic Product (GDP) and receives high foreign inflows.

The FDI inflows in services sector have been led by the steps taken by the government to improve ease of doing business and attract investments. The government has announced a series of steps like fixing timeliness for approvals to improve the ease of doing business in the country. In banking sector, the government has eased norms and permitted portfolio investors to buy up to 74 percent stake in local private banks with full fungibility. Earlier this year, the government hiked the FDI cap in insurance sector to 49 percent.

Besides, other sectors which have attracted healthy foreign inflows during the April- September period of the current fiscal include computer software and hardware with $3.05 billion, trading $2.3 billion and automobile $1.46 billion. Strong inflows in these sectors pushed the overall FDI into the country by 13 percent to $16.63 billion during April-September 2015. While sectors such as construction development, telecommunication and pharmaceuticals recorded low FDI during the same period.

Growth in foreign investments helps improve the country's balance of payments (BoP) situation and strengthens the rupee. In the next five years, India needs around $1 trillion FDI to overhaul its infrastructure sector such as ports, airports and highways, to boost growth.

The CNX Nifty ended at 7651.50, up by 41.05 points or 0.54% after trading in a range of 7551.05 and 7663.95. There were 35 stocks on gainers side against 15 stocks on the losers side on the index. (Provisional)

The top gainers on Nifty were Adani Ports &Special up by 5.58%, Hindalco up by 3.61%, Coal India up by 2.97%, Zee Entertainment up by 2.79% and Ambuja Cement up by 2.41%. On the flip side, Axis Bank down by 2.31%, Tata Motors down by 1.65%, Bharti Airtel down by 1.16%, ONGC down by 0.84% and Larsen & Toubro down by 0.80% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 was up by 53.3 points or 0.9% to 6,006.08, Germany’s DAX gained 62.59 points or 0.61% to 10,402.65 and France’s CAC was up by 66.27 points or 1.46% to 4,615.83.

Asian equity markets closed mostly lower on Monday, as investors remain focused on the mid-week decision from the US Federal Reserve. Japan markets closed in negative territory as global oil prices extended their decline. However, Chinese markets closed in positive territory due to encouraging industrial output and retail sales data illustrating signs of stabilization in the world's second-largest economy, and the China Foreign Exchange Trade System (CFETS), a division of the country's central bank, said the yuan could remain stable in medium to long term. China's industrial output grew 6.2% year- over-year in November, the highest level since June, and retail sales jumped 11.2% to beat forecasts, offering some respite for markets worried about the economy.