Post Session: Quick Review

Indian markets extended their gains for the third straight session on Wednesday, a crucial day when US Federal Reserve is widely expected to announce a hike in interest rates after its two-day policy-setting meeting ends. Buying was visible across the board barring select auto stocks and some defensive sectors all posted good gains. Traders also drew some comfort with Finance Minister Arun Jaitley making a fresh bid to end the deadlock on GST bill and reaching out to main opposition Congress. He hinted that the government is willing to scrap the proposed 1% additional tax levy under the goods and services tax (GST) regime, but ruled out putting the new tax rate under GST in the Constitution amendment bill itself or setting up a dispute resolution panel. In the early trade there was some cautiousness, as India’s merchandise exports shrank for a 12th straight month in November, falling an annual 24.43 percent. Indian exports during November, 2015 were valued at $ 20014.22 million in Dollar terms, over 24 percent lower than the level of $26485.71 million during November. The trade deficit for November came in at $9.78 billion compared with a provisional $9.77 billion a month ago.

The global cues remained mainly supportive, after a good closing of the US markets overnight, the Asian equities joined a global rebound, halting their six days sell-off, as the Federal Reserve’s decision approached, while the yen weakened and oil resumed decline leading the Japanese market higher. Hang Seng markets rallied the most in a month, as energy producers rebound. The European markets too made a positive start but turned cautious after rallying Tuesday. Though there was report that Euro-area companies are hiring at the fastest pace in more than four years, restricting any fall in the markets.

Back home, markets after regaining momentum in the very first hour of trade continued trading firm for most part of the day. Though there was mild choppiness in the late trade but persistent buying from the investors kept the markets on higher side, with Sensex and Nifty trading above their crucial psychological levels of 25500 and 7650 respectively. Although there was across the board buying but the auto sector especially the diesel vehicle majors suffered some downside after the Supreme Court banned the registration of new diesel luxury cars and SUVs with an engine capacity of over 2000 cc until March 31 in Delhi. The apex court, however, said it would consider a plea for new registrations when Euro-4 diesel engines with improved emission standards are introduced in April next year. On the same time shares of Indraprastha Gas gained around 7 per cent as it is considered as beneficiaries from the government's focus on cleaner fuel to tackle pollution. PSU oil marketing companies surged 1-3 per cent on account of lower-than-expected cut in petrol and diesel prices. Petrol and diesel prices on Tuesday were cut by 50 paise and 46 paise a litre, respectively. Though, the government has raised excise duty on petrol and diesel taking advantage of the fall in global crude prices. The duty on petrol has been raised by 30 paise a litre while that on diesel is up by a steeper Rs 1.17/litre. The other sector that kept buzzing was sugar, which extended their recent gains on rising prices after Lok Sabha passed a Bill seeking to raise the sugar cess ceiling from Rs 25 to Rs 200 per quintal. The Sugar Cess Act enables the central government to levy and collect cess as excise duty for the purpose of the Sugar Development Fund.

The BSE Sensex ended at 25489.79, up by 169.35 points or 0.67% after trading in a range of 25372.47 and 25572.90. There were 23 stocks in green against 7 stocks in red on the index. (Provisional)

The broader indices despite underperforming the benchmarks made a positive close; the BSE Mid cap index was up by 0.34%, while Small cap index gained 0.17%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.75%, Bankex up by 1.31%, PSU up by 1.25%, TECK up by 1.19%, Power up by 1.17%, while Consumer Durables down by 0.85%, FMCG down by 0.60%, Auto down by 0.59% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 4.09%, Bharti Airtel up by 4.04%, ICICI Bank up by 2.52%, Lupin up by 1.95% and BHEL up by 1.44%. On the flip side, Mahindra & Mahindra down by 5.43%, ITC down by 1.12%, Hindalco down by 0.70%, Maruti Suzuki down by 0.38% and Wipro down by 0.38% were the top losers. (Provisional)

Meanwhile, Moody's Investors Service in its latest report titled Sovereigns -- Global: Likely Fed Rate Hike Reflects Strength of US Recovery, But Exposes Some EM Sovereigns to Volatile Capital Flows, has projected the US Federal Reserve to hike rates by 0.25 percent and has said that the likely interest rate hike by the US Federal Reserve this week could pose risks to some emerging markets.

It said that lower global commodity prices and possible volatility in capital flows will pose challenges to some emerging markets, however a combination of reserve buffers and policy vigilance has the capacity to limit the negative sovereign credit impact.  But added that the sovereigns having little policy room to protect growth and buffer themselves from external shocks are likely to be affected the most.

Moody’s said that the most affected large emerging markets and those most at risk going forward have tended to be those such as Brazil, Russia, Turkey and to some extent South Africa, where severe domestic challenges have contributed to exchange rate and financial market instability, and where policy room to buffer external shocks and protect growth is less robust.

The agency though said that “While a Fed rate hike would remove an element of uncertainty for emerging market sovereigns, some will remain at risk to adverse capital flows and investor sentiment. For example, there is a low risk of a disorderly reaction should investors abruptly adjust their expectations for yields.

The CNX Nifty ended at 7751.65, up by 50.75 points or 0.66% after trading in a range of 7715.75 and 7776.60. There were 37 on gainers side against 13 stocks on decliners side on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 4.06%, ONGC up by 3.67%, Cairn India up by 3.48%, Power Grid Corpn. up by 2.97% and Idea Cellular up by 2.69%. On the flip side, Mahindra & Mahindra down by 5.28%, Asian Paints down by 1.55%, ITC down by 1.10%, Hindalco down by 0.82% and PNB down by 0.53% were the top losers. (Provisional)

European markets were trading in green, France’s CAC was up by 21.21 points or 0.46% to 4,635.61, Germany’s DAX gained 30.68 points or 0.29% to 10,481.06 and UK’s FTSE 100 increased by 35.5 points or 0.59% to 6,053.29.

Asian equity markets ended in green on Wednesday, with sentiment helped by broad gains on Wall Street before an expected rise in U.S. interest rates later in the day. Hong Kong stocks rebounded and breaking a nine-session losing streak as energy shares surged. Chinese shares closed higher, with energy stocks gaining ground after China's top planning body, the National Development and Reform Commission, suspended a retail oil price cut that was scheduled for Wednesday and said it would adjust the current pricing mechanism in a bid to combat air pollution, and news that China plans to issue significantly more government bonds next year to aid the economy.