Post Session: Quick Review

Indian equity benchmarks ended the last session of the week on optimistic note on fresh buying by funds and retail investors. After trading choppy for most of the session, local bourses got momentum in later part of the session and ended near intraday high levels, as traders turned optimistic with report that the Goods and Services Tax (GST) constitutional amendment bill has been listed for discussion in the Rajya Sabha next week. The GST bill, which has been approved by the Lok Sabha is pending in the Rajya Sabha because of opposition to the bill in its current form by the Congress party. A constitutional amendment bill requires at least 50% attendance and support of two-third of those present and voting in the house.

Traders also took some encouragement with a private poll stating that India's economy will hum along at a solid pace for the remainder of this fiscal year provided structural reforms are passed, while above-target inflation means the Reserve Bank of India will only cut rates once more this year.

Meanwhile, Finance Minister Arun Jaitley has said that India has underlined the need for a judicious mix of fiscal, monetary and structural policies by major economies to deal with the heightened uncertainty on account of Brexit.

Firm opening in European markets too provided much needed support to local bourses with CAC, DAX and FTSE were trading with a gain of around one third of a percent. However, Asian markets ended in red after Bank of Japan chief Haruhiko Kuroda dashed hopes for so-called helicopter money, triggering the yen's steepest rally in a month and weakening the outlook for exporters in Tokyo.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Sentiments remained up-beat with India Meteorological Department’s statement that India has received 1% surplus rainfall since the monsoon season that started in June too aided to investors’ sentiments. Some support came after international credit rating agency Standard & Poor's (S&P) forecasted that India’s economy can grow at about 8% in the next two years. On the sectoral front, the infra sector stocks remained in action with the CII, infra panel urging the government to speed up the recommendations of Kelkar committee report based on interactions with private sector developers, bankers, regulators, private equity funds.

The NSE’s 50-share broadly followed index -- Nifty -- rose by over thirty points to end near the psychological 8,550 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- surged by over ninety points to finish above the psychological 27,800 mark. Broader markets too traded in-line with benchmarks and ended the session with a gain of around a percent.

The market breadth remained in the favour off advances, as there were 1,489 shares on the gaining side against 1,187 shares on the losing side while 194 shares remain unchanged. (Provisional)

The BSE Sensex ended at 27803.24, up by 92.72 points or 0.33% after trading in a range of 27646.21 and 27832.45. There were 19 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.98%, while Small cap index up by 0.81%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 1.41%, Metal up by 1.34%, Industrials up by 1.29%, Capital Goods up by 1.01% and Basic Materials up by 1.01%, while IT down by 0.26% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 3.13%, Power Grid up by 2.92%, HDFC up by 1.88%, Larsen & Toubro up by 1.12% and Cipla up by 1.09%. On the flip side, Bajaj Auto down by 1.80%, SBI down by 1.02%, Hindustan Unilever down by 0.79%, Sun Pharma down by 0.75% and Wipro down by 0.68% were the top losers. (Provisional)

Meanwhile, emerging market economies including India are becoming more vulnerable to global shocks with piling up of external debts. Moody's Investors Service in its latest report has said that India’s external debt as of 2015 at $474 billion has experienced the second largest rise since 2010 representing 16% of the Asia Pacific region's total debt. Besides, external debt to GDP ratio has moved up to 23% from 17% in 2005, although is still one of the lowest globally.

The report said that external debt for emerging economies has almost tripled in the last decade to $8,200 billion in 2015 from $3,000 billion in 2005 and over the last five years it has grown faster than GDP and foreign exchange reserves. As a result, the average emerging markets external debt to GDP ratio increased to 54% in 2015 from its decade-low of 40% in 2008. The average external debt to reserves ratio rose to 353% in 2015 from 251% in 2007.

Moody’s report further stated that Asia-Pacific regional debt has grown the strongest in the last decade, at an average rate of 13.5% a year. Asia-Pacific region’s increase in debt is of $1,400 billion over the last five years and represents almost 60% of the total increase in emerging market debt over that period. Whereas the average external debt to GDP ratio for Asia as a whole has recently rose to 47% in 2015 from 31% in 2008, this was however well below the 78% of emerging Europe, but comparable to the 48% in Latin America and the 43% in the Middle East and Africa region. While adding Moody’s said, the growth in debt was the highest in the Asia Pacific region, with the largest rise in external borrowing in China, India, Indonesia, Taiwan and Malaysia. While China's external debt to GDP ratio is still the second-lowest globally at 13% of GDP in 2015.

The CNX Nifty ended at 8541.20, up by 31.10 points or 0.37% after trading in a range of 8489.80 and 8548.95. There were 31 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 3.29%, Tata Motors - DVR up by 3.26%, Bharti Infratel up by 2.61%, Zee Entertainment up by 2.52% and Power Grid up by 2.37%. On the flip side, Bajaj Auto down by 1.80%, ACC down by 1.56%, Bank of Baroda down by 1.02%, Sun Pharma down by 0.96% and SBI down by 0.95% were the top losers. (Provisional)

European markets were trading in green; Germany’s DAX increased 14.71 points or 0.14% to 10,170.92, France’s CAC gained 16.8 points or 0.38% to 4,393.05 and UK’s FTSE 100 was up by 17.4 points or 0.26% to 6,717.29.

Asian equity markets ended mostly lower on Friday, with the oil price downturn and fading BOJ stimulus expectations weighing on markets. The European Central Bank made no changes to its monetary policy on Thursday and ECB President Mario Draghi gave no hints of future action, disappointing investors hoping for more easing measures in September. Japanese shares led regional declines as Draghi's comments at ECB press conference and Kuroda's remarks tempered stimulus hopes. BOJ Governor Haruhiko Kuroda's remarks in a BBC Radio 4 interview quashed expectations that Japan might be preparing to take radical ‘helicopter money’ economic stimulus steps, under which the central bank would finance government budgets to fight deflation. Kuroda's comments sent the yen to six-week lows against major counterparts, and gave investors a reason to sell shares. Further, Chinese shares retreated after Sheng Songcheng, director of the Survey and Statistics Department at the People's Bank of China, reportedly said that enterprises were caught in a liquidity trap and regulators should focus more on fiscal policy adjustments.