Post Session: Quick Review

Indian equity benchmarks indices displayed a boisterous feat whereby bulls went on rampage and frontline indices ended the session near intraday high. Indian equity benchmarks traded on firm note on reports that growth in India’s services industry accelerated to its fastest pace in more than 3-1/2 years in August, driven by a surge in domestic and foreign demand. The Nikkei/Markit Services Purchasing Managers’ Index jumped to 54.7 in August, it’s highest since January 2013, from 51.9 in July. Also there were reports that Prime Minister’s Office (PMO) will soon clear projects worth Rs 20 lakh crore, stating that the Project Monitoring Group (PMG) has already cleared 276 projects worth 10 lakh crore which were stalled due to various reasons including roads, environment, coal and power among others. Niti Aayog has instructed concerned Ministries and Departments regarding awarding of public contracts and projects, a move that will help revive the construction sector. Some additional support also came after Indian rupee opened firm against the US dollar at the Interbank foreign exchange (Forex) market following increased selling of American currency by banks and exporters. The Indian rupee hit a four-month high against the US dollar after lower-than-expected US payroll data reduced fears of a rate hike by the US Federal Reserve. Gains were also boosted due to continued buying interest from foreign institutional investors (FIIs) in local equity markets. Besides, foreign investors have been buying into Indian shares apart from those in other emerging markets this year, bringing the total net investments in the year to $6.05 billion. Meanwhile, the Group of 20 major economies (G20) wrapped up their annual summit, held in Hangzhou, China, on September 05, 2016 with a stronger commitment to coordinate policies to support growth and promote trade liberalization.

On the global front, Asian shares gained as prospects for a US interest-rate increase this month remained subdued. Low US interest rates could support demand for emerging-market assets. The yen kept some distance from a one-month low against the dollar after Bank of Japan Governor Haruhiko Kuroda held back from signaling further easing, acknowledging instead the costs of the BOJ’s aggressive stimulus. European stocks were mostly higher, as a rebound in oil prices boosted energy-related stocks and as markets continued to digest Friday’s disappointing US jobs data.

Back home, some buying activity was witnessed in steel stocks, on report that the government is unlikely to further extend the minimum import price (MIP) on certain steel products beyond October 4 as these items could be covered under anti-dumping duty.

The BSE Sensex ended at 28993.16, up by 461.05 points or 1.62% after trading in a range of 28631.27 and 29013.40. There were 25 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.91%, while Small cap index was up by 0.92%. (Provisional)

The gaining sectoral indices on the BSE were Bankex up by 3.13%, Consumer Durables up by 3.08%, Auto up by 2.77%, Power up by 1.43% and Realty up by 1.27%. (Provisional)

The top gainers on the Sensex were Tata Motors up by 6.94%, Axis Bank up by 5.91%, ICICI Bank up by 3.98%, Asian Paints up by 3.36% and Tata Steel up by 3.16%. (Provisional)

On the flip side, TCS down by 1.25%, Coal India down by 1.05%, Sun Pharma down by 0.19%, Wipro down by 0.18% and ONGC down by 0.02% were the top losers. (Provisional)

Meanwhile, Indian states are likely to receive Rs 24,000 crore bounty or more from the government in form of the excise duty on oil products current year, which is set to jump by around Rs 60,000 crore. Under the 14th Finance Commission, the government has to give 42 percent of the incremental excise mop-up on oil products to states from 2015 to 2020 fiscals.

Excise collections on oil products may expand by incremental Rs 55,000-60,000 crore in the current fiscal year and 42 per cent of these incremental collections would devolve to the states. Excise on oil products has been the biggest contributor to this form of tax kitty of the Centre, as it has been increasing the excise duty on oil products since mid 2014 after the crash in crude prices, While it contributed as much as 63 per cent of the total excise mop-up in the last fiscal year, up from 46 per cent in the previous fiscal year, it is going to jump by around Rs 60,000 crore this year to Rs 1,78,600 crore.

The contribution of oil products to the overall excise duty levied by the Centre has increased significantly from 46 per cent in 2013-14 to around 63 per cent in 2015-16, following a high growth rate of excise on fuels in the recent years. While the Centre mopped up Rs 79,400 crore from oil products in the FY 2014-15, 23 per cent of it or Rs 17,900 crore were devolved to the states in that year.

The CNX Nifty ended at 8944.20, up by 134.55 points or 1.53% after trading in a range of 8848.45 and 8950.85. There were 41 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 6.88%, Axis Bank up by 6.36%, Tata Motors - DVR up by 5.67%, Yes Bank up by 4.30% and ICICI Bank up by 4.25%. (Provisional)

On the flip side, TCS down by 1.20%, Coal India down by 1.17%, Tata Power down by 0.63%, Ultratech Cement down by 0.49% and Sun Pharma down by 0.27% were the top losers. (Provisional)

The European markets were trading mostly in green; France’s CAC increased 8.68 points or 0.19% to 4,549.76 and Germany’s DAX increased 38.79 points or 0.36% to 10,711.01, while UK’s FTSE 100 decreased 12.17 points or 0.18% to 6,867.25.

The Asian markets ended in green on Tuesday, as oil prices rallied and the Reserve Bank of Australia kept rates on hold, as widely expected. The Reverse Bank of Australia (RBA) in a statement cited reasons such as continued growth, low inflation and mixed labor market data as contributing factors to hold interest rates steady. Chinese shares ended higher, led by gains in consumer and industrial stocks. Further, Japanese shares rose as the yen weakened against the dollar after rising on Monday following a speech from BOJ Governor Haruhiko Kuroda.