Post Session: Quick Review

Indian equity benchmarks traded on choppy note oscillating between positive and negative terrain in a narrow range. The final hour of buying however helped benchmarks end the session with modest gains near the highest point of the day. The benchmarks entered into red terrain in early deals, after making firm start, as investors maintained a cautious approach as September rainfall fell 15 percent below average, which could mean the season will end up in deficit. This year’s below average rains, after two straight years of drought, could cut yields of summer-sown crops that are currently ripening for harvesting and also hit the planting of winter-sown crops like wheat and chickpeas. Talks of a rupee devaluation have pushed the currency to a two-week low despite the finance ministry denying that it had any discussions on the currency’s devaluation and commerce minister Nirmala Sitharaman tweeting that she did not tell a reporter that the government was discussing a devaluation. However, the downside was limited on reports that Prime Minister Narendra Modi has reviewed preparations for roll out of the new Goods and Services Tax (GST) regime, possibly from April 1 next year, with Finance Minister Arun Jaitley and his team making a presentation on the milestones achieved and the road ahead. The presentation detailed the steps to follow including the timetable to get the supporting legislations approved.

On the global front, Asian markets ended mostly lower; as investors grapple with the apparently diminishing ability of major central banks to stimulate growth, while a tumble in crude oil prices added to the risk-averse mood. While expectations over a Federal Reserve rate hike at next week’s meeting have faded, investors are bracing for a tightening before year-end. European shares edged higher, looking to break off from a week-long losing run. Market participants looked ahead to the Bank of England’s (BoE) policy decision after a slew of economic data showed the British economy holding up better-than-forecast with the monetary authority largely expected to stand pat on interest rates on Wednesday, while maintaining a dovish bias.

Back home, mixed performance was displayed in infra sector stocks, on report that government may soon come up with an ambitious Rs 3lakh crore Economic Corridor project to develop 35,000 km of highways for faster movement of freight.

The BSE Sensex ended at 28449.47, up by 77.24 points or 0.27% after trading in a range of 28311.11 and 28451.25. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.25%, while Small cap index was up by 0.22%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 0.74%, Capital Goods up by 0.22% and TECK up by 0.09%, while Consumer Durables down by 1.18%, Power down by 0.82%, PSU down by 0.62%, Bankex down by 0.47% and Auto down by 0.33% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 1.60%, Maruti Suzuki up by 1.56%, HDFC up by 1.54%, Cipla up by 1.47% and ITC up by 1.27%. (Provisional)

On the flip side, Power Grid Corporation down by 2.18%, Axis Bank down by 2.04%, Hero MotoCorp down by 1.94%, Tata Steel down by 1.74% and Bajaj Auto down by 1.56% were the top losers. (Provisional)

Meanwhile, domestic rating agency, ICRA in its latest report has said that Ujwal Discom Assurance Yojana (UDAY) scheme, which was launched by the centre to improve performances of the state power distribution companies, will benefit power distribution companies (Discom) significantly in the near to medium-term. However, it also cautioned that strict focus on improving efficiency, timeliness and tariff hike adequacy will be critical for their financial turnaround in the long-run.
Rating agency stated that Discoms will benefit significantly with different measures taken by the government under UDAY scheme like lower interest costs arising out of de-leveraging, and reduction in cost of power procurement arising out of improved domestic coal availability and flexible utilisation of domestic coal linkage and e-auction process for short-term power, as these would reduce cost of power purchase.

The report also pointed that state electricity regulatory commissions (SERCs) in only 20 out of 29 states have issued tariff orders for FY2017 so far, indicating moderate progress in terms of issuance of tariff orders for the year. Till now 16 states and union territories have signed memorandum of understanding for participating in UDAY. De-leveraging and refinancing under the scheme is expected to improve liquidity and profitability profile of Discom's in the near term.
UDAY was launched by the centre to improve performances of the state power distribution companies. ICRA has said that improved domestic coal availability along with recent policy measures by the government such as flexible utilisation of domestic coal linkage and e-auction process for short term power remain favourable for discoms in terms of likely reduction in cost of power purchase.

The CNX Nifty ended at 8748.60, up by 22.00 points or 0.25% after trading in a range of 8704.35 and 8751.95. There were 27 stocks advancing against 24 stocks declining on the index. (Provisional)

The top gainers on Nifty were BHEL up by 2.66%, Zee Entertainment up by 2.33%, Reliance Industries up by 1.91%, Maruti Suzuki up by 1.63% and ITC up by 1.59%. (Provisional)

On the flip side, Yes Bank down by 2.27%, Tata Steel down by 2.03%, Hero MotoCorp down by 1.97%, Axis Bank down by 1.96% and Power Grid Corporation down by 1.93% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 20.21 points or 0.3% to 6,693.52, Germany’s DAX increased 33.58 points or 0.32% to 10,411.98 and France’s CAC increased 2.07 points or 0.05% to 4,372.33.

The Asian markets ended mostly in red on Thursday as a mixed lead from Wall Street and the oil price downturn kept investors nervous, heading into key central bank meetings. The Bank of England and the US Federal Reserve are expected to keep rates on hold, while economists remain divided over what the Bank of Japan will do at the end of its two-day policy meeting next week. Japanese shares led regional losses to close at their lowest levels in nearly three weeks, as the yen held strong against its peers on skepticism over BOJ's further easing at next week’s meeting. The markets in China, South Korea and Taiwan were closed for public holidays.