Post Session: Quick Review

Indian equity benchmarks displayed a winning performance for fourth consecutive session. The benchmarks started the trade in green with DIPP Secretary Ramesh Abhishek’s statement that implementation of the goods and services tax (GST) is bound to be a game changer for India’s manufacturing sector and will enhance ease of doing business in the country. Indian rupee opened higher against the US dollar at the Interbank Foreign Exchange (Forex) market as bankers and exporters opted to sell the American currency. Some buying was also witnessed with reports that foreign investors have pumped in Rs 5,790 crore into the country’s capital markets within a fortnight this month, driven by global and domestic factors. Foreign portfolio investors (FPIs) bought shares worth a net Rs 660.59 crore on Friday, as per provisional data released by the stock exchanges. Though profit booking crept in late afternoon deal, buying emerged after global rating agency Moody’s stated India’s banking system is moving past the worst of its asset quality down cycle. This supports stable outlook for the sector over the next 12-18 months. However, all eyes will be now on the central banks this week, with the US Federal Reserve’s two-day meet starting on Tuesday and the Bank of Japan meeting on the same day.

On the global front, Asian markets ended mostly higher as fears receded that the US Federal Reserve would raise interest rates this week. A report from the Bank for International Settlements (BIS) highlighted that excessive credit growth in China is signaling an increasing risk of a banking crisis in the next three years. An early warning of financial overheating - the credit-to-GDP gap - hit 30.1 in China in the first quarter of this year. UK stocks rebounded marking a slight rebound after two straight weeks of losses, as gains in banking and energy company shares lifted the region’s stock markets.

Back home, buying activity was witnessed in metal stocks as Union Steel Minister Chaudhary Birendra Singh has claimed that the country will be ranked after Japan and America in steel production in December this year as a result of the Prime Minister’s various initiatives like Skill India, Startup India and Make in India. Mixed performance was displayed in pharma stocks with government slashing prices of 10 more drugs, while bringing eight new medicines, including paracetamol, under price control for the first time in its bid to cap cost of over 800 plus formulations to make them affordable.

The BSE Sensex ended at 28646.97, up by 47.94 points or 0.17% after trading in a range of 28552.55 and 28714.77. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.67%, while Small cap index was up by 0.49%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.58%, Metal up by 1.26%, PSU up by 0.79%, Power up by 0.68% and Oil & Gas up by 0.67%, while FMCG down by 0.29% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 2.07%, ICICI Bank up by 1.50%, Adani Ports & Special Economic Zone up by 1.49%, Power Grid up by 1.31% and Coal India up by 1.14%. (Provisional)

On the flip side, Maruti Suzuki down by 1.37%, Bajaj Auto down by 1.25%, Axis Bank down by 1.06%, Hero MotoCorp down by 1.05% and HDFC Bank down by 0.62% were the top losers. (Provisional)

Meanwhile, government tasting the success of the Direct Benefit Transfer (DBT) scheme, is planning to almost double the number of schemes under DBT to 147 by next March from 74 currently. Government has saved Rs 14,872 crore by offering subsidy on cooking gas (LPG) directly to consumers and DBT is now being extended to kerosene in over two dozen districts on pilot basis to save a part of the Rs 24,000 crore subsidy outgo. It has also launched pilots for paying subsidy on food and fertiliser directly via bank accounts of beneficiaries.

Earlier, the Expenditure Management Commission (EMC), headed by former RBI Governor Bimal Jalan, had in its report, suggested rationalising and merging centrally-sponsored schemes and extending DBT to all subsidies and welfare payments. It had favoured expenditure reform and rationalisation rather than reduction.

Finance Secretary Ashok Lavasa has said the government has implemented 30 per cent of the recommendations of the Expenditure Management Commission (EMC) that was set up to suggest reforms to overhaul the subsidy regime and lower fiscal deficit. Lavasa said that it is the food subsidy where we have been able to rationalise and bring it down. Similarly, in case of fertiliser subsidy, non urea subsidy there has been a reduction. Pilot is going on in kerosene and fertiliser. With regard to kerosene, he said more and more states are gradually turning to be kerosene free and are gradually shifting to LPG. Lavasa stated that through DBT, government hopes to achieve accurate targeting of beneficiaries, weed out duplication, curb leakages and bring efficiency in delivery process to help control expenditure and bring greater accountability and transparency.

The CNX Nifty ended at 8809.05, up by 29.20 points or 0.33% after trading in a range of 8774.20 and 8824.30. There were 36 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indusind Bank up by 3.13%, Aurobindo Pharma up by 2.59%, Tata Power up by 2.39%, TCS up by 2.25% and Ambuja Cement up by 2.17%. (Provisional)

On the flip side, Maruti Suzuki down by 1.37%, Bajaj Auto down by 1.23%, Axis Bank down by 1.19%, Hero MotoCorp down by 0.90% and ITC down by 0.65% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 89 points or 1.33% to 6,799.28, Germany’s DAX increased 74.58 points or 0.73% to 10,350.75 and France’s CAC increased 59.14 points or 1.37% to 4,391.59.

The Asian markets ended mostly higher on Monday, on hopes of BOJ easing, positive home price data from China and rallying oil prices helped investors shrug off news related to possible terrorist attacks in the United States. The US Federal Open Market Committee's two-day policy meeting ends on Wednesday, with investors likely to focus on the accompanying statement for clues about the future path for interest rates. The Bank of Japan will also wrap up its two-day policy meeting on Wednesday amid speculation it will probably cut the rate on some bank reserves further below zero. Chinese shares ended higher as investors returning from a long holiday drew optimism from surveys showing improving business confidence. An official survey showed that Average new home prices in China's 70 major cities hit a six-month high in August defying government's efforts to rein in soaring home values and deter speculative purchases. Further, Hong Kong shares rose sharply, with property stocks pacing gainers on expectations of continuous money flows from China into Hong Kong stock markets. Japanese markets were closed for a public holiday.