Post Session: Quick Review

Boisterous benchmarks showcased an enthusiastic performance and rallied around one percentage points amid strong global cues. The benchmarks made a gap-up opening after the US Federal Reserve left interest rate unchanged on expected lines and signaled gradual hike in near future. The rupee strengthened against the dollar in early trade at the Interbank Foreign Exchange on selling of the US currency by exporters and banks amid foreign fund inflows. Some additional support came with the report that country’s Current Account Deficit (CAD) narrowed to $0.3 billion, or 0.1 percent of GDP, in the first quarter of 2016-17, significantly lower than $6.1 billion or 1.2 percent of GDP in Q1 of 2015-16 on account of lower trade gap. Also, a private report stated that rural demand is likely to turn up in the coming months largely driven by better rains and Kharif farm income is expected to jump 12.3 percent this year. Investors took note of Finance Minister Arun Jaitley statement that the National Investment and Infrastructure Fund (NIIF) will start funding activities in the next few days as it has got commitments from several sovereign wealth funds. The government had set up a Rs 40,000-crore fund in December last year as an investment vehicle for funding commercially viable green field, brown field and stalled projects.  Meanwhile, the GST Council, which will decide on tax rates, exempted goods and threshold, will meet for the first time today as it races against time to iron out issues between Centre and states for rolling out the new indirect tax regime from April 1, 2017. Separately, questioning the methodology adopted by Moody’s, Finance Ministry enlightened that the global agency has ignored reforms initiated by the government and it should not wait till infinity for them to take root before upgrading the country’s sovereign rating.

On the global front, Asian markets ended higher, buoyed by the US Federal Reserve’s decision not to raise interest rates and by rising commodity prices. According to the OECD’s latest Interim Economic Outlook, weak trade growth and financial distortions are exacerbating slow global economic growth. China is expected to continue facing challenges as it rebalances its economy from manufacturing-led demand toward consumption and services. Chinese growth is forecast at 6.5 percent in 2016 and 6.2 percent in 2017. European stock markets posted firm gains with mining and oil firms being amongst the biggest gainers, getting a boost from a weaker dollar in the aftermath of the Fed decision.

Back home, logistics stocks were trading with traction on reports that Commerce Ministry is working on a proposal to enhance the logistics competitiveness of exporters and is discussing it with the railways as well as port authorities. As part of the proposal, the department of commerce is suggesting to the Railways Ministry that it needs to clearly distinguish between consignments for exports, imports and general in terms of the freight rates.

The BSE Sensex ended at 28754.99, up by 247.57 points or 0.87% after trading in a range of 28693.07 and 28871.92. There were 23 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.40%, while Small cap index was up by 0.95%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 1.38%, Bankex up by 1.32%, Capital Goods up by 1.31%, Power up by 1.31% and Oil & Gas up by 1.30%, while IT down by 0.34% and TECK down by 0.12% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 2.47%, Adani Ports & Special Economic Zone up by 2.24%, Hero MotoCorp up by 2.02%, Tata Steel up by 1.95% and ICICI Bank up by 1.89%. (Provisional)

On the flip side, Lupin down by 1.32%, Axis Bank down by 1.30%, Coal India down by 1.11%, TCS down by 1.06% and Wipro down by 0.47% were the top losers. (Provisional)

Meanwhile, representatives from global credit rating agency Moody's in their scheduled meet with Economic Affairs Secretary and other finance ministry officials expressed concern over the state of bad loans in the banking sector. Government on its part citing reforms and steps taken towards ease of doing business, pitched for a rating upgrade with Moody's.

The ministry impressed upon the global rating agency about the government's resolve to contain fiscal deficit at 3.5 per cent of Gross Domestic Product (GDP) in the current fiscal. It highlighted the passage in Parliament last month of the long pending Goods and Services Tax (GST) - billed as the biggest tax reform since Independence. With relaxation of thresholds for Foreign Direct Investment (FDI) and inflation targeting monetary policy, the finance ministry wants the US-based agency to upgrade the country's rating, lifting its credit profile.

However, in the meeting with Economic Affairs Secretary Shaktikanta Das and ministry, Moody's said that a rating upgrade could be a reality when the benefits of reforms could be felt on the ground and the country's banking sector stabilizes.

India's sovereign rating by Moody's stands at 'Baa3', the lowest investment grade just a notch above 'junk' status. In April last year, Moody's had changed India's rating outlook to 'positive' from 'stable' citing reform momentum and had said that it could consider India for an upgrade in next 12-18 months. Recently, it said that it could upgrade India's rating in 1-2 years if it is convinced that reforms are 'tangible'.

The CNX Nifty ended at 8861.75, up by 84.60 points or 0.96% after trading in a range of 8837.80 and 8893.35. There were 40 stocks advancing against 11 stocks declining on the index. (Provisional)

The top gainers on Nifty were Aurobindo Pharma up by 5.95%, Hindalco up by 3.61%, Bank of Baroda up by 3.19%, IndusInd Bank up by 2.78% and SBI up by 2.65%. (Provisional)

On the flip side, Idea Cellular down by 1.42%, Tech Mahindra down by 1.41%, TCS down by 1.38%, Axis Bank down by 1.32% and Lupin down by 1.27% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 76.72 points or 1.12% to 6,911.49, Germany’s DAX increased 196.3 points or 1.88% to 10,632.79 and France’s CAC increased 80.18 points or 1.82% to 4,489.73.

The Asian markets ended mostly higher on Thursday, as oil prices extended overnight gains and the Fed's cautious tone about future rate hike suggested that a rate increase is unlikely at the Fed's next meeting in November, concluding six days before the presidential election. Fed Chair Janet Yellen offered an upbeat assessment of the economic outlook, but noted that a cautious approach in paring back monetary policy support is appropriate given that short-term interest rates are still near zero. Chinese shares ended higher, led by property developers, after Sunac China Holdings said its subsidiary would buy a 17 percent stake in smaller rival Jinke Property. Japanese markets were closed for the Autumnal Equinox holiday.