Post Session: Quick Review

Today’s session turned out to be a disastrous day of trade for Indian equity markets. The frontline gauges ended the session with losses of around one and quarter percent. The benchmarks made a sluggish start and traded in red in early deals on account of selling in frontline blue chip counters tracking regional counterparts. After a big gap-up opening last week on comments from the US Fed, the benchmarks seemed to have lost momentum and traders have turned cautious on the market. Some weakness crept in after Indian rupee weakened against the US dollar at the Interbank Foreign on account of increased demand for the American currency by bankers and importers amid lower opening at domestic markets. Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 299.98 crore on Friday as per provisional data released by the stock exchanges. The street failed to draw some comfort with Reserve Bank of India’s Governor, Urjit Patel downplaying the risk of inflation and harping on the focus on growth. Patel reportedly said that the GST regime would not harden inflation and the growth objective will remain part of the newly constituted MPC’s mandate. Investors’ attention has now turned from central banks to American politics ahead of the first US presidential debate. Members of the Organisation of the Petroleum Exporting Countries (OPEC) will meet on the sidelines of the International Energy Forum in Algeria from September 26 to 28, where they will discuss a possible output-limiting deal. Meanwhile, investors will now continue to track the progress of monsoon rains. The India Meteorological Department (IMD) in its weekly monsoon update issued on September 22, 2016 stated that for the country as a whole, cumulative rainfall during this year’s monsoon has so far up to September 21, 2016 been 5% below long period average (LPA).

On the global front,  Asian markets ended lower, as investors’ awaited Monday evening’s US presidential debate between Donald Trump and Hillary Clinton, which will take place early on Tuesday in Asian time zones. The first of three debates ahead of the November election could set US television audience records. European stocks slid, with a selloff in oil and gas shares and in German lender Deutsche Bank AG pushing the market’s benchmark toward its worst performance in almost three months.

The BSE Sensex ended at 28294.59, down by 373.63 points or 1.30% after trading in a range of 28272.03 and 28630.92. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)
The broader indices ended in red; the BSE Mid cap index was down by 0.58%, while Small cap index was down by 0.54%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 0.32% and Oil & Gas up by 0.09% while, Realty down by 1.91%, Auto down by 1.79%, Bankex down by 1.57%, Power down by 1.42% and Capital Goods down by 1.38% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 1.29%, Reliance Industries up by 0.55%, Lupin up by 0.42%, TCS up by 0.32% and Dr. Reddy’s Lab up by 0.12%. (Provisional)

On the flip side, ONGC down by 4.11%, ICICI Bank down by 3.24%, Tata Motors down by 3.23%, NTPC down by 3.06% and GAIL India down by 2.72% were the top losers. (Provisional)

Meanwhile, Reserve Bank of India (RBI) Governor, Urjit Patel has downplayed the risk of inflation and harped on the focus on growth. Patel said that the goods and services tax (GST) regime would not harden inflation and the growth objective will remain part of the newly constituted Monetary Policy Committee’s (MPC's) mandate.

The governor in a closed-door meeting with group of economists said there will be many items whose prices would fall and therefore help in at least partially offsetting the increase in prices of other items of consumption, hence he is of the view that the GST regime would not harden inflation as is widely perceived.

It was reported that Patel informally discussed with the group of economists whether the weight (which could raise CPI following higher outgo on public sector salary and HRA) should be cut. He expressed his view that the weight assigned to public sector housing and the rent in the calculation of the consumer price index (CPI) should be lowered.

The newly constituted six-member Monetary Policy Committee (MPC) is likely to maintain a dovish and accommodative stance on interest rates and liquidity, as Patel said that keeping in mind the growth objective was also part of MPC's mandate. Earlier interest rates were decided solely by the RBI governor but now under the new norms, the six-member MPC headed by the RBI governor and with members nominated by both the Centre and the central bank will take decisions on interest rates.

The CNX Nifty ended at 8722.30, down by 109.25 points or 1.24% after trading in a range of 8715.10 and 8809.55. There were 8 stocks advancing against 43 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 3.03%, Coal India up by 1.71%, Zee Entertainment up by 1.34%, Lupin up by 0.51% and Reliance Industries up by 0.32%. (Provisional)

On the flip side, ONGC down by 4.43%, Tata Motors down by 3.26%, NTPC down by 3.06%, ICICI Bank down by 3.04% and Idea Cellular down by 2.85% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 84.74 points or 1.23% to 6,824.69, Germany’s DAX decreased 167.65 points or 1.58% to 10,459.32 and France’s CAC decreased 80.75 points or 1.8% to 4,407.94.

The Asian markets ended lower on Monday after US shares fell in last session and as investors turned their attention to American politics ahead of tonight's first US presidential debate. Many traders were cautious ahead of the week-long National Day holiday starting on October 1. Chinese shares fell, with property stocks taking a fresh beating after Nanjing, capital of East China's Jiangsu province, adopted new rules restricting home purchases. Further, Japanese shares fell for a second consecutive session, as the dollar wobbled against the yen and euro ahead of this week's speeches by the heads of central banks in the US, Europe and Japan. However, oil prices recovered some lost ground in Asian deals, after Algeria's energy minister said the day before that all options were possible for an oil output cut or freeze at this week's informal meeting of OPEC producers.