Post Session: Quick Review

Today’s session turned out to be an uninspiring day, traded in a narrow range but ended in green. The uninspiring trade was witnessed a day after the Indian Army said that it had conducted surgical strikes against terrorists across the Line of Control on Wednesday night. The benchmarks started on volatile note in early deals oscillating between positive and negative terrain for most part of the day. Sentiment remained dampened with a report from Labour Bureau stating that unemployment rate in India has shot up to a five-year high of 5 percent in 2015-16, with the figure significantly higher at 8.7 percent for women as compared to 4.0 percent for men. The downside was restricted after Indian rupee opened strong against the US dollar at Interbank Foreign Exchange market on fresh selling on the American currency by bankers and exporters. Bandaru Dattatreya-led labour ministry has decided to increase the equity investment of the Employees Provident Fund Organisation (EPFO) to 10% in 2016-17 as compared to 5% invested in the last financial year, bypassing the need for consensus by the Central Board of Trustees of the EPFO. EPFO is expected to have an incremental corpus of Rs 1.3 lakh crore and 10% of this or Rs 13,000 crore would be pumped into the equity market this financial year. The street is eyeing GST Council meeting where it will finalize the rules regarding registration, refunds and payment and also take a view on exemption of goods under the upcoming Goods and Services Tax (GST) regime. To be chaired by Union Finance Minister Arun Jaitley, the Council will also deliberate on a formula for payment of compensation to states for revenue loss in the aftermath of implementation of the GST.

On the global front, Asian equity markets ended mostly in red, while Kuala Lumpur market was temporarily halted, after the stock exchange’s building management received a bomb threat. The Bank of Japan board was divided over how a policy target shift would support a path toward stable 2% inflation, the summary of opinions expressed at its September 20-21 meeting released. European stocks fell sharply, as ongoing concerns over the European banking sector weighed and investors remained cautious ahead of a report on euro zone inflation due later in the session.

Back home, telecom stocks displayed mixed performance ahead of the upcoming spectrum auction. India’s largest spectrum auction starts on September 31 against a backdrop of battling telecom firms. That the sale of spectrum could lead to more bandwidth for telecom firms to address call drops is almost an afterthought.

The BSE Sensex ended at 27887.24, up by 59.71 points or 0.21% after trading in a range of 27716.78 and 27955.21. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 2.09%, while Small cap index was up by 2.23%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.15%, Oil & Gas up by 1.89%, Auto up by 1.48%, PSU up by 1.44% and Metal up by 1.38%, while FMCG down by 0.04% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 3.09%, Mahindra & Mahindra up by 2.77%, ONGC up by 2.31%, Tata Steel up by 2.22% and Power Grid up by 1.96%. (Provisional)

On the flip side, Cipla down by 3.64%, ITC down by 1.45%, Coal India down by 1.37%, Dr. Reddy’s Lab down by 1.09% and Bharti Airtel down by 1.03% were the top losers. (Provisional)

Meanwhile, the latest report by Federation of Indian Chambers of Commerce and Industry (FICCI)-Centrum, has said that there is a potential to unlock $ 5-7 billion from assets in roads and power sectors in the next few years, after the government and market regulator SEBI eased norms for setting up of infrastructure investment trusts (InvITs).

The report said that in the next couple of years, InvITs are slated to pick up and have the potential of unlocking huge assets from primarily in the roads, transmission and renewable segments, adding that companies with a strong portfolio, steady revenue stream and a resilient track record can be potential candidates for this type of investment.

However, the report also noted that issuers may face challenge in obtaining a premium valuation for their assets which would depend upon a number of factors like sponsor credibility and experience, quality and revenue generation ability of underlying assets and government policies. Moreover, InvITs would be competing with similar domestic products such as alternate investment funds (AIF) which offer more operational flexibility and allow investors to invest in all forms of infra assets.
SEBI recently amended the regulations for InvITs and real estate investment trusts (REITs) to facilitate their growth. InvITs and REITs can now invest in a two-level special purpose vehicle (SPV) structure through the holding company. The holding company in both vehicles would have to distribute 100 per cent cash flows realised from the underlying SPVs and at least 90 per cent of the remaining cash flows. SEBI in August 2014 had introduced InvITs, an investment vehicle that would enable promoters to monetize completed assets.

The CNX Nifty ended at 8620.95, up by 29.70 points or 0.35% after trading in a range of 8555.20 and 8637.15. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Aurobindo Pharma up by 3.85%, Bank of Baroda up by 3.58%, Grasim Industries up by 3.05%, Mahindra & Mahindra up by 2.90% and GAIL India up by 2.90%. (Provisional)

On the flip side, Cipla down by 3.84%, Tech Mahindra down by 1.52%, Coal India down by 1.42%, ITC down by 1.40% and Ambuja Cement down by 1.10% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 61.39 points or 0.89% to 6,858.03, Germany’s DAX decreased 106.63 points or 1.02% to 10,298.91 and France’s CAC decreased 57.93 points or 1.3% to 4,385.91.

Asian equity markets ended mostly lower on Friday on growing worries about the European banking system that hit financial shares and as oil prices inched back from near-one month highs on scepticism over OPEC's new plan to curb output. Japanese shares tumbled, tracking negative overnight cues from Wall Street as investors fretted over regional lenders' exposure to Deutsche Bank. On Thursday, Deutsche Bank shares slumped to a record low after a report that trading clients had withdrawn excess cash and positions held in the largest German lender. But the Japanese yen, on the other hand, are set to be the weakest one on BoJ expectations. Meanwhile, Chinese shares ended higher after a private gauge of Chinese factory activity pointed to a modest expansion in September, adding to recent signs of stability.