Post Session: Quick Review

Wednesday turned out to be a disappointing session of trade for Indian equity benchmarks where frontline gauges ended the session with a cut of around half a percent, as traders opted to book profit after three days of continuous rally amid weak global cues. Markets turned choppy after a gap-up opening, as sentiments remained dampened with World Bank research predicting that the proportion of jobs threatened in India by automation is 69 per cent and in China it is 77 per cent. Sentiments also weighed down with the India Meteorological Department’s statement that spillover of monsoon into October has led to crop damage in many areas. Traders failed to get any sense of relief with International Monetary Fund’s (IMF) report where it raised India’s growth forecast a tad, citing the resilience of its economy and robust growth momentum. The IMF now expects the economy to expand 7.6% in 2016-17, up from its earlier projection of 7.4%.

Selling got extended in last leg of trade with investors turning cautious on report that India’s service sector growth slowed down in September as pace of new orders moderated amid competitive pressure and unfavourable weather conditions. The seasonally adjusted Nikkei India Services Business Activity Index was down to 52.0 in September from August’s 43-month high of 54.7, the latest reading pointed to a slower rate of expansion that was moderate overall.

Weak start in European counter too dampened sentiments with CAC, DAX and FTSE trading with a cut of over half a percent on concerns that European Central Bank might reduce the pace of bond buying before its purchase programme ends, hitting utilities and real estate stocks hardest. Asian markets retreated and ended the session mostly in red on Wednesday.

Closer home, weakness in Indian rupee too dampened sentiments. The rupee depreciated by 8 paise to trade at 66.54 against the US dollar at the time of equity markets closing. The rate sensitivity that led the initial rally after lenders promised to swiftly pass on the 0.25 per cent rate cut effected by RBI to borrowers, a move that would lower interest rates on home, auto and corporate loans, ended in red on profit booking. In non sectoral gauge, the steel stocks ended higher after the government in order to protect domestic industries from cheap imports, again extended the minimum import price (MIP) on 66 steel products for a period of two months. Shares of tyre stocks too remained on buyers’ radar after the natural rubber prices hit six-month low. Paints stocks too remained in focus on expectation of healthy earnings growth for the quarter ended September 2016 (Q2FY17).

The NSE’s 50-share broadly followed index Nifty declined by around thirty points to end below the psychological 8,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by over one hundred and ten points to finish below its psychological 28,300 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of over half a percent.

The market breadth remained in favor of advances, as there were 1,735 shares on the gaining side against 1,145 shares on the losing side while 124 shares remain unchanged. (Provisional)

The BSE Sensex ended at 28220.98, down by 113.57 points or 0.40% after trading in a range of 28188.90 and 28477.65. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader ended in green; the BSE Mid cap index was up by 0.50%, while Small cap index up by 0.62%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.69%, Metal up by 0.69%, Industrials up by 0.62%, Telecom up by 0.45% and Auto up by 0.35%, while Bankex down by 0.78%, IT down by 0.56%, TECK down by 0.38%, Oil & Gas down by 0.33% and Consumer Durables down by 0.22% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 1.59%, Asian Paints up by 1.39%, Hindustan Unilever up by 1.38%, NTPC up by 0.63% and SBI up by 0.50%. On the flip side, ONGC down by 2.56%, Axis Bank down by 2.03%, Bajaj Auto down by 1.28%, Hero MotoCorp down by 1.17% and Mahindra & Mahindra down by 1.16% were the top losers. (Provisional)

Meanwhile, India’s biggest auction of telecom spectrum, which started on Saturday with seven operators in fray for a total of 2,354.55 MHz across seven bands, received bids of Rs 59,981 crore at the end of third day of bidding. This is Rs 3,100 crore more than what it clocked on the second day i.e. October 3 and Rs 6450 crore higher from the first day of spectrum auction.

Reportedly bids worth Rs 59,981 crore come for around 750 Mhz of spectrum at the end of 17th round. Even after three days of auction there was no demand yet for frequencies in the expensive 700 MHz bands, while bidding interest continued largely around 1800 MHz and 2300 MHz that can be used by operators to provide 4G services. The 900 MHz spectrum also didn’t receive any bid till now.

The second day of the mega telecom spectrum auctions fetched Rs 56,792 crore, up Rs 3,231 crore as compared to Rs 53,531 crore on the first day. The bidding had closed with a cumulative 11 rounds. The total bid value is still well short of the Rs 1.09 lakh crore netted by the government in 2015. The auction raised Rs 61,162 crore in 2014.

The finance ministry in the Budget pegged the revenue target at Rs 98,995 crore from the telecom space. This included Rs 64,000 crore from the auction. The premium 700 MHz band alone has the potential to fetch bids worth over Rs 4 lakh crore if the entire spectrum in this band is sold at the base price. The radiowaves can be used for 2G, 3G and high-speed 4G services. Seven telecom companies including Bharti Airtel, Vodafone India, Idea Cellular, Reliance Jio Infocomm, Reliance Communications, Tata Teleservices and Aircel had qualified for participating in the spectrum sale.

The CNX Nifty ended at 8743.95, down by 25.20 points or 0.29% after trading in a range of 8731.40 and 8806.95. There were 20 stocks advancing against 30 stocks declining on the index, while one stock remained unchanged. (Provisional)

The top gainers on Nifty were Tata Motors - DVR up by 2.97%, Ultratech Cement up by 2.02%, BPCL up by 1.95%, Hindalco up by 1.94% and Bharti Infratel up by 1.91%. On the flip side, ONGC down by 2.52%, Axis Bank down by 1.99%, Idea Cellular down by 1.54%, Bajaj Auto down by 1.25% and Hero MotoCorp down by 1.22% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX declined 71.4 points or 0.67% to 10,548.21, UK’s FTSE 100 decreased 34.45 points or 0.49% to 7,039.89 and France’s CAC was down by 31.42 points or 0.7% to 4,471.67.

Asian equity markets ended mostly lower on Wednesday, as hawkish comments from Federal Reserve officials and speculation that the European Central Bank may start unwinding its quantitative easing program offset gains by energy companies.  On Tuesday, Richmond Fed President Jeffrey Lacker said there was a strong case for raising interest rates, while on Wednesday, in a speech in New Zealand, Chicago Fed President Charles Evans said he would be ‘fine’ with hiking rates by year-end if the data remained supportive. Japanese shares closed higher on a weaker yen. Investors shrugged off the Nikkei services PMI report, which showed that Japan's services sector activity contracted at the fastest pace since April 2014 in September. Hong Kong stocks posted modest gains in thin trading, lifted by energy shares with an overnight surge in oil prices and helped by some short covering. Markets in mainland China remain closed all week.