Post Session: Quick Review

Indian equity benchmarks pared all gains and ended in red as selling pressure was visible across the sectors on account of profit booking. The selling was witnessed by funds and retail investors ahead of US non-farm payrolls report on Friday and June-quarter corporate results starting next week. The benchmarks made a positive start in early deals as RBI Governor Urjit Patel signaled a marked departure in policy approach from his predecessor’s unwavering focus on price stability. He said that ‘The NPA situation is an important issue for the RBI in India. We will be dealing with it with firmness but also with pragmatism so that the economy does not feel any lack of credit’. Some additional buying crept in on reports that foreign institutional investors bought cash shares worth Rs 243 crore on Wednesday, while domestic institutional investors were net sellers to the tune of Rs 350 crore. However, investors took cautions approach on International Monetary Fund (IMF) report which noted that countries such as India have taken steps to reduce non-performing loans, but stressed that additional and timelier actions are needed. The comments, included in its latest Global Financial Stability Report released also called for improved policies to manage corporate distress. The IMF report warned of rising medium-term risks and said global financial stability will now depend on how well financial institutions adapt to the new era of low growth and low interest rates.

Pessimism spilled on India Meteorological Department’s statement that monsoon into October has led to crop damage in many areas. Also, India’s service activity lost steam in September after touching a three year high last month. 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. Data released by the same agency on Monday showed that India’s manufacturing lost momentum in September after growing at its fastest pace in thirteen months in August. The time when India is celebrating its 16 point improvement in the world competitiveness index, both its policy makers and industrialists feel that a lot still needs to be done to ensure that India grows at 8% over the next few years. Commerce minister Nirmala Sitharaman stated at the India Economic Summit that the government needs to work harder with states to remove all regulatory hurdles still prevailing at the lower level. The government also needs to ensure that whatever investment is coming into the country actually translates into rapid productions, exports and lead to creation of good jobs in the country to help us achieve high growth.

On the global front, Asian markets ended mostly in green, while the dollar strengthened further on growing expectations the US will hike interest rates by the end of the year. Japanese exporters welcomed the weaker yen, sending the Nikkei higher for its fourth-straight gain. Seoul rose with market giant Samsung Electronics soaring to a record high as the firm said it would review a proposal by US hedge fund Elliott Management to split it into two companies. European shares retreated after easy Jet dropped to its lowest in more than three years, although the beaten-down banking sector rose for the third straight session.

The BSE Sensex ended at 28106.21, down by 114.77 points or 0.41% after trading in a range of 28031.22 and 28328.56. There were 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.56%, while Small cap index was down by 0.48%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.64%, PSU up by 0.18% and Metal up by 0.07%, while Realty down by 1.48%, Power down by 1.18%, IT down by 0.87%, TECK down by 0.78% and Bankex down by 0.70% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 3.46%, Reliance Industries up by 2.12%, Hindustan Unilever up by 1.46%, ONGC up by 0.90% and Maruti Suzuki up by 0.42%. (Provisional)

On the flip side, Cipla down by 2.50%, NTPC down by 2.03%, Mahindra & Mahindra down by 1.97%, Power Grid Corporation down by 1.83% and Infosys down by 1.41% were the top losers. (Provisional)

Meanwhile, the government has received cumulative commitments of Rs 63,500 crore from telecom operators at the end of fourth day of spectrum auction. The additional amount raised on the fourth day was just Rs 2,531 crore and there were six fresh rounds of bidding with the total rounds now standing at 23.

According to data of Telecom Department, there is no demand yet for frequencies in 700 MHz and 900 MHz bands, while bidding interest has been seen largely around 1800 MHz and 2300 MHz that can be used by operators to provide 4G services. During the bidding on day 4, in 800 MHz, there were bids in four circles but the price increase over the reserve price was only in Rajasthan and Punjab and in 1800 MHz, there were bids in all 22 circles but the price increase was seen in only two circles, Mumbai and Uttar Pradesh (east).

On the first day of bidding telecom spectrum auctions fetched Rs 53,531 crore, Rs 56,792 crore on second day and at the end of third day of bidding Rs 59,981 crore . As much as 2,354.55 MHz of frequencies valued at Rs 5.63 lakh crore at the base price have been put up for auction across seven bands.

As per the bid document, the duration of each bidding round is reduced when the number of slots put up for auction, falls below 10 slots. The government had put up 126 slots on the offer in the current spectrum auction, which was touted to be as the largest spectrum auction ever. The government has fixed a pan-India reserve price of Rs 2,873 crore per MHz for spectrum in 1,800 MHz band; Rs 3,341 crore for 900 MHz; Rs 5,819 crore for 800 MHz; Rs 3,746 crore for 2,100 MHz; Rs 11,485 crore for 700 MHz and Rs 817 crore each for 2,300 MHz and 2,500 MHz bands.

The CNX Nifty ended at 8712.40, down by 31.55 points or 0.36% after trading in a range of 8684.65 and 8781.15. There were 17 stocks advancing against 34 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 3.55%, GAIL India up by 3.55%, Grasim Industries up by 2.20%, Reliance Industries up by 2.07% and Hindustan Unilever up by 1.42%. (Provisional)

On the flip side, Bank of Baroda down by 2.89%, Cipla down by 2.33%, Power Grid Corporation down by 2.04%, NTPC down by 1.80% and Ultratech Cement down by 1.76% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 28.22 points or 0.4% to 7,005.03, Germany’s DAX decreased 38.53 points or 0.36% to 10,547.25 and France’s CAC decreased 14.69 points or 0.33% to 4,475.26.

The Asian markets ended mostly higher on Thursday, with an overnight rally in oil prices and positive economic data from the US underpinning investor sentiment. The Institute of Supply Management reported on Wednesday that its non-manufacturing activity index surged to a reading of 57.1, hitting an 11-month high and well above market consensus of 53. Japanese shares extended gains for a fourth consecutive session as a weaker yen boosted investors' risk appetite. Hong Kong stocks ended higher, boosted by buying of Chinese shares as some investors built positions ahead of next week's reopening of the China market. However, gains remained capped ahead of the all-important US jobs report due on Friday, which could shed some light on whether there will be a rate increase at the Fed's policy meeting in early November.