Post Session: Quick Review

Indian equity benchmarks traded choppy in a narrow range and ended in green. Concern about the global economy contributed to the early weakness, while value buying at reduced levels after the drop helped the bourses in some recovery. This week has seen brutal cuts on equity markets globally as investors contend with weak China data, weak start to earnings in the US & now almost 70% probability of rate hike by the Federal Reserve. The benchmarks pared all their initial gains and entered into red terrain in early deals after Infosys, India’s second largest software exporter has lowered its revenue guidance (constant currency) for FY17. The sentiments got some support after Indian rupee opened higher against the US dollar on increased selling of the American currency by banks and exporters. The retail or CPI inflation touched 13-month low, aided by lower food prices especially those of vegetables. This is the first time in this financial year that the overall CPI-based inflation has fallen below the Reserve Bank of India’s target of 5 percent by March 2017. Some support also came with reports that the government may seek parliamentary approval to spend about $7.5 billion more on roads, railways and other public programmes over the next five months. However, cautiousness prevailed on report that foreign institutional investors were net sellers in equities worth Rs 912 crore on Thursday, as per provisional stock exchange data. Additionally, Infosys, the country’s second largest software exporter has lowered its revenue guidance (constant currency) for FY17. The company cut its FY17 revenue guidance for second time this year to 8-9 percent against 10.5-12 percent forecasted earlier. Dollar revenue guidance was lowered to 7.5-8.5 percent from 10-11.5 percent earlier.

On the global front, Asian markets ended mostly in green, with Shanghai bucking a positive trend with prices data from China that gave hopes for renewed demand prospects after disappointing trade data earlier this week. China reported CPI for September with a gain of 0.7% month-on-month, well above the 0.3% pace seen and led by food prices and a 1.9% increase year-on-year, faster than the 1.6% rise expected. European stocks were trading higher as better-than-expected inflation data from China lifted market sentiment and as markets focused on upcoming US economic reports, as well as a speech by Federal Reserve Chair Janet Yellen.

Back home, banking stocks gained traction after the central bank allowed banks to classify government securities borrowed from the central bank in the daily liquidity adjustment facility (LAF) under the statutory liquidity ratio (SLR), making liquidity management for banks easier. Select cement stocks traded in green on report that cement demand in the country is expected to touch 8 per cent in financial year (FY) 2017-18, helped by government’s push in the infrastructure sector.

The BSE Sensex ended at 27699.38, up by 56.27 points or 0.20% after trading in a range of 27548.18 and 27763.54. 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 0.88%, while Small cap index was up by 0.82%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.14%, Capital Goods up by 1.48%, Power up by 1.00%, PSU up by 0.90% and Realty up by 0.74%, while TECK down by 0.72%, IT down by 0.47% and Metal down by 0.27% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 3.97%, Larsen & Toubro up by 2.35%, Tata Motors up by 2.06%, Reliance Industries up by 1.92% and ONGC up by 1.82%. (Provisional)

On the flip side, Infosys down by 2.56%, Hindustan Unilever down by 2.26%, HDFC down by 1.30%, Lupin down by 1.18% and Coal India down by 0.87% were the top losers. (Provisional)

Meanwhile, India’s Wholesale Price Index (WPI) inflation eased to 3.57 percent month-on-month in September as food articles led by vegetables witnessed softening of prices. Meanwhile, for the month of July, 2016, the final Wholesale Price Index for ‘All Commodities’ stood at 184.2 as compared to 183.9 (provisional) and annual rate of inflation based on final index stood at 3.72 percent as compared to 3.55 percent (provisional) respectively as reported on 16.08.2016.

As per the data of Ministry of Commerce & Industry, the annual rate of inflation, based on monthly WPI, stood at 3.57% for the month of September, 2016 as compared to 3.74% (provisional) for the previous month and -4.59% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 4.28% compared to a build up rate of 0.23% in the corresponding period of the previous year.

Component wise, primary articles index, having weight of 20.12%, witnessed a drop of 1.9% to 263.9 (provisional) from 268.9 (provisional) for the previous month. Among the primary articles, the index for ‘Food Articles’ group declined by 1.6 percent to 279.6 (provisional) from 284.2 (provisional) for the previous month, the index for ‘Non-Food Articles’ group declined by 2.5 percent to 230.3 (provisional) from 236.3 (provisional) for the previous month and the index for ‘Minerals’ group declined by 2.7 percent to  210.4 (provisional) from 216.3  (provisional) for the previous month.

Fuel & Power index having weight of 14.91% increased by 1.8% to 185.4 (provisional) from 182.2  (provisional) for the previous month due to higher price of furnace oil and petrol.

Manufactured Products index having weight of 64.97% increased by 0.3% to 157.1 (provisional) from 156.7 (provisional) for the previous month. Among the items in the group, the index for ‘Food Products’ group rose by 0.6 percent to 192.5 (provisional) from 191.3 (provisional) for the previous month, the index for ‘Wood & Wood Products’ group rose by 1.6 percent to 200.8 (provisional) from 197.6 (provisional) for the previous month, the index for ‘Basic Metals, Alloys & Metal Products’ group rose by 0.7 percent to 153.0 (provisional) from 151.9 (provisional) for the previous month, the index for ‘Textiles’ group rose by 0.1 percent to 142.2 (provisional) from 142.1 (provisional) for the previous month, the index for ‘Rubber & Plastic Products’ group rose by 0.1 percent to 147.8 (provisional) from 147.6 (provisional) for the previous month, the index for ‘Transport, Equipment & Parts’ group rose by 0.1 percent to 139.8 (provisional) from 139.7 (provisional) for the previous month, while the index for ‘Chemicals & Chemical Products’ group declined by 0.4 percent to 150.6 (provisional) from 151.2 (provisional) for the previous month, the index for ‘Leather & Leather Products’ group declined by 0.2 percent to 145.8 (provisional) from 146.1 (provisional) for the previous month, the index for ‘Paper & Paper Products’ group declined by 0.1 percent to 156.8 (provisional) from 157.0 (provisional) for the previous month, the index for ‘Non-Metallic Mineral Products’ group declined by 0.1 percent to 179.4 (provisional) from 179.5 (provisional) for the previous month.

The CNX Nifty ended at 8586.45, up by 13.10 points or 0.15% after trading in a range of 8549.80 and 8604.45. There were 30 stocks advancing against 21 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 3.60%, Larsen & Toubro up by 2.46%, Tata Motors - DVR up by 2.30%, Tata Motors up by 2.14% and Reliance Industries up by 2.06%. (Provisional)

On the flip side, Zee Entertainment down by 3.39%, Bharti Infratel down by 2.63%, Infosys down by 2.58%, Hindustan Unilever down by 2.04% and Eicher Motors down by 1.83% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 56.34 points or 0.81% to 7,034.08, Germany’s DAX increased 178.69 points or 1.72% to 10,592.76 and France’s CAC increased 82.04 points or 1.86% to 4,487.21.

The Asian markets ended mostly in green on Friday, reversing some early losses, as investors weighed price increases in China and the possibility of a US interest rate hike later in the year. Asian shares received a boost from a relatively weaker Japanese yen against the dollar. Japan equities ended higher as gains in the Chemical, Petroleum & Plastic, Mining and Communication sectors propelled shares higher. Meanwhile, China stock ended little changed as investors wrestled with mixed economic reports ahead of third-quarter GDP data next week that will shed more light on the health of the economy. Trade data on Thursday showed exports fell more than expected in September while imports unexpectedly shrank, raising doubts about whether recent stabilization in the economy may be short-lived. Inflation data on Friday, however, showed producer and consumer prices had picked up.