Post Session: Quick Review

Indian equity benchmarks traded in narrow range oscillating between positive and negative terrain and ended with modest gains. Today, the last trading session of the Samvat year 2072 marked the beginning of the November series of derivatives contracts. The benchmarks made a cautious start on first day of new F&O series in early deals hit by muted quarterly earnings by some blue-chips amid capital outflows. However, buying crept in with Finance Minister Arun Jaitley’s statement that the economic situation in Asia is not as pessimistic as the rest of the world and it has a higher growth potential. Though, he also said India will have to undergo rapid urbanization in the next two decades and conceded that management or urban infrastructure, especially of water will become a serious challenge. Separately, a private report highlighted that eight of every 10 Indians have a favourable view of Modi. While the Modi government has taken some serious measures to revive the economy, the Modi premium has gone and the Sensex has generated only an inadequate return of 8% in the past one year. As per Samvat Survey, all the 15 top brokerages and fund houses expressed strong optimism and hopes that the Modi regime will deliver more goodies to the economy in Samvat 2073. The key things on the wish lists include implementation of GST, better employment generation, capex revival, easier rules for businesses and a stronger clampdown on black money. The stock market will remain closed on Monday i.e. October 31, 2016 on occasion of Diwali holiday. Meanwhile, the stock market will remain open for a special trading session (Muhurat trading) on Sunday, October 30, 2016, on account of Diwali. The market will remain open from 18:30 to 19:30 on that day.

On the global front, Asian markets ended mostly in red, with China stocks dipped as investors sifted through a slew of corporate earnings to assess China’s economic health, with weakness in big-cap infrastructure stocks offsetting strength in financials. Profit growth in China’s industrial firms in September slowed sharply from a month ago as some key manufacturing sectors suffered weak activity and rising debt. European stocks mostly slumped with brewer Anheuser-Busch InBev NV among the companies whose shares were dragged down after downbeat financial updates.

The BSE Sensex ended at 27946.76, up by 30.86 points or 0.11% after trading in a range of 27789.84 and 28000.14. There were 17 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.94%, while Small cap index was up by 0.99%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.06%, Realty up by 1.35%, Auto up by 1.29%, PSU up by 1.22% and Oil & Gas up by 0.81%, while IT down by 0.27% and TECK down by 0.26% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 3.35%, Tata Motors up by 2.62%, Coal India up by 2.37%, Tata Steel up by 1.66% and Lupin up by 1.35%. (Provisional)

On the flip side, ICICI Bank down by 2.31%, Cipla down by 1.69%, Asian Paints down by 1.51%, Bharti Airtel down by 1.38% and Infosys down by 0.68% were the top losers. (Provisional)

Meanwhile, the Union Cabinet has given in-principle approval for strategic sale in over a dozen public sector undertakings (PSUs) including those that are making profits, as recommended by the government think thank Niti Aayog. Although, the government has not disclosed the number and names of public sector companies in which it will sell stakes, but the companies are a mix of loss-making and profitable units and the government is looking to bring down its stake to less than 50% in some of them.

Finance Minister Arun Jaitley said the names of PSUs that are up for strategic stake sale would be made public once they are going to be put up for the auction. Specific cases would now come up after a detailed examination as to how it is to be done in each case and the details with regard to the units concerned will be furnished at that stage. This list does not include PSUs for closure. He added that some of these are important units and therefore since each unit would be considered in its own merit, the timing of that would be decided by the government accordingly.

With regard to valuation of these PSUs, Jaitley said that there are settled valuation processes and a transparent one would be followed. He said that sale methods and valuation for PSUs or units up for sale would be examined by the Department of Investment and Public Asset Management (DIPAM) and the line ministry. DIPAM and the ministries, under which these companies function, will now draw up a detailed plan for the stake sales, cabinet’s approval will again be sought for each of them separately.

The government's disinvestment target for the current financial year is Rs 56,500 crore. Of this, Rs 36,000 crore is expected from minority stake sales and buybacks. The rest Rs 20,500 crore is expected from 'strategic sales' in loss-making or profit-making PSUs or their assets (factories, warehouses, office buildings, etc).

The CNX Nifty ended at 8639.95, up by 24.70 points or 0.29% after trading in a range of 8581.75 and 8653.75. There were 31 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tech Mahindra up by 5.05%, Bajaj Auto up by 3.39%, Zee Entertainment up by 3.10%, Tata Motors - DVR up by 2.86% and Tata Motors up by 2.84%. (Provisional)

On the flip side, ICICI Bank down by 2.53%, Eicher Motors down by 2.29%, Bharti Infratel down by 2.25%, Cipla down by 2.06% and Bosch down by 1.68% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 11.62 points or 0.17% to 6,974.95 and Germany’s DAX decreased 44.79 points or 0.42% to 10,672.29, while France’s CAC increased 7 points or 0.15% to 4,540.57.

The Asian markets ended mostly lower on Friday, led by losses in Hong Kong stocks ahead of crucial US jobs data due tonight that could strengthen the case for the Federal Reserve to raise rates by the year-end. Chinese shares dropped as losses in the infrastructure sector overshadowed gains among financials in the wake of well-received earnings updates from banks and brokerages. Meanwhile, Japanese shares ended higher as the yen breached the 105 level and solid results from German bank Deutsche Bank as well as gains in the US and Japanese government bond yields lifted financials.