Indian markets settle with marginal gains; broader markets outclass blue-chips

Value buying coupled with healthy quarterly results by some heavyweights, buoyed the Indian equity markets on the last trading session of the Samvat year 2072 and beginning of the November series of derivatives contracts. Investors got some confidence with the report that Government is considering further relaxing foreign direct investment (FDI) norms in several areas, including trading, with an eye on more inflows. According to the report, the commerce and industry ministry is already on the job in this direction. There are certain sticking points in single brand retail trading that need to be reviewed. The government may also consider easing certain norms in the information and broadcasting sector, among others. Besides, appreciation in Indian rupee too aided sentiments. Indian rupee appreciated by 6 paise to 66.80 against the dollar at the time of equity markets closing on increased selling of the US currency by exporters and banks. Some support also came 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 urbanisation in the next two decades and conceded that management or urban infrastructure, especially of water will become a serious challenge. However, gains remained capped with report that foreign institutional investors continued to remain sellers in Indian equities with net sales of Rs 470 crore on October 27, 2016.

On the global front, Asian markets ended mostly in red on Friday, as the negative cues from Wall Street and enhanced prospects of a near-term Fed rate hike dampened investors’ sentiments. Chinese stocks declined as losses in the infrastructure sector overshadowed gains among financials in the wake of well-received earnings updates from banks and brokerages, while Japanese stocks edged 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. Meanwhile, an avalanche of earnings announcements sent European shares lower for a fifth straight day, the longest streak in more than a month.

Back home, the local benchmarks started the first day of the November F&O series on a subdued note, amid weak global cues, weighed down by profit taking in some index heavyweights. The frontline indices kept losing steam thereafter and even drifted to the lowest point in the session in mid morning trades. However, the psychological 8600 and 27800 levels proved as strong support levels for the key gauges as the benchmarks soon recovered from the lows and clawed back into the green territory in late morning session. Short covering intensified in afternoon trade which stoked the bourses to the highest point in the session. Though, some profit booking in the late hours led the bourses snap the session below the session’s highs. Finally, the NSE’s 50-share broadly followed index Nifty, shut shop after gaining over quarter percent and regained the crucial 8,600 support level, while Bombay Stock Exchange’s Sensitive Index, or Sensex accumulated twenty fifty points to close a tad below the psychological 27,950 mark. Moreover, the broader markets managed a touch better than the larger peers as the BSE’s midcap and smallcap indices settled with gains of 0.95% and 0.96% respectively.

The market breadth remained optimistic as there were 1557 shares on the gaining side against 1088 shares on the losing side, while 283 shares remained unchanged.

Finally, the BSE Sensex gained 25.61 points or 0.09% to 27941.51, while the CNX Nifty rose 22.75 points or 0.26% to 8,638.00. 

The BSE Sensex touched a high and a low of 28000.14 and 27789.84, respectively and there were 17 stocks on gainers side against 13 stocks on the losers side on the index. The broader indices made a positive closing; the BSE Mid cap index ended higher by 0.95%, while Small cap index was up by 0.96%.

The top gaining sectoral indices on the BSE were Metal up by 2.09%, Realty up by 1.36%, Auto up by 1.26%, PSU up by 1.08% and Oil & Gas up by 0.60%, while IT down by 0.37% and TECK down by 0.35% were the few losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 3.35%, Tata Motors up by 2.68%, Coal India up by 2.33%, Tata Steel up by 1.85% and Dr. Reddys Lab up by 1.24%. On the flip side, ICICI Bank down by 2.41%, Cipla down by 1.74%, Asian Paints down by 1.51%, Bharti Airtel down by 1.36% and ONGC down by 0.91% were the top losers.

Meanwhile, Foreign Investment Promotion Board (FIPB), headed by Economic Affairs Secretary Shaktikanta Das, has approved seven out of 19 FDI proposals including those of Oxford University Press and Dr Reddy's Laboratories, entailing foreign direct investment (FDI) of Rs 100 crore.  The proposals of Oxford University Press and Dr Reddy's Laboratories together entail an investment of Rs 90 crore.

Other investment proposals taken up for consideration included those of BMJ Group India, Crest Premedia Solutions, Fans Asia, Flag Telecom Singapore Pte, and Barracuda Camouflage. Meanwhile, the board rejected four proposals.  In the previous meeting, FIPB had approved four foreign investment proposals entailing an investment of over Rs 2,000 crore. The government has taken a slew of measures in the recent past to boost foreign direct investment into the country. 

In 2015-16, the FDI inflows in the country grew by 29 per cent to $ 40 billion as compared to $30.94 billion in 2014-15. India allows FDI in most sectors through the automatic route, but in certain segments considered sensitive for the economy and security, the proposals have to be first cleared by FIPB. 

The CNX Nifty traded in a range of 8,653.75 and 8,581.75. There were 31 stocks in green against 20 stocks in red on the index.

The top gainers on Nifty were Tech Mahindra up by 4.82%, Bajaj Auto up by 3.35%, Zee Entertainment up by 3.10%, Tata Motors - DVR up by 3.10% and Tata Motors up by 2.84%. On the flip side, ICICI Bank down by 2.50%, Eicher Motors down by 2.29%, Bharti Infratel down by 2.25%, Cipla down by 1.84% and Tata Power down by 1.63% were the top losers.

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.