Post Session: Quick Review

Indian equity benchmarks traded on lackluster note whereby key indices witnessed high intraday volatility throughout the day and ended in red. The street expects that one should brace for volatility as crucial global events are scheduled over the next two weeks. The benchmarks made a cautious start in early deals as traders remained on sidelines. The rupee strengthened against the US dollar on increased selling of American currency by exporters and banks. The infrastructure sector recorded a growth rate of 5% in September, the highest in three months, made the rupee stronger. The Core sector output rose to three months high by 5% in September, compared to growth of 2.4% in the year-ago period, on the back of a sustained growth in the steel sector and a rise in refinery products. The sentiments got a push after the Nikkei Markit India Manufacturing Purchasing Managers’ Index (PMI) - a gauge of manufacturing performance - rose to 54.4 in October from 52.1 in September, indicative of a robust improvement in manufacturing business conditions in the country. As per ASSOCHAM report, Indian economy is expected to fare better in the second half of the current fiscal backed by uptick in sales and improved capacity utilization, though fresh investments and new jobs creation may be a concern going forward. Besides, an increased spending on infrastructure development, largely by the government, is seen as the most important driver for a turnaround in the economic outlook for the period between October and March this fiscal. Separately, a private report highlighted that the Indian economy is well-prepared, even if not completely immune, for any external risk in case the US Federal Reserve normalizes rates in December. The report stated that while this is a source of concern for most emerging markets, the Indian economy is well-prepared even if not completely immune to any resultant volatility. According to Controller General of Accounts data, fiscal deficit was Rs 4,47,988 crore for the six-month period ending September, accounting for 83.9% of the Rs 5,33,904 crore budgeted for the entire year. The deficit widened to 83.9% for April-September 2016 against 68.1% in the corresponding previous period. This is on the back of higher government spending.

On the global front, Asian markets ended mostly in red, while Japan stocks closed higher, as gains in the Transport, Insurance and Construction sectors led shares higher. Factory activity in China expanded at its fastest pace in more than two years last month, official and private measures both showed, boding well for the world’s second-largest economy. European stocks were trading in green as upbeat Chinese data lifted market sentiment and investors focused on a fresh batch of earnings reports.

Back home, mixed reactions were displayed in auto companies stocks after reporting October sales numbers. Maruti Suzuki India, country’s largest car maker, has registered a fall of 0.3% in its total car sales (Domestic + Export) for the month of October 2016 at 133,793 units, as against 134,209 units in October 2015. Ashok Leyland has reported an increase of 28% in October 2016 sales to 12533 units, as against 9803 units sold in the same period of last year. Atul Auto has reported a sale of 5,037 units, showing a rise of 9.52% for the month of October 2016 as compared to 4,599 units sold in October 2015. SML Isuzu has reported 22.8% rise in October sales. The company has sold 963 vehicles during October 2016 against 784 vehicles sold in October 2015.

The BSE Sensex ended at 27859.64, down by 70.57 points or 0.25% after trading in a range of 27845.63 and 28029.80. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.29%, while Small cap index was down by 0.23%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 3.57%, Power up by 0.63%, PSU up by 0.48% and Auto up by 0.30%, while IT down by 1.18%, Consumer Durables down by 1.02%, TECK down by 1.00%, FMCG down by 0.87% and Capital Goods down by 0.59% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 3.44%, NTPC up by 2.55%, HDFC up by 2.40%, Coal India up by 1.50% and Power Grid up by 0.77%. (Provisional)

On the flip side, Axis Bank down by 2.77%, Sun Pharma down by 1.96%, TCS down by 1.78%, Infosys down by 1.55% and Cipla down by 1.18% were the top losers. (Provisional)

Meanwhile, a joint study of industry body Associated Chambers of Commerce and Industry of India (ASSOCHAM) and TechSci Research, has said that Indian fast-moving consumer goods (FMCG) firms have performed considerably good vis-a-vis the multinational companies (MNC) in India during 2015-2016. According to the study, during the FY16, the combined overall revenue of selected eight MNCs registered a total of $9436.66 million, whereas selected seven Indian FMCG registered a total of $11066.46 Million.

The study has observed performance analysis of selected Indian FMCG companies, during 2015-16 the highest profit after tax (PAT) margin is recorded at 25.48% by ITC as comparative to Procter & Gamble Hygiene & Health Care among selected leading MNC players in FMCG sector in India, which recorded the highest PAT margin at 17.03%. As per the joint study, Britannia Industries stood second among firms in terms of revenue of $1,222.75 million during 2015-16 and has registered revenue growth of 10.76% as compared to 2014-15. However, its PAT margin stood at 9.43%, which is comparatively lower than its peers in the sector.

The report also noted that the performance of Dabur India is next to ITC in terms of PAT registered at 16.34%, followed by Godrej Consumer Products at 15.37%. About the performance of Amul, although the company has revenue $743.69 million, which is slightly more than Godrej Consumer Products, its PAT margin is least amongst others at just 0.32%. In case of Amul, the reason can be the fact of controlled prices and nature of milk and milk-made products.

After analyzing the performance of selected multinational companies of FMCG sector in India, the study has stated that Hindustan Unilever is leading with its revenue of $4,921.10 million with 3.84% year-on-year growth in the revenue. However, the PAT margin of the company during the year is $628.06 million or 12.76%, which is comparatively lower than its competitor.

The CNX Nifty ended at 8624.50, down by 1.20 points or 0.01% after trading in a range of 8614.50 and 8669.60. There were 26 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Eicher Motors up by 5.16%, Hindalco up by 4.77%, Tata Steel up by 3.29%, NTPC up by 2.85% and HDFC up by 2.79%. (Provisional)
On the flip side, Axis Bank down by 2.58%, Sun Pharma down by 1.88%, Kotak Mahindra Bank down by 1.86%, Cipla down by 1.43% and Zee Entertainment down by 1.40% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 7.99 points or 0.11% to 6,962.21, Germany’s DAX increased 6.04 points or 0.06% to 10,671.05 and France’s CAC increased 0.04 points to 4,509.30.

Asian equity markets ended mostly in red on Tuesday, as a sell-off in oil futures, the uncertainty surrounding the US election and expectations of a December Fed rate hike offset fresh signs of strength in the world's second-largest economy. Chinese stocks ended higher after an official survey showed the country's manufacturing sector expanded at a faster pace than expected in October. The official Purchasing Managers' Index (PMI), a measure of manufacturing activity, stood at 51.2 in October, the fastest pace in over two years, compared with the previous month's 50.4 and above the 50-point mark that separates growth from contraction. Separately, the Caixin manufacturing PMI for China came in at 51.2 in October, up from 50.1 in September. Japanese shares edged higher in choppy trade after the Bank of Japan held policy steady, as expected, while disappointing earnings forecasts from some bellwether companies capped gains.