Post Session: Quick Review

Wednesday’s session turned out to be a daunting day of trade for Indian equity benchmarks where frontline gauges tumbled below their crucial 27,300 (Sensex) and 8,450 (Nifty) levels, though markets made some recovery in second half of trade but it was not enough to cover-up all the losses. Sentiments remained dampened, as Republican Donald Trump stunned the world by defeating heavily favoured Hillary Clinton in the race for the White House, ending eight years of Democratic rule and sending the United States on a new, uncertain path. Traders also reacted negatively to the government’s historic decision to withdraw Rs 500 and Rs 1,000 notes from circulation at midnight, saying this decision was taken to break the grip of corruption and black money. Prime Minister Narendra Modi said the notes of Rs 500 and Rs 1000 “will not be legal tender from midnight tonight” and these will be “just worthless pieces of paper.”  RBI Governor Urjit Patel said that this step will help to put an end to the circulation of fake money and that they have increased the production of the new currency.

However, markets made smart recovery in second half of the session, as traders opted to buy beaten down but fundamentally strong stocks. Market participants took some sigh of relief with the report that a new and simpler portal for the incoming Goods and Services Tax regime went live on Tuesday that will enable easy filing of returns and tax payments through credit/debit cards and other modes.

Global cues too remained somber with European counters making a feeble start and all the Asian counterparts ended in red terrain on Wednesday, as investors faced the real possibility of a shock win by Republican Donald Trump that could upend the global political order. Investors fear a Trump victory could cause global economic and trade turmoil and years of policy unpredictability, discouraging the Federal Reserve from raising interest rates in December as long expected.

Back home, depreciation in Indian currency too dampened sentiments. The rupee plummeted further by 28 paise to 66.90 against the US dollar at the time of equity markets closing on the government’s move to withdraw higher-denomination currency notes compounded with US election trend. Shares of real estate companies remained under severe pressure, falling by up to 20% on the bourses after Prime Minister Narendra Modi on Tuesday announced that Rs 500 and Rs 1,000 currency notes would no longer be printed, as part of his government's fight against black money. IT stocks ended lower as investors reacted to early results and predictions for the US presidential elections, showing gains for Trump in crucial states.

The NSE’s 50-share broadly followed index Nifty lost over one hundred and ten points to end below the psychological 8,450 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex tumbled by around three hundred and forty points to finish below its psychological 27,300 mark. Broader markets too witnessed selling pressure and ended the session with a cut of around two percent.

The market breadth remained in favor of decliners, as there were 612 shares on the gaining side against 2,154 shares on the losing side while 98 shares remain unchanged. (Provisional)

The BSE Sensex ended at 27252.53, down by 338.61 points or 1.23% after trading in a range of 25902.45 and 27397.38. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index tumbled 1.85%, while Small cap index was down by 2.66%. (Provisional)

The few gaining sectoral indices on the BSE were Healthcare up by 1.55%, Bankex up by 0.18%, PSU up by 0.10% and Oil & Gas up by 0.02%, while Realty down by 10.23%, Consumer Durables down by 4.18%, IT down by 3.28%, TECK down by 2.84% and Auto down by 2.52% were the top losing indices on BSE. (Provisional)

The few gainers on the Sensex were Dr. Reddys Lab up by 5.14%, Sun Pharma up by 4.86%, SBI up by 2.93%, Power Grid up by 2.20% and GAIL India up by 1.54%. On the flip side, TCS down by 4.32%, Maruti Suzuki down by 4.06%, Hero MotoCorp down by 3.64%, Adani Ports &Special down by 2.84% and HDFC down by 2.77% were the top losers. (Provisional)

Meanwhile, in order to boost export finance, Commerce and Industry Minister Nirmala Sitharaman has said that Export Credit Guarantee Corporation of India (ECGC) will require an adequate headroom as it provides a range of credit risk insurance covers to exporters against loss in export of goods and services. She said that exports from India suffer due to unmet trade finance needs of as much as $300 billion.

Sitharaman also said that the Ministry will take the issues of ECGC with the Finance Ministry to further strengthen it and will also negotiate with Reserve bank of India so that greater room is given to ECGC because it cannot be too much regulated. She added that at this crucial time the government needs to support exporters to explore newer markets and also need to support the ECGC and strengthen the organization so that it gets the flexibility to operate. She said that exporters need to look at newer markets like Latin America and Africa as demand growth is slow in the traditional markets.

ECGC, wholly-owned by the central government, was set up with the objective of promoting exports by providing credit risk insurance and related services. It also provides overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan.

The CNX Nifty ended at 8432.00, down by 111.55 points or 1.31% after trading in a range of 8002.25 and 8476.20. There were 12 stocks advancing against 38 stocks declining on the index, while one stock remained unchanged. (Provisional)

The top gainers on Nifty were Dr. Reddys Lab up by 5.24%, Sun Pharma up by 3.99%, SBI up by 2.91%, Power Grid up by 1.81% and GAIL India up by 1.69%. On the flip side, Ambuja Cement down by 5.66%, TCS down by 4.96%, Ultratech Cement down by 4.88%, Maruti Suzuki down by 4.87% and Tech Mahindra down by 4.33% were the top losers. (Provisional)

European markets were trading in red; Germany’s DAX decreased 95.94 points or 0.92% to 10,386.38, France’s CAC declined 53.79 points or 1.2% to 4,423.10 and UK’s FTSE 100 was down by 20.12 points or 0.29% to 6,823.01.

Asian equity markets ended in red on Wednesday and investors thronged to safe-haven assets such as sovereign bonds, gold, the Japanese yen and the Swiss franc, as Republican Donald Trump emerged as the winner of US presidential elections, capturing crucial victories over Hillary Clinton in Ohio, Florida, North Carolina and Pennsylvania. The surprise outcome, defying all odds, brought significant uncertainty in terms of the overall direction of economic policy. Japanese shares plunged, the biggest single-day drop since the Brexit vote, as Trump's shocking victory over Clinton sent safe-haven assets, including the yen soaring. Further, Chinese shares dropped after data showed Chinese consumer price inflation edged up in October for a second consecutive month. China's consumer prices index rose 2.1 percent from a year ago, matching expectations and up from 1.9 percent in September, while producer prices jumped an annual 1.2 percent - again beating forecasts for a 0.9 percent increase.