Boisterous benchmarks stage smart recovery after early crash; Nifty reclaims 8,400 mark

Indian equity indices staged a sharp recovery in the second half of the trading session as the market took Donald Trump's victory in its stride. Donald John Trump was elected the 45th president of the United States on Tuesday, becoming the least politically experienced candidate to ascend to the office in the nation’s 240-year history. 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. IT stocks came under pressure as investors reacted to the US presidential elections result. For the $150 billion IT services industry a Trump victory will only add to its woes and challenges the industry is facing on growth due to automation and technology disruption. Trump right from the start of his campaign days has stated that he wants to bring jobs back to the US. This includes both the manufacturing jobs that China has taken away and employment in tech industries that has come to India. On the domestic front, sentiments got undermined on Prime Minister Narendra Modi’s announcement that 500 and 1,000 rupee banknotes would be withdrawn from circulation at midnight to crack down on rampant corruption and counterfeit currency. The surprise move was designed to bring billions of dollars worth of cash in unaccounted wealth into the mainstream economy, but this move will adversely impact the country’s economy in near term, given that about 40% of the economy is driven by small- and medium-sized enterprises that largely depend on cash transactions. Sectors like real estate, construction material, and jewellery that use more of black money will take a big knock, while e-commerce sector having cash on delivery may feel impact on sales. Every unorganised sector in every trade also will feel the impact of this bold move. However, investors 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.

On the global front, Asian market ended lower on Wednesday 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, while Chinese market declined after data showed Chinese consumer price inflation edged up in October for a second consecutive month. Meanwhile, European counter parts too traded with a negative bias and France’s CAC shed over half a percent, being the biggest laggard in the space.

Back home, after getting a gap down opening, the key gauges plunged to lowest point in the day as investors largely remained influenced by the pessimistic sentiments prevailing in Asian markets. Thereafter started the road to recovery for the bourses which kept slowly but steadily moving towards the neutral line. Though the bourses recovered from the lows of the day but could not succeed in minimizing all losses by the end of trading session. Finally the NSE’s 50-share broadly followed index Nifty, suffered a nasty one hundred point laceration to settle below the crucial 8,450 support level, while Bombay Stock Exchange’s Sensitive Index Sensex got obliterated by over three hundred points and closed below the psychological 16,350 mark. Moreover, the broader markets too showed a dramatic recovery after the bulls powered up post afternoon trades.

The market breadth remained pessimistic as there were 610 shares on the gaining side against 2157 shares on the losing side, while 97 shares remained unchanged.

Finally, the BSE Sensex declined 338.61 points or 1.23% to 27252.53, while the CNX Nifty dropped 111.55 points or 1.31% to 8,432.00. 

The BSE Sensex touched a high and a low of 27397.38 and 25902.45, respectively and there were 9 stocks on gainers side against 21 stocks on the losers side on the index.

The broader indices made a negative closing; the BSE Mid cap index ended lower by 1.85%, while Small cap index was down by 2.66%.

The only gaining sectoral indices on the BSE were 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.

The top gainers on the Sensex were Dr. Reddys Lab up by 5.04%, Sun Pharma up by 4.07%, SBI up by 2.83%, Power Grid up by 1.95% and GAIL India up by 1.44%. On the flip side, TCS down by 4.93%, Maruti Suzuki down by 4.68%, Hero MotoCorp down by 3.97%, Mahindra & Mahindra down by 3.43% and Adani Ports &Special down by 2.97% were the top losers.

Meanwhile, Another milestone has been achieved towards implementation of Goods and Services Tax (GST) regime from April 2017, as the government’s new and simpler GST portal gone live on November 8, for migrating tax payers. This will enable easy filing of returns and tax payments through credit/debit cards and other modes.

Goods and Services Tax Network (GSTN) Chairman Navin Kumar said that as much as 60 percent of the software required to run GST is ready and balanced 40 percent work is on process of completion. He said that about 80 lakh tax payers will be migrated from the existing system to GST regime. GSTN is not only building a network that will integrate the assesses paying service tax, excise and other local levies, but also it will help in building the IT backbone for online registration, refund, return filing and tax payment.

On the new portal, businessmen and traders who currently have to file separate returns for array of indirect taxes like excise duty, service tax and VAT, will file a single monthly return and pay tax online through various payment cards, including credit and debit. The GSTN is building four data centers spread across Delhi and Bengaluru to ensure that the data is safe, secure and to ensure data recovery, whenever required. A provisional identification number, called GSTIN for assesses who have moved to the new portal is being generated. New registrations under GST will start from April 2017.

The CNX Nifty traded in a range of 8,476.20 and 8,002.25. There were 15 stocks in green against 36 stocks in red on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 5.64%, Sun Pharma up by 4.82%, SBI up by 3.23%, Power Grid up by 2.34% and Bank of Baroda up by 2.11%. On the flip side, Ambuja Cement down by 5.58%, Maruti Suzuki down by 4.57%, TCS down by 4.27%, Tech Mahindra down by 4.22% and Ultratech Cement down by 4.07% were the top losers.

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.