Post Session: Quick Review

Today’s session of trade turned out to be a bad day for the Indian benchmark indices, which got pounded by over two percent. The markets made a gap-down start and witnessed blood-bath in early deals as investors engaged in cutting down their bets. The rupee traded lower against the US dollar in early trade as the American currency strengthened overseas. Foreign Institutional Investors (FIIs) continued to sell in the local equity markets tracking fall in global markets. Since November 9 to 11, FIIs sold over Rs 4,320 crore provisionally in equities. The muted second quarterly earnings posted by some more blue chip companies also accelerated selling activity. The sentiments were on pessimistic note on concern with the Congress hardening its position ahead of the winter session of Parliament on the Goods and Services Tax (GST) Bill, saying it is opposed to the four-slab tax structure in which the top limit is 28%. The Congress and seven other Opposition parties met on Monday - ahead of the Winter Session of Parliament beginning November 16 - to formulate a joint strategy to put the government on the mat on a range of issues including the demonetisation move that has caused great inconvenience to the people, especially the poor. The street is also taking the note of demonetisation move whereby it is expected that there may be a negative impact on the GDP in the October-December quarter, as consumption shock gets transmitted into the system. The sudden decline in money supply and simultaneous rise in bank deposits post demonetisation is going to adversely impact consumption in the economy in the short term and may lead to a lower GDP growth.  It will also have a far-reaching impact on the capital-intensive real estate sector where almost one-third of transactions still involve unaccounted money. Since most of the cash in circulation now will be converted to bank deposits, banks will be the biggest beneficiaries of the demonetisation move.

Meanwhile, investors failed to get any sense of relief with the Commerce and Industry Minister Nirmala Sitharaman’s statement that export growth of 4.62% in September was a very significant development, bringing hope to exporters who are battling depressed demand globally. Separately, in the second consecutive month of decline, wholesale inflation eased to 3.39 percent in October as food articles, led by vegetables, witnessed softening of prices. The wholesale price-based inflation, reflecting the annual rate of price rise, in September stood at 3.57 percent.

On the global front, Asian markets closed mostly in red, Japan stocks ended lower as losses in the Paper & Pulp, Marine Transport and Transport sectors led shares down. China-share traders took in stride the fact that China’s onshore yuan dropped to an eight-year low against the US dollar. Investors braced for higher inflation in the United States amid expectations of fiscally expansionary polices under Donald Trump’s presidency. European shares climbed higher helped by energy stocks tracking a rally in crude oil prices and bond-proxy sectors such as utilities rebounding following a slight drop in yields.

Back home, Aviations stocks Jet Airways, InterGlobe Aviation and SpiceJet closed in red after government decided to levy up to Rs 8,500 per flight on major routes to fund the regional air connectivity scheme. IT stocks like Tech Mahindra, HCL Technologies, TCS, Infosys, and Wipro ended in green on weak rupee. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

The BSE Sensex ended at 26270.65, down by 548.17 points or 2.04% after trading in a range of 26253.63 and 26809.61. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 3.99%, while Small cap index down by 4.65%. (Provisional)

The losing sectoral indices on the BSE were Auto down by 5.01%, Realty down by 4.99%, Metal down by 4.78%, Consumer Durables down by 3.31% and FMCG down by 2.96%. (Provisional)

The top gainers on the Sensex were SBI up by 1.70%, TCS up by 1.69%, Dr. Reddy’s Lab up by 1.52%, Wipro up by 1.27% and Power Grid up by 0.79%. (Provisional)

On the flip side, Tata Motors down by 9.33%, Tata Steel down by 7.95%, Asian Paints down by 7.24%, Maruti Suzuki down by 5.84% and HDFC down by 4.26% were the top losers. (Provisional)

Meanwhile, in the second consecutive month of decline, India’s Wholesale price index (WPI) inflation softened to 3.39% in October due to easing prices of food and non-food items. As per the data of Ministry of Commerce & Industry, the annual rate of inflation, based on monthly WPI, stood at 3.39% (provisional) for the month of October, 2016 (over October, 2015) as compared to 3.57% (provisional) for the previous month and (-)3.70% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 4.34% compared to a build up rate of 0.45% in the corresponding period of the previous year.

Component wise, primary articles index, having weight of 20.12%, witnessed a decline of 0.8% to 261.8 (provisional) from 263.9 (provisional) for the previous month. Among the primary articles, the index for ‘Food Articles’ group dropped 0.3 percent to 278.8 (provisional) from 279.6 (provisional) for the previous month and the index for 'Non-Food Articles' group declined by 3.1 percent to 223.2 (provisional) from 230.3 (provisional) for the previous month, while the index for 'Minerals' group rose by 0.2 percent to 210.9 (provisional) from 210.4 (provisional) for the previous month.

Fuel & Power index having weight of 14.91%, rose by 1.0% to 187.3 (provisional) from 185.4 (provisional) for the previous month.

Manufactured Products constituting the major portion of the index with weightage of 64.97% increased marginally by 0.2% to 157.4 (provisional) from 157.1 (provisional) for the previous month. Among the items in the group, the index for 'Food Products' group rose by 0.3 percent to 193.0 (provisional) from 192.5 (provisional) for the previous month. The index for 'Basic Metals, Alloys & Metal Products' group rose by 1.4 percent to 155.2 (provisional) from 153.0 (provisional) for the previous month. The index for 'Rubber & Plastic Products' group rose by 0.5 percent to 148.5 (provisional) from 147.8 (provisional), the index for 'Chemicals & Chemical Products' group rose by 0.1 percent to 150.7 (provisional) from 150.6 (provisional), the index for 'Non-Metallic Mineral Products' group rose by 0.4 percent to 180.2 (provisional) from 179.4 (provisional) and the index for 'Transport, Equipment & Parts' group rose by 0.1 percent to 139.9 (provisional) from 139.8 (provisional) for the previous month. On the other hand, the index for 'Textiles' group declined by 0.4 percent to 141.7 (provisional) from 142.2 (provisional) for the previous month. The index for 'Paper & Paper Products' group declined by 0.6 percent to 155.9 (provisional) from 156.8 (provisional), the index for 'Beverages, Tobacco & Tobacco Products' group declined by 0.1 percent to 221.7 (provisional) from 221.9 (provisional), the index for 'Leather & Leather Products' group declined by  0.2  percent to 145.5 (provisional) from 145.8 (provisional) and the index for 'Machinery & Machine Tools' group declined by 0.1 percent to 135.2 (provisional) from 135.3 (provisional) for the previous month.

For the month of August, 2016, the final Wholesale Price Index was revised upward to 183.3 as compared to 183.1 (provisional) and annual rate of inflation based on final index at 3.85% as compared to 3.74% (provisional) respectively.

The CNX Nifty ended at 8097.45, down by 198.85 points or 2.40% after trading in a range of 8093.20 and 8288.55. There were 12 stocks advancing against 39 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bank of Baroda up by 8.38%, Idea Cellular up by 1.93%, SBI up by 1.87%, TCS up by 1.77% and Dr. Reddy’s Lab up by 1.38%. (Provisional)

On the flip side, Tata Motors down by 9.33%, Grasim Industries down by 9.27%, Tata Motors - DVR down by 8.90%, IndusInd Bank down by 8.08% and Tata Steel down by 7.84% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 61.52 points or 0.91% to 6,814.70, Germany’s DAX increased 0.69 points or 0.01% to 10,694.38 and France’s CAC increased 16.71 points or 0.37% to 4,525.26.

Asian equity markets ended mostly in red on Tuesday on a rising dollar, falling oil prices and the extended weakness of the yuan that kept underlying sentiment somewhat cautious. China's yuan hit its lowest level in nearly eight years as the dollar remained strong on expectations of faster growth, higher US inflation and interest rates under President-elect Donald Trump. Chinese shares ended lower as investors await October FDI figures due out later in the day. Japanese shares ended marginally lower in choppy trade as investors took profits from sharp gains in the past few days, offsetting gains in banking stocks, which rose on better-than-expected half-year earnings.