Post Session: Quick Review

Indian equity benchmarks wiped off entire gains on account of selling in the final hour of trade. The markets made a positive start and traded in fine fettle in early deals on account of positive macro-economic data. Retail inflation on the back of easing food and fuel prices eased to 14-month low of 4.20 percent in October this year, strengthening the case for RBI rate cut next month. The easing inflation prompted industry chamber FICCI to demand reduction in interest rate to support investors as well as consumers sentiment. Industry demand for rate cut comes after data showed that factory output in the April-September period declined by 0.1% compared to 4% growth in the year-ago period. The all-powerful Monetary Policy Committee headed by RBI Governor Urjit Patel last month cut benchmark interest rates by 0.25% to 6.25%. The next RBI policy review is on December 7. Separately, exports continued to grow for the second month in a row, expanding by 9.59 percent to $ 23.51 billion in October on healthy growth in shipments of jewellery and engineering products. Though, imports too increased by 8.11 percent to $ 33.67 billion, leaving a trade deficit of $ 10.16 billion in the month under review. Investors would be keeping an eye on Parliament winter session which commenced from today. The Centre had lined up three key Goods and Service Tax (GST) Bills for approval to roll out the new tax from April 1 next year even as the demonetisation move threatens to swamp the winter session of Parliament. Parliament would meet for 22 sittings between November 16 and December 16. The legislative agenda included nine Bills for introduction and approval, 10 pending Bills for passing. Two Bills are listed for withdrawal.

Investors are also trying to gauge the impact on company profits, after Modi's surprise recall of high-value currency notes last week. The recent carnage in the domestic equity market hit investors of realty, auto and consumer durables stocks the most, as total market capitalization of BSE Realty index, BSE Auto index and BSE Consumer Durables index tumbled by Rs 1.43 lakh crore in last four trading sessions. Textile and leather, which are labour-intensive industries, are facing the heat of centre’s decision to demonetise the Rs 500 and Rs 1,000 currencies. Companies are not able to pay wages to workers and not able to procure raw materials.

On the global front, Asian markets closed mixed, tracking a rally in Wall Street shares as the sell-off in global bonds and sharp gains in the dollar paused for now. Investors are awaiting remarks by Fed Chair Janet Yellen this week with market views widely expecting a rate hike in December. European stocks were trading lower; the US dollar paused for breath after a rally that has been driven by a rise in bond yields following Donald Trump’s victory in the presidential election. The rise in inflation expectations that followed Trump’s win sparked a sell-off in bonds and pushed the dollar higher.

Back home, cigarette companies like ITC, Godfrey Phillips India and NTC Industries ended in red on reports that government may have complete ban on FDI in tobacco sector. Minor selling was witnessed in IT sector stocks after NASSCOM lowered the IT export revenue growth forecast. It cuts growth guidance of IT sector to 8-10% from 10-12% stating that it is seeing only deferral of deals and no major cancellation.

The BSE Sensex ended at 26269.27, down by 35.36 points or 0.13% after trading in a range of 26239.21 and 26621.40. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.59%, while Small cap index was up by 0.08%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 1.60%, TECK up by 1.57%, Auto up by 0.92% and Power up by 0.23%, while Consumer Durables down by 1.98%, FMCG down by 1.32%, Metal down by 1.26%, Oil & Gas down by 0.94% and Bankex down by 0.93% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Asian Paints up by 5.36%, TCS up by 3.20%, Maruti Suzuki up by 3.04%, HDFC up by 2.34% and Bajaj Auto up by 1.76%. (Provisional)

On the flip side, ITC down by 4.04%, Cipla down by 3.03%, Sun Pharma down by 2.74%, Lupin down by 2.72% and GAIL India down by 2.39% were the top losers. (Provisional)

Meanwhile, rising for the second month in a row, India’s merchandise exports stood at $ 23512.70 million, up by 9.59 percent in month of October 2016, as compared to $ 21456.11 million in October 2015, primarily due to healthy growth in shipments of jewellery and engineering products. In rupee term the exports during the month stood at Rs.156941.86 crore, which was 12.43% higher compared to Rs.139589.17 crore during October, 2015. Cumulative value of exports for the period April-October 2016-17 was $ 154913.20 million as against $ 155179.35 million in October 2015-16, registering a negative growth of 0.17 per cent in Dollar terms, while in rupee terms it stood at Rs.1036417.49 crore compared to Rs.998211.69 crore over the same period last year, showing a positive growth of 3.83 per cent.

The country's imports too increased during the month and stood at $ 33673.53 million, up by 8.11 per cent as compared to at $ 31148.33 million in October, 2015. Cumulative value of imports for the period April-October 2016-17 was $ 208083.15 million as against $ 233417.95 million registering a negative growth of 10.85 per cent in Dollar terms, while in rupee terms it stood at Rs.1392221.35 crore against Rs.1501290.90 crore over the same period last year down by 7.27 per cent.

The trade deficit for October 2016 declined by 32.04 per cent to $ 53169.95 million as compared to $78238.60 million in October 2015. The main export sectors which recorded positive growth in the month included engineering products which rose by 13.86 percent, gems and jewellery by 21.84 percent, petroleum by 7.24 percent and chemicals by 6.65 percent compared to the same month last year.

Oil imports during October, 2016 were valued at $ 7141.48 million, up 3.98 percent from oil imports of $ 6868.28 million in the corresponding period last year. Oil imports during April- October, 2016-17 were valued at $ 46438.65 million, 15.78 per cent lower than the oil imports of $ 55139.39 million in the corresponding period last year. Non-oil imports during October, 2016 were estimated at $ 26532.05 million, 9.28 per cent higher than non-oil imports of $ 24280.05 million in October, 2015. Non-oil imports during April-October 2016-17 were valued at $ 161644.50 million, 9.33 per cent lower than $ 178278.56 million in April- October, 2015-16.

In September, exports grew by 4.62 percent to $ 22.9 billion on the back of expansion in shipments of engineering products and gems and jewellery, arresting the two-month fall. Exports were in negative zone between December 2014 and May 2016 due to weak global demand and slide in oil prices. Shipments witnessed growth only in June this year thereafter again entered into negative zone in July.

The CNX Nifty ended at 8094.45, down by 14.00 points or 0.17% after trading in a range of 8089.40 and 8210.05. There were 21 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Asian Paints up by 5.09%, Zee Entertainment up by 4.80%, Eicher Motors up by 3.91%, Tech Mahindra up by 3.25% and TCS up by 3.24%. (Provisional)

On the flip side, Hindalco down by 3.82%, Aurobindo Pharma down by 3.12%, Sun Pharma down by 3.09%, Ambuja Cement down by 2.88% and Dr. Reddy’s Lab down by 2.72% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 17.56 points or 0.26% to 6,775.18, Germany’s DAX decreased 35.17 points or 0.33% to 10,699.97 and France’s CAC decreased 13.41 points or 0.3% to 4,523.12.

Asian equity markets ended on a mixed note on Wednesday, as oil prices climbed on hopes for a last-minute OPEC deal and investors speculated that higher US interest rates can boost bank profits. Japanese shares ended higher as a weaker yen lifted exporters' shares and surging Japanese yields prompted investors to buy bank stocks. Market expectations that US President-elect Donald Trump's administration will increase spending and accelerate inflation, leading to higher interest rates, helped the dollar climb to a five-month peak against the yen overnight. Meanwhile, Chinese shares ended largely flat, with heavyweight resource stocks pegged back by fears that sharp falls in Chinese commodities futures markets could prompt regulators to tighten curbs to dampen volatility.