Post Session: Quick Review

Final hour of selling dragged the equity benchmarks lower and ended session in red for the fourth straight consecutive day. The markets turned flat in early deals despite making a positive start as uncertainty remained about the economic impact of the government’s action last week to remove high-value banknotes from circulation. Investors’ sentiment has taken a hit after government decided to demonetize currency notes of Rs 500 and Rs 1,000 which they say will affect the earnings growth of India Inc going ahead. The government today announced some new measures to ease the cash crunch caused by the move, including allowing farmers to draw money from banks against loans sanctioned to them. Foreign Portfolio Investors (FPIs) stood net sellers in domestic equity markets on Wednesday as they sold shares worth of Rs 2325.70 crore. Gross purchases and gross sales of FPIs stood at Rs 9013.48 crore and Rs 11339.18 crore, respectively. The street failed to draw solace after Moody’s Investors Service assigned a positive outlook to India’s Baa3 rating in April 2015 to reflect views that India’s policymakers were establishing a framework that would likely allow the country’s growth to continue to outperform that of its peers over the medium term and improve its macro-economic, infrastructure and institutional profile to levels commensurate with a higher rating. Also a private report said that India’s bank note reform has pushed up deposit growth and boosted liquidity that may in turn depress inflationary pressures, failed to provide some upside support. Investors will be keeping an eye on Parliament winter session where the government is unlikely to bring three bills related to GST in the coming days, but it is hopeful of pushing them in the latter half of the winter session. Parliament would meet for 22 sittings between November 16 and December 16. Both Lok Sabha and Rajya Sabha will see discussions on de-monetisation and the opposition will seek to corner the government on the hardship faced by the Aam Admi in withdrawing their hard earned cash from banks.

On the global front, Asian markets ended mostly in green, while Japanese stocks ended flat as stocks were bought after the central bank first fixed rate debt purchasing operation. Japan’s Finance Minister Taro Aso stated that higher inflation could help the government repay debt as the country continues to push a 2% inflation target for the Bank of Japan despite missing such aims five times since it began aggressive easing in April 2013. European stocks were mostly higher, as markets eyed the release of final euro zone inflation data due later in the day. All eyes will also be on Janet Yellen as she speaks before congress today. Investors will be looking for signals on an expected December interest-rate hike, as well as the Fed chief's thoughts on Trump’s fiscal policies.

The BSE Sensex ended at 26236.79, down by 61.90 points or 0.24% after trading in a range of 26155.40 and 26449.87. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.26%, while Small cap index was down by 0.30%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 1.01%, Consumer Durables up by 1.01%, Realty up by 0.67%, Metal up by 0.64% and PSU up by 0.52%, while TECK down by 1.66% and IT down by 1.47% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 3.73%, Power Grid up by 2.37%, Cipla up by 1.74%, GAIL India up by 1.69% and NTPC up by 1.00%. (Provisional)

On the flip side, Bharti Airtel down by 3.54%, TCS down by 2.33%, Bajaj Auto down by 2.19%, Coal India down by 1.98% and Asian Paints down by 1.54% were the top losers. (Provisional)

Meanwhile, due to oppositions attack over demonetization issue, the government is unlikely to bring the three legislations related to the main Goods and Services Tax (GST) bill in the early days of the winter session of the parliament, though it is hopeful of passage of the three GST bills in the winter session, which are likely to be introduced in either third or fourth week of the session. 

The government is willing to push the passage of three GST bills, the Central Goods and Services Tax Bill, the Integrated Goods and Services Tax Bill and the Goods and Services Tax (Compensation for Loss of Revenue) Bill, in the ongoing winter session, as Parliamentary nod for these bills is must to roll out the new tax regime from April 1, 2017. 

The GST Council, which is headed by the Finance Minister Arun Jaitley and has representations from state, had already decided on a four-tier rate structure of 5, 12, 18 and 28 per cent with a cess over and above the peak rate for luxury and demerit goods, but is yet to decide on the issue of cross empowerment to avoid dual control.

The government has listed total nine bills which also includes Surrogacy (Regulation) Bill for introduction, consideration and passage. Apart from this, the government has listed 10 pending bills including HIV AIDS Prevention and Control bill, Mental Health Care bill, Maternity Benefit Amendment bill, Prevention of Corruption (amendment) bill and Consumer Protection bill for consideration and passing as these bills have already been introduced in Parliament.

The CNX Nifty ended at 8088.80, down by 22.80 points or 0.28% after trading in a range of 8060.30 and 8151.25. There were 24 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 3.56%, Tata Motors up by 3.17%, Tata Motors - DVR up by 2.17%, Power Grid up by 2.15% and GAIL India up by 1.59%. (Provisional)

On the flip side, Ambuja Cement down by 3.63%, Bharti Airtel down by 3.58%, Zee Entertainment down by 3.31%, TCS down by 2.54% and ACC down by 2.36% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 23.71 points or 0.35% to 6,773.43, France’s CAC increased 3.27 points or 0.07% to 4,504.41, while Germany’s DAX decreased 25.85 points or 0.24% to 10,638.02.

Asian equity markets ended mostly in green on Thursday, even after the Dow Jones Industrial Average broke its seven-day winning streak overnight and oil prices retreated on bearish inventory data from the US Energy Information Administration. Investors also looked ahead to Fed Chair Janet Yellen's speech later in the day for clues as to the direction of US interest rates. Chinese shares ended higher after official data showed China's foreign direct investment grew in the first ten months of the year. FDI rose an annual 4.2 percent to reach CNY 666.3 billion or around $97 billion in the January-October period. Japanese stocks ended marginally higher as stocks were bought after the central bank's first fixed-rate debt purchasing operation weakened the yen.