Post Session: Quick Review

Today’s session turned out to be uninspiring day of trade with equity benchmarks managing to end the session with gains of around quarter percent. The markets pared all gains and entered into red terrain in early deals on account of selling in front line blue chip counters. Indian rupee depreciated against dollar in early trade and hit lowest level since February 2016. Market sentiments for rupee continued to remain weak on hopes that the US President-elect Donald Trump’s proposed fiscal expansion may boost inflation, prompting the Fed to raise rates more aggressively than previously expected. Foreign Institutional Investors (FII) stood net sellers in domestic equity markets on Tuesday and sold shares worth of Rs 1,241.01 crore. Gross purchases and gross sales of FIIs stood at Rs 4,356.18 crore and Rs 5,597.19 crore, respectively. Investments in domestic capital markets through participatory notes (P-Notes) fell to its lowest level in two-and-half years to Rs 2 lakh crore in end-October. According to data available with SEBI, the total value of P-Notes investment in Indian markets -- equity, debt and derivatives -- fell to Rs 1,99,987 crore in October-end, from Rs 2,12,509 crore at the end of September. Fitch Ratings stated that the demonetisation of old Rs 500 and Rs 1,000 notes will raise revenue for the government but warned that the positive effects of the move are unlikely to be strong and long-lasting to support credit profiles. It said the withdrawal of bank notes, accounting for 86% of the value of currency in circulation, has created a cash crunch and seems to be holding back economic activity. Separately, former Planning Commission Deputy Chairman Montek Singh Ahluwalia said that demonetisation is likely to pull down GDP growth by 1-2 percentage points as it is disrupting economic activities, especially in the informal sector.

Buying emerged as investors got some confidence with Finance Minister Arun Jaitley's statement that banks are integrating their information technology system with RBI and GST Network as they prepare to handle tax deposits under the new indirect tax regime. Backing the government’s decision to demonetise higher-value currency notes, Niti Aayog CEO Amitabh Kant said that the country is moving towards a totally digitised payment system that will accrue huge gains in the long-term for the economy. Some support also came with Agriculture Minister Radha Mohan Singh’s assurance that sowing of rabi crops like wheat, pulses and oilseeds has not been affected due to banning of old Rs 500 and Rs 1,000 notes. Highlighting various steps taken to ease cash flow to farmers, the minister said farmers are allowed to buy seeds with old Rs 500 notes at government outlets as well as from agri varsities. He also said sowing area of wheat, pulses and oilseeds has been higher till November 18 of this rabi season compared with the year-ago period. The market may remain volatile tomorrow as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. November 2016 series to next month i.e. December 2016 series. The near month November 2016 derivatives contracts will expire on Thursday i.e. November 24, 2016.

On the global front, Asian markets ended mostly in green, as investors tried to share in the exuberance of Wall Street’s record run, while high US bond yields kept the dollar well underpinned. Japan’s Nikkei was closed for a holiday after enjoying a five-session winning streak that took it to the highest finish since January. Indonesia’s central bank will introduce rules next year to enhance its monetary operations and the efficiency of the country’s payment systems. European markets were trading mostly lower as markets were focusing on a string of manufacturing and service sector data from the euro zone.

The BSE Sensex ended at 26021.80, up by 61.02 points or 0.24% after trading in a range of 25877.16 and 26130.49. There were 19 stocks advancing against 11 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.25%, while Small cap index was up by 1.53%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.33%, Metal up by 2.13%, Consumer Durables up by 1.32%, Capital Goods up by 1.15% and IT up by 0.65%, while Bankex down by 0.13% was the sole losing indices on BSE. (Provisional)

The top gainers on the Sensex were Lupin up by 4.43%, Asian Paints up by 3.96%, Tata Steel up by 3.31%, NTPC up by 3.22% and Larsen & Toubro up by 1.81%. (Provisional)

On the flip side, Mahindra & Mahindra down by 2.25%, HDFC Bank down by 1.42%, HDFC down by 1.41%, Power Grid down by 1.39% and Bharti Airtel down by 1.25% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) has said that retail focus of banking sector helped the share of personal loans in total credit of scheduled commercial banks to increase to 19.3 per cent in June 2016 from 17.9 per cent in March 2016. Based on the ‘Quarterly BSR-1: Outstanding Credit of Scheduled Commercial Banks for June 2016’ data RBI said that the prime contributor to this up trend is the home loan segment.

According to the data, credit to industry grew at a slower pace of 5.2 percent and its share in total credit in the system increased to 41.6 percent from 40.4 percent. The Weighted Average Lending Rate (WALR) came down to 11.28 per cent in June 2016 from 11.34 per cent in March 2016 and it dropped by 0.41 per cent as compared to June 2015. The reduction is seen mainly in loans and advances categorised as professional other services (0.64 pc), industry (0.52 pc), housing (0.51 pc) and personal loans (0.37 pc).

The RBI said that the lenders blame both a lack of demand from corporates and concerns over credit quality for their focus on the retail segment, which has displayed resilience till now. It added that credit growth at private lenders which are better off from the asset quality troubles was higher while rural and semi-urban areas continued to grow at a faster pace than urban and metropolitan regions. Further, the data is the part of the quarterly BSR-1 which gives details on the outstanding credit of scheduled commercial banks on a variety of factors, comes amid a move away from the high-value corporate segment by lenders. The data cover performance by 91 banks from over 1.09 lakh outlets.

The CNX Nifty ended at 8028.35, up by 26.05 points or 0.33% after trading in a range of 7973.10 and 8055.20. There were 37 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Lupin up by 4.51%, Hindalco up by 3.93%, Asian Paints up by 3.55%, Tata Steel up by 3.16% and NTPC up by 3.05%. (Provisional)

On the flip side, Mahindra & Mahindra down by 2.39%, HDFC down by 1.57%, Bank of Baroda down by 1.38%, HDFC Bank down by 1.37% and Power Grid down by 1.17% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 41.01 points or 0.38% to 10,672.84, France’s CAC decreased 12.1 points or 0.27% to 4,536.25, while UK’s FTSE 100 increased 40.42 points or 0.59% to 6,860.14.

Asian equity markets ended mostly in green on Wednesday, helped by Wall Street's record run, even as the dollar's strength and rising bond yields implied faster-than-expected rate hikes by the Federal Reserve going forward. Oil prices traded slightly lower in Asian deals after reports that Iran and Iraq aren't ready to agree on an OPEC output freeze. Chinese shares ended slightly lower even as survey figures from MNI showed China's business sentiment picked up slightly in November after falling in the previous month. Markets in Japan were closed for Labor Thanksgiving Day.