Post Session: Quick Review

Indian equity benchmark traded on volatile note and ended the session with marginal gains. Last hour of selling in IT, FMCG and Bankex stocks dragged benchmarks from day’s high and closed just above the neutral line. The markets made a positive start in early deals after government informed that the Indian economy grew at 7.1 percent in the first six months of the current financial year despite subdued growth in the world economy. The Commerce and Industry Minister Nirmala Sitharaman has said that India has maintained a Gross Domestic Product (GDP) growth rate of 7.1 percent during April to September of 2016-17 over 7.6 percent in 2016-16 and 7.2 percent in 2014-15. The Organization for Economic Cooperation and Development (OECD) in its semi-annual report lifted its global growth forecasts for 2017 and predicted expansion in 2018 will reach its fastest pace in half a decade as Donald Trump’s planned fiscal stimulus provides a boost to major economies. The Paris-based organization expects India's growth rates to hover above 7.5 percent over the 2017-18 period but many emerging market economies will continue to grow at a more sluggish pace.

Some selling crept in after the Fitch ratings in its latest report lowered India’s Gross Domestic Product (GDP) growth forecast to 6.9% in FY17 from 7.4% on demonetisation. The rating agency said that economic activity will be hit in 4Q16 by the cash crunch created by withdrawal and replacement of bank notes that account for 86% of the value of currency in circulation. Market participants also remained cautious ahead of important domestic macro data like India’s GDP, fiscal deficit and eight core industrial output data scheduled to be released on November 30. Rather than highlighting how far India’s economy has come under Prime Minister Narendra Modi’s pro-growth administration, the gross domestic product report will underscore just how much there is to lose from his shock clampdown on cash. The impact on GDP growth is clearly going to be negative in the short run and depends to a large extent on how long the cash crunch is going to take.

On the global front, Asian markets ended mixed, with Tokyo in red on disappointing data on household spending. In Japan, household spending for October fell 1.0% month-on-month, compared to a 0.1% gain seen, and at a minus 0.4% pace year-on-year, compared to a 0.6% fall expected for the eighth straight drop. European shares were mostly trading in green with investors focused on talks between OPEC members and the political uncertainty ahead of a key referendum in Italy.

The BSE Sensex ended at 26394.01, up by 43.84 points or 0.17% after trading in a range of 26354.66 and 26587.07. There were 18 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.53%, while Small cap index was up by 0.55%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 2.20%, Consumer Durables up by 0.93%, Realty up by 0.26% and Capital Goods up by 0.26%, while IT down by 0.51%, FMCG down by 0.47%, Bankex down by 0.39%, Metal down by 0.17% and TECK down by 0.08% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 4.25%, Bharti Airtel up by 2.19%, GAIL India up by 2.07%, Hero MotoCorp up by 2.05% and Mahindra & Mahindra up by 1.88%. (Provisional)

On the flip side, Axis Bank down by 1.60%, Sun Pharma down by 1.23%, NTPC down by 1.03%, Infosys down by 0.78% and TCS down by 0.76% were the top losers. (Provisional)

Meanwhile, the public debt of the central government rose 3 percent in the July-September quarter compared to the previous quarter. Trading volumes of government securities jumped 78.45 percent in the second quarter of this year as compared to previous quarter. As per the government’s Quarterly Report on Debt Management for July-September 2016, the Public Debt (excluding liabilities under the ‘Public Account’) of the central government provisionally increased by 3 percent in second quarter of 2016-17 on quarter-on-quarter basis. The total volume of the transactions stood at Rs 56.69 lakh crore in the last quarter compared to a volume of Rs 31.77 lakh crore during the quarter preceding it.

The report said that internal debt constituted 92.3 percent of public debt as at end-September 2016, while marketable securities accounted for 83.4 percent of public debt. About 26.2 percent of outstanding stock had a residual maturity of up to 5 years, which implies that over the next five years, on an average, around 5.6 percent of outstanding stock needs to be rolled over every year. Thus, the report said that the rollover risk in debt portfolio continues to be low. The implementation of budgeted buyback/switches in coming months is expected to reduce rollover risk further.

Further, during the second quarter of the fiscal, the government issued dated securities worth Rs 1.76 lakh crore, taking gross borrowings during first half of 2016-17 to Rs 3.41 lakh crore, or 56.8 percent of Budget Estimate (BE), vis-a-vis 58.5 percent of BE in first half of 2015-16. According to the report, G-sec yields declined sharply across the curve during the quarter, with 10 year segment gaining the most, on the back of softening of crude prices, increase in risk appetite globally after sharp correction post Brexit, passage of GST Bill by Upper House of Parliament, liquidity easing measures of RBI, expectation of rate cut from RBI, etc.

The CNX Nifty ended at 8142.15, up by 15.25 points or 0.19% after trading in a range of 8128.70 and 8197.35. There were 30 stocks advancing against 21 stocks declining on the index. (Provisional)

The top gainers on Nifty were Eicher Motors up by 5.34%, Idea Cellular up by 4.55%, Maruti Suzuki up by 3.97%, Bosch up by 3.93% and GAIL India up by 2.51%. (Provisional)

On the flip side, Hindalco down by 1.82%, Axis Bank down by 1.74%, Sun Pharma down by 1.21%, BPCL down by 1.15% and ITC down by 1.13% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 21.22 points or 0.2% to 10,603.89, France’s CAC increased 35.88 points or 0.8% to 4,546.27, while UK’s FTSE 100 decreased 29.38 points or 0.43% to 6,770.09.

Asian stocks ended mixed on Tuesday as the oil price volatility ahead of Wednesday's OPEC meeting and concerns over Sunday's referendum in Italy kept investors' appetite in check. Market jitters over whether producer cartel OPEC would be able to hammer out a meaningful output cut during a meeting on Wednesday, aimed at reining in a global supply overhang, sending oil and gas stocks lower throughout the Asia on Tuesday. With Brexit causing economic uncertainty and Europe bracing for major elections in France and Germany, European Central Bank president Mario Draghi on Monday warned that a long period of low interest rates has created 'fertile terrain' for financial-market risks. Japanese stocks dropped as stronger yen hurt sentiments and insurers took a breather from recent gains, despite the release of Japanese government data hinting at stabilization in domestic demand. Japan's seasonally adjusted unemployment rate was steady in October at 3 percent, the same level as August. Meanwhile, Chinese stocks ended higher on optimism that the Chinese economy will show further signs of recovery in November.