Indian benchmark indices failed to maintain early leads; ends with paltry gain

Indian benchmark indices extended their gains for yet another session on Tuesday, on account of fresh buying activities by both funds and retail investors amid mixed global cues. It turned out to be a rather volatile day of trade as what started on a promising note ended as a dismal show. Sentiments remained optimistic in thin trades triggered by the Commerce and industry minister Nirmala Sitharaman’s statement that the economy grew by 7.1% in the first half of 2016-17, though the central statistics office is yet to release Gross Domestic Product (GDP) data for the second (July-September) quarter. She added that the government has been taking various steps to boost industrial production and growth, which includes ‘Make in India’ and ‘Startup India’ initiatives, liberalisation of FDI (Foreign Direct Investment) policy and development of industrial corridors. Following Wednesday’s GDP data, which is due at 5:30 p m in New Delhi, attention will shift to a purchasing managers’ index due Thursday that will offer a first assessment of the impact on manufacturing. Services PMI is due on December 5 and the central bank will review interest rates December 7, 2016. Investors’ morale also remained upbeat with the report indicating that the Reserve Bank of India will lower its repo rate by 25 basis points to 6 percent in its next month monetary policy meeting. While global uncertainties and rupee volatility suggest first quarter of 2017 is a better time to ease rates, the central bank may bring forward the rate cut to December to support growth and tap favourable inflation outlook. Meanwhile, Auto and consumer durables stocks gained on the expectation that a faster end to the demonetisation drive could revive sales. RBI on  November 28 said lenders had received Rs. 8.45 lakh crore ($123.05 billion) in deposits, absorbing a substantial amount of the 500 and 1,000 rupee notes that were declared worthless earlier this month. The amount deposited, announced by the RBI, raised hopes that the demonetisation process would end sooner than expected reducing what has been a key constraint for markets.

On the global front, Asian stocks ended mixed on Tuesday as investors turned jittery ahead of key global events set to take place this week, including a meeting tomorrow of global oil producers and the release of the US non-farm payroll report this Friday. Investors’ sentiment were further dented by US market, which declined on Monday, for their worst performance in nearly a month, weighed down by a pullback in the financial and consumer discretionary sectors as some investors booked profits on the heels of a record-setting week. Furthermore, Japanese stocks dropped as stronger yen hurt sentiments and insurers took a breather from recent gains, while Chinese stocks ended higher on optimism that the Chinese economy will show further signs of recovery in November. Meanwhile, European markets were struggling for direction, with investors staying on the sidelines ahead of the closely watched OPEC meeting and the Italian referendum later in the week.

Back home, the local benchmark got off to an optimistic start, shrugging the sluggish sentiments prevailing in Asian markets post weak closing of US markets. The frontline indices managed to build on to the early gains in the first half of trade as they touched the intraday high level in the noon session. But the optimism soon started showing signs of easing in late hours of trade and profit booking in few sectors, weighed down the local bourses by the end of session. Finally the NSE’s 50-share broadly followed index Nifty, got buttressed by around two tenth of a percent to settle just below the crucial 8,150 support level, while Bombay Stock Exchange’s sensitive Index-Sensex accumulated over forty three points and closed near the psychological 26,400 mark. Moreover, broader markets managed a touch better than the larger peers as the BSE’s midcap and smallcap indices settled with gains of 0.53% and 0.55% respectively.

The market breadth remained optimistic as there were 1570 shares on the gaining side against 1028 shares on the losing side, while 199 shares remained unchanged.

Finally, the BSE Sensex gained 43.84 points or 0.17% to 26394.01, while the CNX Nifty rose 15.25 points or 0.19% to 8,142.15. 

The BSE Sensex touched a high and a low of 26587.07 and 26354.66, respectively and there were 18 stocks on gainers side against 12 stocks on the losers side on the index. The broader indices made a positive closing; the BSE Mid cap index ended higher by 0.53%, while Small cap index was up by 0.55%.

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 top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 3.96%, Asian Paints up by 2.17%, Bharti Airtel up by 2.11%, GAIL India up by 2.07% and Hero MotoCorp up by 2.05%. On the flip side, Axis Bank down by 1.59%, Sun Pharma Inds. down by 1.05%, ITC down by 0.99%, TCS down by 0.83% and Infosys down by 0.71% were the top losers.

Meanwhile, the country’s trade deficit with China has climbed to $52.69 billion in FY16 as compared to $ 48.48 billion in the FY15. The trade deficit during the April-September period of 2016-17 stood at $25.22 billion. India's import of bulk drugs from China stood at $1.63 billion in 2015-16, which constitutes 64 per cent of India's total bulk drug imports. Overall, India had imported such drugs worth $2.5 billion last fiscal.

Commerce and Industry Minister Nirmala Sitharaman has pointed that the trade deficit can be attributed mainly to the fact that Chinese exports to India are strongly dependent on manufactured items to meet the demand of fast expanding sectors like telecom and power. Minister also noted that, India is currently negotiating the Regional Comprehensive Economic Partnership (RCEP) trade agreement keeping in view its export interests as well as sensitivities pertaining to all other participating countries including China.

The minister added that efforts are being made to increase overall exports by diversifying the trade basket with emphasis on manufactured goods, services, resolution of market access issues and other non-tariff barriers. She further highlighted that both India and china are members of the World Trade Organization (WTO) and no blanket ban can be imposed on any member country under the WTO framework. Though, she said that efforts are being made for revival of (Active Pharmaceutical Ingredient) API industry to lessen dependency on import of key starting materials, intermediates and bulk drugs including from China.

The CNX Nifty traded in a range of 8,197.35 and 8,128.70. There were 32 stocks in green against 19 stocks in red on the index.

The top gainers on Nifty were Eicher Motors up by 5.18%, Idea Cellular up by 4.88%, Bosch up by 4.50%, Maruti Suzuki up by 4.30% and GAIL India up by 2.40%. On the flip side, Hindalco down by 1.74%, Axis Bank down by 1.52%, Sun Pharma down by 1.25%, BPCL down by 1.07% and ITC down by 1.03% were the top losers.

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.