Post Session: Quick Review

Indian equity benchmarks traded on volatile note oscillating between positive and negative terrain to end the session in red. Last hour of selling in Metal, Power and Bankex stocks dragged the benchmarks in red, while Nifty closed below 8200 mark. The markets made a gap-up start and gave up almost all gains in early deals, as investors’ maintained cautious approach in reaction to news of OPEC’s agreement to cut production. OPEC ministers revealed the cartel has agreed to reduce production by about 1.2 million barrels to 32.5 million barrels a day. Following the announcements, the price for Brent crude futures, the international benchmark for oil prices, shot up over 10 percent. However, some support crept in after the Indian economy maintained its growth momentum and remained the world’s fastest growing major economy in the July-September quarter. Data released by the Central Statistics Office (CSO) showed the economy grew an annual 7.3 percent in the July-September quarter, marginally faster than previous quarter’s expansion of 7.1 percent, while it grew 7.6 percent in the July-September 2015-16. Some support was also witnessed after the growth in eight core sectors -- coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity, which comprise nearly 38% of the weight of items included in the Index of Industrial Production (IIP), accelerated to 6.6% in October 2016 compared to 3.2% in the corresponding month last year on the back of robust refinery and steel output. Selling got intensified on final hour of trade after the private report indicated that Indian factory activity decelerated sharply last month after Prime Minister Narendra Modi's currency crackdown led to a rationing of cash and cooled domestic consumption, new orders and production. The Nikkei/Markit Manufacturing Purchasing Managers’ Index fell to 52.3 in November from October's 54.4, its biggest month-on-month decline since March 2013.

On the global front, Asian markets ended in green, as regional manufacturing surveys beat expectations. China’s factories notched their strongest growth in activity in two years and Japanese firms’ order books rose in November, masking concern about the protectionist leanings of US President-elect Donald Trump and an OPEC-induced oil price rally. Factory surveys produced stronger purchasing manager index (PMI) numbers in China, Taiwan and Vietnam and while activity in Japan’s factories was still growing in November, the pace was slower than in October. European stocks were trading lower as political uncertainty in Italy continued to weigh on market sentiment. Italian citizens are set to vote on December 4 in a referendum on whether to overhaul their national constitution, which should help Prime Minister Matteo Renzi implement badly needed economic reforms.

Back home, telecom stocks Bharti Airtel, Idea Cellular, Reliance Communications and Tata Teleservices (Maharashtra) closed in red after an event today where Reliance Industries Chairman Mukesh Ambani said that the free services under Reliance Jio Welcome Offer have been extended till March 31, among other announcements related to the telecom venture. Shares of pharmaceutical companies like Dr. Reddy’s Laboratories, Cipla, Sun Pharmaceutical Industries, Aurobindo Pharma and Glenmark Pharmaceuticals closed in green on reports that the Delhi High Court set aside the Centre’s decision to ban 344 fixed dose combination (FDC) medicines.

The BSE Sensex ended at 26562.61, down by 90.20 points or 0.34% after trading in a range of 26540.82 and 26769.32. 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 1.12%, while Small cap index was down by 0.62%. (Provisional)

The sole gaining sectoral index on the BSE was FMCG up by 0.04%, while Metal down by 1.64%, Power down by 1.56%, Bankex down by 1.25%, PSU down by 0.98% and Realty down by 0.93% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 2.87%, ONGC up by 1.62%, Sun Pharma up by 1.58%, Dr. Reddy’s Lab up by 1.34% and Hero MotoCorp up by 1.26%. (Provisional)

On the flip side, Power Grid down by 3.73%, Asian Paints down by 3.08%, Tata Motors down by 2.41%, ICICI Bank down by 2.06% and Mahindra & Mahindra down by 2.02% were the top losers. (Provisional)

Meanwhile, India’s manufacturing sector growth lost its momentum in November after the government’s surprise move to demonetize high-value banknotes. The seasonally adjusted Nikkei India Manufacturing Purchasing Manger’s Index (PMI) - a composite single-figure indicator of manufacturing performance - was down to 52.3 in November from 54.4 in October. This latest reading is the biggest month-to-month decline since March 2013.

As per the report, most of the companies showed softer increase in order books, buying levels and output with inflation rates for both output charges and purchase costs eased since October. The upturn in new export orders also lost some momentum in November. Further, the survey panellists reported higher demand from domestic as well as external clients, but indicated that growth was hampered by the money crisis. Meanwhile, outstanding business increased for the sixth month running. The rate of backlog depletion was, however, modest and the weakest since June.

Even if companies continued to increase their quantities of purchases, the pace of growth slowed from October’s 14-month high. Respondents have listed money issues as the main reason for the weaker growth in input buying. Higher prices paid for a range of raw materials resulted in a further overall increase in input costs. Sector wise, the weakest performer on this front was consumer goods. As per the report, a reading above 50 in terms of manufacturing performance indicates expansion, while anything below it means contraction.

The CNX Nifty ended at 8194.10, down by 30.40 points or 0.37% after trading in a range of 8185.05 and 8250.80. There were 19 stocks advancing against 32 stocks declining on the index. (Provisional)

The top gainers on Nifty were Eicher Motors up by 3.15%, GAIL India up by 3.06%, Bharti Infratel up by 2.28%, Hero MotoCorp up by 2.08% and Sun Pharma up by 1.66%. (Provisional)

On the flip side, Idea Cellular down by 4.97%, Power Grid down by 4.01%, Asian Paints down by 3.08%, Hindalco down by 2.36% and Tata Motors down by 2.35% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 43.59 points or 0.64% to 6,740.20, Germany’s DAX decreased 78.09 points or 0.73% to 10,562.21 and France’s CAC decreased 26.62 points or 0.58% to 4,551.72.

Asian equity markets ended in green on Thursday, with a sharp rally in oil prices and encouraging Chinese data boosting investor sentiment. Energy stocks rallied across the region after oil prices climbed more than 9 percent overnight on news of OPEC's agreement to cut oil production for the first time in eight years. Non-OPEC Russia has also joined output cuts for the first time in 15 years. Chinese shares ended higher as two separate manufacturing surveys provided further evidence of a strengthening economy. China's official manufacturing PMI stood at 51.7 in November, up from 51.2 in October and showing expansion for the fourth straight month. The latest reading marks the highest level seen since July 2014. While the non-manufacturing PMI rose to 54.7 from 54 in October, the Caixin manufacturing PMI fell to 50.9 from 51.2 in October, staying out of contractionary territory for a fifth straight month. Further, Japanese shares rallied as the dollar climbed to a 9-1/2-month high versus the yen amid rising US bond yields on inflation expectations.