Indian markets snap four sessions winning streak; Nifty slips below 8200 mark

Indian benchmarks started the new month on a disturbing note as the benchmark equity indices failed to extend the four session northbound journey and settled with moderate cuts of over a quarter percent. It largely turned out to be a range bound session marred with high volatility as investors indulged in stock specific activities after country’s economy grew lower than expected in the September quarter at 7.3%, as compared to 7.6% registered during the same period last fiscal year.  The data indicate that the economy may witness the heavy impact of demonetisation in the third quarter and even some part of the fourth quarter. Adding anxiety among market percipients, 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. Furthermore, West Bengal Finance Minister Amit Mitra dropped a bombshell, by saying that the Goods and Service Tax (GST) would be difficult to implement from April next year. He claimed that PM Modi’s surprise announcement on November 8 has slowed down the economy and states are losing more money sooner than planned. Amendments related to GST are still pending in the Parliament. Proceedings in the House have been stalled with the opposition demanding Prime Minister Narendra Modi’s presence during the debate on demonetisation. Investors failed to draw any sense of relief with the report that the combined index of eight core industries surged to its six months high at 6.6 percent compared to October 2015, led by steel, cement and petroleum refinery. Meanwhile, shares of pharmaceutical companies edged higher after the Delhi High Court set aside the Centre’s decision to ban 344 fixed dose combination (FDC) medicines, while Indian jewellery stocks gained traction after reports of excise duty getting scrapped on branded gold coins. On the other hand, Telecom stocks like Idea Cellular, Bharti Airtel and RCom declined after Mukesh Ambani extended Reliance Jio’s free offers till March 2017. Billed as Jio Happy New Year Offer, every new Jio user starting 4 December 2016, will get Jio’s data, voice, video and the full bouquet of Jio applications absolutely free till March 31, 2017.

On the global front, Asian markets ended higher on Thursday, with Japan’s Nikkei at its highest close this year, after major oil-producing nations signed a deal to cut crude oil output. OPEC agreed on Wednesday its first oil output reduction since 2008 after de-facto leader Saudi Arabia accepted 'a big hit' and dropped a demand that arch-rival Iran also slashed output. The deal also included the group's first coordinated action with non-OPEC member Russia in 15 years. Investors’ also cheered data that showed China's manufacturing sector continued to expand at faster rate in November. China’s official manufacturing purchasing managers index rose to 51.7 from October’s 51.2, while official non-manufacturing PMI also increased to 54.7 in November from 54.0 in October. Further, Japanese exporter stocks got a boost after better-than-expected private US jobs data sent the US dollar back to a nine-month high against the yen. However, European markets were trading lower in early deals as investors focused on political developments in Italy.

Back home, Indian markets got off to a soft start as the indices showed signs of consolidation in early trade, a session after the awe-inspiring close to a percent rally. Thereafter, the indices kept oscillating in a narrow range through the day’s trade. The selling pressure accentuated in the final hour of trade as investors took to across the board risk aversion, dragged the key indices to the lowest point in the session. Finally, the NSE’s 50-share broadly followed index Nifty, suffered a cut of over a quarter percent to settle below the crucial 8,200 support level, while Bombay Stock Exchange’s Sensitive Index-Sensex- slipped around hundred points and closed below the psychological 26,600 mark. Moreover, the broader markets too finished on a daunting note with over half percent losses, underperforming their larger peers by a flat margin. On the BSE sectoral front, the Metal pocket bore the maximum brunt of selling pressure as it got thrashed by over one and half a percent, followed by the Power, Banking and Realty indices, which too went home with hefty losses of over a percent.

The market breadth remained pessimistic as there were 1118 shares on the gaining side against 1562 shares on the losing side while 136 shares remained unchanged. Finally, the BSE Sensex declined by 92.89 points or 0.35% to 26559.92, while the CNX Nifty dropped 31.60 points or 0.38% to 8,192.90.

The BSE Sensex touched a high and a low of 26769.32 and 26540.82, respectively and there were 15 stocks on gainers side against 15 stocks on the losers side on the index.

The broader indices made a negative closing; the BSE Mid cap index ended lower by 1.15%, while Small cap index was down by 0.64%.

The only gaining sectoral indices on the BSE were FMCG up by 0.18% and Capital Goods up by 0.04%, while Metal down by 1.69%, Power down by 1.57%, Bankex down by 1.16%, Realty down by 1.11% and PSU down by 0.96% were the top losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.87%, ONGC up by 1.65%, Sun Pharma Inds. up by 1.62%, Dr. Reddys Lab up by 1.34% and Hero MotoCorp up by 1.26%. On the flip side, Power Grid down by 3.73%, Asian Paints down by 3.18%, Tata Motors down by 2.44%, Mahindra & Mahindra down by 2.19% and ICICI Bank down by 2.13% were the top losers.

Meanwhile, the Indian economy maintaining its growth momentum 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. The rise was on the back of healthy growth in agriculture, which grew an annual 3.3 percent during Q2 compared to 1.8 percent expansion in the previous quarter. Manufacturing sector growth slowed to 7.1% in July-September compared to 9.1% expansion in April-June quarter.

As per CSO data, the GDP at constant (2011-12) prices in Q2 of 2016-17 is estimated at Rs 29.63 lakh crore, as against Rs 27.62 lakh crore in Q2 of 2015-16, showing a growth rate of 7.3 percent.  Quarterly GVA at Basic Price at constant (2011-12) prices for Q2 of 2016-17 is estimated at Rs 27.33 lakh crore, as against Rs 25.52 lakh crore in Q2 of 2015-16, showing a growth rate of 7.1 per cent over the corresponding quarter of previous year.

Quarterly GVA at basic prices for Q2 of 2016-17 from ‘agriculture, forestry and fishing’ sector grew by 3.3 percent as compared to growth of 2.0 percent in Q2 2015-16. Quarterly GVA at basic prices for Q2 of 2016-17 from ‘mining and quarrying’ sector declined by (-) 1.5 percent as compared to growth of 5.0 percent in Q2 of 2015-16. Also, the Quarterly GVA at basic prices for Q2 of 2016-17 from ‘manufacturing’ sector grew by 7.1 percent as compared to growth of 9.2 percent in Q2 of 2015-16. Quarterly GVA at basic prices for  Q2 of 2016-17 from  ‘Electricity, Gas, water supply and other utility services’  sector  grew by 3.5 percent as compared to growth of 7.5 percent in Q2 of 2015-16.  While, Quarterly GVA at basic prices for Q2 of 2016-17 from ‘Construction’ sector grew by 3.5 percent as compared to growth of 0.8 percent in Q2 of 2015-16.

GDP at current prices in Q2 of 2016-17 is estimated at Rs 36.43 lakh crore, as against Rs 32.49 lakh crore in Q2 of 2015-16, showing a growth rate of 12.1 percent. GVA at basic price at current prices in Q2 of 2016-17, is estimated at Rs 33.42 lakh crore, as against Rs 30.02 lakh crore in Q2 of 2015-16, showing an increase of 11.3 percent.

Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs 21.78 lakh crore in Q2 of 2016-17 as against Rs 19.37 lakh crore in Q2 of 2015-16.  At constant (2011-12) prices, the PFCE is estimated at Rs 16.26 lakh crore in Q2 of 2016-17 as against Rs 15.11 lakh crore in Q2 of 2015-16. Government Final Consumption Expenditure (GFCE) at current prices is estimated at Rs 5.15 lakh crore in Q2 of 2016-17 as against Rs 4.27 lakh crore in Q2 of 2015-16. At constant (2011-2012) prices, the GFCE is estimated at Rs 3.84 lakh crore in Q2 of 2016-17 as against Rs 3.33 lakh crore in Q2 of 2015-16. Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 9.86 lakh crore in Q2 of 2016-17 as against Rs 10.19 lakh crore in Q2 of 2015-16. At constant (2011-2012) prices, the GFCF is estimated at Rs 8.58 lakh crore in Q2 of 2016-17 as against Rs 9.09 lakh crore in Q2 of 2015-16.

The CNX Nifty traded in a range of 8,250.80 and 8,185.05. There were 19 stocks in green against 32 stocks in red on the index.

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 Pharmaceuticals Industries up by 1.71%. 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.

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.