Post Session: Quick Review

Indian equity benchmarks traded in a narrow range throughout the session to close in red on Friday. The markets remained flat with a negative bias after factoring in all the recent events like demonetisation, Federal Reserve’s rate hike etc. Even the winter session of Parliament was non-event for the market as opposition parties disrupted proceedings due to currency demonetisation. The next earliest trigger would now be the earnings season, starting in the second week of January. Back on street, the market traded in red in early deals reacting to the report of widening trade deficit. India’s trade deficit widened to $13 billion in November from a provisional $10.16 billion last month, it’s the highest since $13.08 billion in July 2015, and sharply wider than the $10.41 billion gap in October. Though, for the third consecutive month, exports recorded a positive growth of 2.29 percent year-on-year to $20 billion, but imports grew at a faster pace of 10.4 percent to $33.02 billion. Some selling also crept in with industry body CII’s statement that India’s economic growth will see a ‘significant fall’ in the second half of the current fiscal on account of cash crunch following demonetisation. As far as corporate earnings are concerned, the consumer goods sector has seen sales drop by 20 percent in the last month. Banking stocks came under pressure after Moody’s Investors Service said the overall asset profile of property retail loan portfolio of banks is stable although risks are rising in the non-traditional loan against property segment. It expects the impact on the banks’ overall asset quality to be limited by the relatively small size of the LAP portfolio. The US-based agency expects that the withdrawal of 500 and 1,000 rupee notes in early November 2016 may further expose the weaknesses in this segment.

Traders failed to draw any solace on report that India remains one of the fastest-growing countries in the world, with real GDP expanding at 7.3 percent in the four quarters through 2016, the White House said even as it underlined that inefficiencies remain in the public sector of the country with the poor population still lacking healthcare coverage and access to financial services. NITI Aayog CEO Amitabh Kant stated that cash shortages following the demonetisation of high value currency notes will end by mid-January. Meanwhile, a latest data from SEBI showed that more than 1,700 new foreign portfolio investors (FPIs) have registered with capital markets watchdog SEBI in the first seven months of the current fiscal, a sign of their willingness to be a part of India’s growth story in the long term. FPIs consider India as a preferred and stable market, given its macro-economic stability, long-term growth prospects and ongoing economic and social reforms.

On the global front, Asian markets ended mostly in green, with dollar near a 14-year peak and bond yields highly elevated as global markets continued adjusting to the idea of higher US interest rates. China’s yuan firmed slightly against the dollar despite a weaker midpoint set by the central bank as efforts by authorities to shore up liquidity and confidence in money markets helped the currency step off from over eight-year lows hit the previous day. Japan’s Nikkei climbed to a one-year high on a weaker yen and gains on Wall Street overnight. European stocks were trading in red, as investors continued to digest the Federal Reserve’s most recent policy decision and eyed the release of final euro zone inflation data due later in the trading session.

The BSE Sensex ended at 26472.65, down by 46.42 points or 0.18% after trading in a range of 26455.21 and 26594.55. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.04%, while Small cap index was down by 0.31%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.53%, IT up by 0.51%, Auto up by 0.41% and TECK up by 0.29%, while Metal down by 1.58%, PSU down by 0.84%, Oil & Gas down by 0.82%, FMCG down by 0.72% and Bankex down by 0.47% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 1.70%, Cipla up by 0.95%, TCS up by 0.95%, Infosys up by 0.78% and HDFC up by 0.67%. (Provisional)

On the flip side, Bharti Airtel down by 2.97%, ONGC down by 2.30%, Adani Ports & Special Economic Zone down by 1.62%, ICICI Bank down by 1.59% and ITC down by 1.57% were the top losers. (Provisional)

Meanwhile, to stop the misuse of bank account for black money deposit, the Reserve Bank of India (RBI) has imposed certain restrictions on withdrawal if more than Rs 2 lakh has been deposited after November 9 in an account which has a balance of over Rs 5 lakh.

The RBI in its notification said that the PAN quotation will be mandatory for withdrawal and transfer of funds in bank accounts, otherwise submission of Form 60 will be required if person don’t have PAN card. The bank also said monthly withdrawal limit of Rs 10,000 will be maintained even if a 'small account' has witnessed increase in annual permissible deposit of Rs 1 lakh.It added that no debit transaction, transfer or otherwise shall be allowed in accounts which do not comply with the above mentioned requirements.

The RBI has imposed quotation of PAN and withdrawal restrictions in bank accounts after it was brought to the notice of the RBI that strict compliance with KYC (Know Your Customer) provisions is not being ensured in some cases. In view of this, RBI advised, banks and NBFCs to ensure compliance regarding quoting of PAN/obtaining of Form 60 for all transactions. The apex bank also said that it has issued elaborate instructions to all the bank management to do central data checking and whenever they find any inconsistency, it should be pursued further through their internal audit mechanism.

It added that RBI supervisors are also carrying out similar exercise on the various data points of banks and whenever any untoward transactions or action is noticed, due investigation would be done and then due action would be pursued.

The CNX Nifty ended at 8139.55, down by 14.05 points or 0.17% after trading in a range of 8127.45 and 8178.70. There were 19 stocks advancing against 32 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 1.98%, Bharti Infratel up by 1.44%, Infosys up by 1.23%, Bosch up by 1.23% and Zee Entertainment up by 1.19%. (Provisional)

On the flip side, Hindalco down by 3.46%, Ultratech Cement down by 2.96%, Bharti Airtel down by 2.78%, ONGC down by 2.35% and BHEL down by 1.99% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 3.29 points or 0.05% to 6,995.72, Germany’s DAX decreased 2.57 points or 0.02% to 11,363.83 and France’s CAC decreased 10.88 points or 0.23% to 4,808.35.

Asian equity markets ended mostly in green on Friday, following positive Wall Street close overnight even as investors were still digesting the latest decision by the US Federal Reserve. On Wednesday, the US central bank raised its benchmark interest rate by 25 basis points to between 0.50% and 0.75%, the second rate increase in a decade, and also hinted at three likely rate hikes in 2017, up from two previously. Japanese shares ended higher as the weakening yen helped shares of the country’s exporters. Meanwhile, Chinese policymakers are trying hard to curb capital outflows and spending the foreign exchange reserve to support the yuan, after the Fed's decision to raise rates. The People Bank of China set its currency's mid-point fix at 6.9508, marking the Chinese yuan's lowest point against the dollar since May 2008.