Post Session: Quick Review

Indian equity benchmarks closed in red with cut of around one percent on account of various domestic and global factors. The selling pressure picked up pace and was visible across the sectors which dragged the indices below key support level. The losses extended for the seventh day in a row - the longest losing streak in 21 months- as worries about the impact of demonetisation continue to weigh on market sentiments. After a mixed Q2FY17, the street is bracing for a dull December quarter. Earnings recovery was considered one of the big factors that could have tilted the direction of the street but the demons of demonetisation could hurt sentiment. Foreign portfolio investors (FPIs) continued their relentless sell-offs and sold domestic equities worth Rs 1178.08 crore on December 21, 2016. Investments in domestic capital markets through Participatory Notes (P-Notes) plunged to its lowest level in nearly three years to Rs 1.79 lakh crore in end-November. According to the data available with SEBI, the total value of P-Notes investment in Indian markets -- equity, debt and derivatives -- fell to Rs 1,79,648 crore in November-end, from Rs 1,99,987 crore at the end of October. This was the lowest level since February 2014 when the cumulative value of such investments stood at Rs 1, 72,738 crore.

The markets were trading under pressure in early deals with Prime Minister Narendra Modi’s top economic adviser Bibek Debroy’s statement that the negative shock from demonetisation will last until the end of March, though he also said that improved growth next year should fully compensate for the loss. The minutes of last rate-setting meeting of the Reserve Bank of India’s monetary policy committee (MPC) showed that it shifted its focus towards inflation, while playing down concern about economic growth. The minutes showed that all members expressed concern over rising risk from global oil prices and domestic non-oil and non-food inflation. Chief Executive Officer of NITI Aayog Amitabh Kant’s statement that just one percent of India’s more than 1.25 billion population pays Income Tax and the country cannot afford as high as 95 percent of its economy making cash transactions. Selling intensified after Nomura report highlighted that damage to India’s economic growth is likely to be bigger than the RBI’s estimates, as there could be a sharper slowdown in the near-term as cash shortage is likely to extend into the first quarter of next year. The report also added that November’s CPI readings suggest that demonetisation contributed 25-30 bps to the fall in headline CPI inflation via lower perishable item prices, slightly more than the RBI’s estimate of 10-15 bps and most core inflation measures eased by 20 bps in November.

On the global front, Asian markets ended mostly in red, with investors looking to US economic data later in the day for potential catalysts. The market volumes have began to thin out in the run-up to the Christmas holidays with many investors sitting on the sidelines. Many major markets in Asia will remain close on Monday (and a few on Tuesday as well) to observe Christmas, though Japan and China will remain open. Japan’s cabinet approved a record $830 billion spending budget for fiscal 2017 that counts on low interest rates and a weak yen to limit borrowing, underscoring the challenge Tokyo faces in curbing the industrial world’s heaviest debt burden. The European markets were trading mostly in green; with traders beginning to unwind positions ahead of the Christmas holiday.

The BSE Sensex ended at 26002.26, down by 240.12 points or 0.92% after trading in a range of 25940.14 and 26248.45. There were 6 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.39%, while Small cap index was down by 1.22%. (Provisional)

The losing sectoral indices on the BSE were Metal down by 2.73%, Consumer Durables down by 1.99%, Power down by 1.65%, Capital Goods down by 1.63% and PSU down by 1.46%, while there were no gainers. (Provisional)

The top gainers on the Sensex were Tata Motors up by 0.69%, ITC up by 0.53%, Asian Paints up by 0.42%, TCS up by 0.31% and Wipro up by 0.26%.  (Provisional)
On the flip side, Adani Ports & Special Economic Zone down by 3.56%, ONGC down by 2.95%, Bharti Airtel down by 2.91%, Tata Steel down by 2.69% and NTPC down by 2.20% were the top losers. (Provisional)

Meanwhile, to encourage digital transactions, the Finance Ministry has directed all public sector banks (PSUs) to reduce their fees for various transactions above Rs 1000 settled through various digital modes up to March 31, 2017. It said that PSUs shall not charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above Rs 1,000, with service tax being charged at actuals.

Ministry added that for Unstructured Supplementary Service Data (USSD) transactions above Rs 1,000 a further discount of 50 paise on these rates shall apply. USSD is mobile short code message and used mainly for banking services on feature phone. The USSD fee is Rs 1.50, which has been waived till December 30, 2016. As per Reserve Bank of India (RBI) norms, NEFT transactions between Rs 10,000 and less than Rs 1 lakh attract a fee of Rs 5, those between Rs 1 lakh and Rs 2 lakh attract a fee of Rs 15, and the fee for transactions above Rs 2 lakh is Rs 25. RBI has also rationalised the Merchant Discount Rate (MDR) for debit card transactions up to Rs 2,000 for the 3-month period.

To promote digital transaction, Niti Aayog had announced two schemes - Lucky Grahak Yojana and Digi Dhan Vyapar Yojana’. The schemes cover small transactions between Rs 50 and Rs 3,000. Earlier, the Centre announced a bevy of measures to boost digital transactions, including a waiver of service tax on digital payments amounting to less than Rs 2,000, discounts on petrol and diesel purchases, suburban railway tickets and insurance policies bought from state owned insurance companies through electronic means.

The CNX Nifty ended at 7987.20, down by 74.10 points or 0.92% after trading in a range of 7964.95 and 8046.45. There were 6 stocks advancing against 45 stocks declining on the index. (Provisional)

The top gainers on Nifty were Asian Paints up by 0.82%, ITC up by 0.62%, Bharti Infratel up by 0.48%, Tata Motors up by 0.42% and Eicher Motors up by 0.21%. (Provisional)

On the flip side, Hindalco down by 4.27%, Adani Ports & Special Economic Zone down by 3.72%, ONGC down by 3.10%, Bharti Airtel down by 2.72% and Tata Steel down by 2.57% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 2.01 points or 0.02% to 11,470.65 and France’s CAC increased 4.72 points or 0.1% to 4,838.54, while UK’s FTSE 100 decreased 6.28 points or 0.09% to 7,035.14.

Asian equity markets ended mostly in red in thin pre-Christmas trade on Thursday, following a slide in US stocks. Dow Jones Industrial Average failed yet again to reach the 20,000 mark overnight and ended in the red. While, oil prices firmed after falling overnight for the first time in a week as the EIA report showed an unexpected build in US oil inventories. Japanese shares ended down from a one-year high as caution set in ahead of a slew of US economic reports due out later in the day and a market holiday in Japan on Friday for the Emperor's birthday. However, Chinese shares bucked the trend and gained marginally as strength in shares of state-owned enterprises (SOE) was offset by persisting tight liquidity in the wake of a bond scandal.