Post Session: Quick Review

Indian equity benchmarks traded in green throughout the session but ended on a flat note ahead of the expiry of December series F&O contracts. Though the firm trade prevailed for most part of the day but last hour of trade dragged the benchmarks near neutral line. Oil prices extended strong overnight gains amid thinning pre-New Year holiday trade, less than a week before major global oil producers begin to scale back production in line with the deal they struck last month. Back home, the markets traded in fine fettle in early deals tracking positive trend seen in Asian markets and as Wall Street was up supported by upbeat consumer and housing data. The sentiments got a push with NITI Aayog Vice Chairman Arvind Panagariya’s statement that demonetisation was a move towards formal economy. Panagariya complementing the demonetisation process added that it is the government’s drive to promote digital transactions and a less cash economy so as to move from the informal to greater formalization of the economic system. Besides, expressing their support for the November 8 demonetisation of high-value currency that has resulted in a major cash crunch, a group of experts told Prime Minister Narendra Modi that the move helped to strengthen the process of formalizing the Indian economy, the major part of which is organized informally. Traders were looking for some clues of Prime Minister’s meeting with economists and experts, to take stock of the economy and get feedback on ways to deal with the problem of cash crunch post demonetisation. Reportedly 4-5 sectoral groups have been set up to discuss new initiatives and Budget proposals. The mandate is to come up with concrete suggestions to neutralise the adverse impact of demonetisation, push growth with a special focus on employment generation and promote farm productivity. Prime Minister Narendra Modi’s 50-day demonetisation drive ends on December 30 and there are expectations of tax sops from the government to boost the economy.

Selling crept in on reports that of the Rs 15.4 lakh crore worth of Rs 500 and Rs 1,000 notes that were scrapped as a resulted of PM Narendra Modi’s November 8 declaration, as much as Rs 14 lakh crore has been deposited in banks. The value of scrapped currency exceeded the government’s expectation that as much as Rs 3 lakh crore will not be returned as this would be part of black money hoards. This also means that expectation that RBI will be able to give a substantial dividend to the government will be belied. Traders took cautious approach with MVK Murthy, National President of All-India Federation of Tax Practitioners (AIFTP) statement that the Goods and Services Tax (GST) is not something that consumers could care to wait for as tax practitioners foresee a higher tax burden initially. The federation felt that implementation of GST from April 1, 2017 is not possible and it might happen in September.

On the global front, Asian markets ended mostly in green. Japan’s stock exchange closed flat in red, as losses in the Rubber, Pharmaceutical Industry and Transport sectors led shares lower. The Bank of Japan has led Prime Minister Shinzo Abe’s effort to stimulate the world’s third-biggest economy, but its often innovative steps have yet to end decades of falling prices and feeble growth. European stocks were trading mostly in red in light post-holiday trade on Wednesday, with Italian banks led decliners on ongoing concerns about the future of Banca Monte dei Paschi di Siena. Holiday trade continued with London traders coming back to their desks for the first time after their long Christmas holiday.

The BSE Sensex ended at 26197.77, down by 15.67 points or 0.06% after trading in a range of 26191.72 and 26415.05. There were 17 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.58%, while Small cap index was up by 0.93%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 0.55%, TECK up by 0.32%, Realty up by 0.28%, Consumer Durables up by 0.25% and IT up by 0.21%, while Capital Goods down by 0.31%, Oil & Gas down by 0.21%, Power down by 0.03% and PSU down by 0.02% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 2.14%, Wipro up by 1.36%, Dr. Reddy’s Lab up by 0.90%, Lupin up by 0.63% and ITC up by 0.51%.  (Provisional)

On the flip side, Power Grid down by 1.13%, Reliance Industries down by 0.98%, Tata Steel down by 0.95%, Hero MotoCorp down by 0.89% and Larsen & Toubro down by 0.67% were the top losers. (Provisional)

Meanwhile, Prime Minister Narendra Modi has said that the government’s plan of advancing budget a month early will ensure speedier implementation of projects and make funds available for different sectors at start of fiscal year. While emphasizing about the budget cycle, PM said that the budget has a significant effect on India's real economy and in our existing budget calendar, the authorization of expenditure comes with the onset of the monsoon. This results in government programmes being relatively inactive in the productive pre-monsoon months. Keeping this in view, the date of budget presentation is being advanced, so that the government will able to complete the budgeting process before the start of the new financial year.

Breaking old tradition to form a more planned and regulated expenditure profile, the government is proposing to present the budget for 2017-18 on February 1 instead of the regular date of February 28. Also, there will be no separate railway budget for the next fiscal as the government has decided to merge it with the general budget.
Responding to the PM's call for suggestions for the Budget, economists have given their suggestions to a range of issues covering subjects such as agriculture, skill development, job creation, taxation and tariff related matters, education, digital technology, housing, tourism, banking, governance reform, data driven policy and future steps for growth.

The CNX Nifty ended at 8036.75, up by 3.90 points or 0.05% after trading in a range of 8028.40 and 8100.55. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 2.44%, Coal India up by 2.18%, Idea Cellular up by 2.00%, IndusInd Bank up by 1.91% and Tech Mahindra up by 1.44%.  (Provisional)
On the flip side, Tata Motors - DVR down by 1.75%, Yes Bank down by 1.40%, Reliance Industries down by 1.27%, Hero MotoCorp down by 1.10% and Ambuja Cement down by 0.94% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 2.86 points or 0.02% to 11,469.38 and France’s CAC decreased 3.32 points or 0.07% to 4,844.96, while UK’s FTSE 100 increased 21.51 points or 0.3% to 7,089.68.

Asian equity markets ended mostly in green on Wednesday as many regional markets resumed trading after the long holiday. Higher oil prices and upbeat US consumer confidence and housing data too lent some support. Japanese shares ended on a flat note as the yen showed little reaction to mostly positive industrial production and retail sales data. While industrial output figures for November showed further signs of pick up in the world's third largest economy, retail sales rose more than expected to post a surprise 1.7 percent jump in November from a year earlier. Chinese shares ended lower, with sentiment dampened by a regulator's latest measures to put insurers' aggressive stock investments under stricter supervision. The vice chairman of the China Insurance Regulatory Commission (CIRC) had reportedly said that insurers were not platforms to enrich speculators.