Post Session: Quick Review

Indian equity benchmarks traded jubilantly throughout the day and ended in green. Investors eyed President-elect Donald Trump’s news conference scheduled later in the day for any clues to his policies on tax, fiscal spending, international trade and currencies. Being the world’s largest economy, a firming growth in US could boost demand globally. Traders took support with Prime Minister Narendra Modi’s statement that India is on threshold of becoming most digitized economy in the world. While he also declared his ambition to bring about a paradigm shift through a series of historic changes, reiterating the government’s commitment to reforms and projecting India as a bright spot amid global gloom after having emerged as the world's fastest-growing economy.

Some support also came with Finance Minister Arun Jaitley reiterating that the Centre is still aiming to roll out the Goods and Services Tax (GST) regime from April 1 if all pending issues are sorted out. He said while most of the issues have been resolved, there are a few critical issues that still need to be addressed. Jaitley stressed that India needs bold decisions and that time has come to clean up the table. Demonetisation is going to have an impact over the course of our present and future lives. After transient impact, demonetisation will lead to cleaner and larger GDP. Revenue Secretary Hasmukh Adhia enlightened that GST will usher in a very simple and less burdensome taxation regime as it will be a single rate indirect tax which can be paid by debit/credit cards, cheque and NEFT. He said, GST will make it easier for traders and industry to access Input Tax Credit and also ease compliance burden as the entire country will become a single market.

On the global front, Asian markets closed mixed, as investors eyed the first full press conference by President-elect Donald Trump since the November election. Trump has vowed to label China a currency manipulator on his first day in office and has threatened to slap huge tariffs on imports from China. Hong Kong shares extended their recent rally into a fifth successive day as investors brushed off another loss on Wall Street. European markets were trading mostly in green with retail stocks back in focus.

The BSE Sensex ended at 27118.61, up by 219.05 points or 0.81% after trading in a range of 26978.44 and 27174.87. There were 25 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.35%, while Small cap index was up by 0.92%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 4.39%, Bankex up by 2.36%, PSU up by 1.76%, Capital Goods up by 1.16% and Power up by 0.99%, while IT down by 0.08% was the sole losing index on BSE sectoral front. (Provisional)

The top gainers on the Sensex were Coal India up by 5.56%, Tata Steel up by 3.85%, Lupin up by 2.24%, ICICI Bank up by 1.81% and Power Grid up by 1.69%. (Provisional)

On the flip side, Bajaj Auto down by 1.09%, ITC down by 0.76%, Reliance Industries down by 0.47%, Wipro down by 0.31% and Infosys down by 0.16% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI), in its 7-page note to the Parliament's Department-Related Committee of Finance headed by Congress leader M Veerappa Moily, has stated that the government, on November 7, 2016, advised RBI to consider withdrawal of the legal tender status of the notes in high denominations of Rs 500 and Rs 1,000 in order to mitigate the triple problems of counterfeiting, terrorist financing and black money. Further, the report said that the RBI's Central Board met the very next day to consider the government's advice and decided to recommend that the legal tender status of the banknotes in the high denominations to be withdrawn.

On the other hand, RBI has said that immediately it might not be possible to replace Rs 500 and Rs 1000 notes fully in terms of both value and volume on one to one basis, within a specific time. However, the stock of Rs 2000 denomination was arriving in RBI offices and was being dispatched to currency chests across the country and that could enable meeting a significant critical portion of the physical demand there from in value terms.

In the note to the panel, RBI also said it had been in the last few years working on introduction of new series of banknotes with improved security features to secure them against counterfeiting. In parallel, the government had been taking steps to curb black money and combat terrorism. Further, it said that there were reports by intelligence and enforcement agencies that availability of high denomination banknotes made it easier for black money hoarders and counterfeited notes in high denominations were being used for terrorist financing.

According to the report, earlier, RBI had suggested to the government the need for introduction of 5,000 and 10,000 rupee notes, keeping in mind the inflation and the need for facilitating payments and managing the currency logistics. It said that the government concurred with the introduction of Rs 2000 notes on May 18, 2016. Government gave their final approval on June 7, 2016 and accordingly, the presses were advised in June 2016 to initiate production of new series notes. The report also revealed that no discussions regarding demonetisation were held during the May 2016, July 7 and August 11 Board meetings.

The CNX Nifty ended at 8374.30, up by 85.70 points or 1.03% after trading in a range of 8322.25 and 8389.00. There were 41 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indusind Bank up by 6.40%, Hindalco up by 6.30%, Coal India up by 5.66%, Bank of Baroda up by 4.25% and Yes Bank up by 3.99%. (Provisional)

On the flip side, Bajaj Auto down by 0.95%, HCL Tech down by 0.94%, ITC down by 0.82%, Reliance Industries down by 0.46% and ONGC down by 0.38% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 12.74 points or 0.18% to 7,288.21, Germany’s DAX increased 4.04 points or 0.03% to 11,587.34, while France’s CAC decreased 1.74 points or 0.04% to 4,886.49.

Asian equity markets ended mixed on Wednesday, as investors looked to US President-elect Donald Trump's press conference later in the day for clues on his policies. Trump's proposed tax cuts and spending plans could boost US and global growth, while uncertainty about his trade policies adds to the risks, the World Bank said in its latest outlook on the global economy. Japanese shares eked out modest gains as a weaker yen boosted exporters. Meanwhile, Chinese shares ended lower, pressured by an increase in equity supply and as investors took profits on state-owned stocks which had soared on reform hopes.