Post Session: Quick Review

Indian equity benchmarks traded on a weak note throughout the day and ended in red for third consecutive session. Last hour of trade dragged the market to close near days low, with Nifty breaching 9900 mark. Geopolitical worries mainly weighed on the sentiments with remarks by President Donald Trump adding to concerns about rising tensions between the US and North Korea and after a car rammed into a group of soldiers in a Parisian suburb. The equity benchmarks made a pessimistic start and traded with a cut of around one third of a percent in early deals as traders continued to remain worried after yesterday capital market regulator SEBI directed exchanges to initiate action against 331 suspected shell companies. SEBI’s restrictions on trading in 331 stocks have impacted about 36 lakh investors. These include some big names, such as Rakesh Jhunjhunwala, DSP Blackrock, HDFC Mutual, Reliance Mutual and UTI among domestic investors. Foreign institutions like Goldman Sachs, Fidelity, Blackrock and Smallcap World too are holders of some of these stocks. Telecom stocks like Idea Cellular, Reliance Communications, MTNL and TTML closed in red on report that the telecom operators have failed to meet customer satisfaction benchmark. As per a survey conducted by the sector regulator TRAI across three circles -- Delhi, Madhya Pradesh and Karnataka, a majority of customers in these circles are dissatisfied by efforts of telecom operators to address the call drop issue and other major counts such as network signal, data speed, customer care service, overall telecom service by their service providers etc.

Investors shrugged off Finance Minister Arun Jaitley’s statement that the total expenditure of the government increased by 27 percent to over Rs 6.50 lakh crore in first quarter (April-June) of 2017-18, as a result of advancing the budget presentation by a month to February 1. He noted that the advancement of the Budget by a month was intended to utilize the full working season, including the Q1 FY18 to step up expenditure. Separately, sticking to its ‘normal’ monsoon forecast, the India Meteorological Department (IMD), the country’s national weather forecaster, has said that rainfall over the country during the second half of the monsoon season (August and September) is expected to be 100% of the benchmark long period average (LPA) with a model error of plus or minus 8%.

On the global front, Asian markets closed mostly in red, as heightened tensions on the Korean peninsula sent caution through markets. China’s annual producer price inflation held steady in July, with prices for key raw materials up slightly on expectations of deeper capacity cuts going into the winter months of heavy pollution, while consumer inflation slowed slightly. The European markets were trading in red after a car hit a group of soldiers in a Parisian suburb in what was said to be a deliberate act. It is the latest of several attacks targeting security forces guarding France over the past year.

Back home, majority of sugar stocks closed in red on reports that India may allow 200,000 tons of duty-free sugar to meet local demand, as production fell below consumption in 2016-17 marketing year ending on September 30. The world’s biggest sugar consumer had earlier allowed duty-free imports of 500,000 tonnes of the sweetener.

The BSE Sensex ended at 31745.65, down by 268.54 points or 0.84% after trading in a range of 31731.91 and 31967.28. There were 7 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.95%, while Small cap index was down by 1.89%. (Provisional)

The top losing sectoral indices on the BSE were Healthcare down by 4.09%, Industrials down by 2.03%, Auto down by 1.86%, Basic Materials down by 1.31% and Capital Goods down by 1.27%, while there were no gainers on BSE sectoral front. (Provisional)

The top gainers on the Sensex were NTPC up by 1.40%, ONGC up by 0.95%, Infosys up by 0.63%, Asian Paints up by 0.57% and HDFC up by 0.34%. (Provisional)

On the flip side, Sun Pharma down by 5.49%, Adani Ports & Special Economic Zone down by 4.32%, Tata Motors down by 3.44%, Cipla down by 3.16% and Dr. Reddy’s Lab down by 2.79% were the top losers. (Provisional)

Meanwhile, after a month of successful rollout of the Goods and Services Tax (GST), one of the biggest fiscal reforms in India since Independence, Union Power Minister Piyush Goyal has termed GST as a crucial, adding that it will promote transparency and a corruption free business environment in the country.

The Minister further noted that the new tax regime also aims to bring the informal sector under the ambit of formal economy as it keeps track of every transaction from end to end without leaving any uncertainty. Besides, highlighting the advantages of GST, he said that the tax base would increase owning to this new tax reform which will reduce the tax rates eventually and added that increased revenue from taxes would enable targeted spending towards the different sections of the society along with better infrastructure development.

Goyal further said that the GST would create a level playing field by removing discrepancies from the system with the help of technology.  He said that with creation of different tax slabs under the GST, the government has attempted to keep the tax on common goods lower or equal to earlier regime wherever possible to maintain affordability.

The CNX Nifty ended at 9899.20, down by 79.35 points or 0.80% after trading in a range of 9893.05 and 9969.80. There were 10 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 1.83%, NTPC up by 1.43%, Infosys up by 0.71%, Asian Paints up by 0.71% and ONGC up by 0.70%. (Provisional)

On the flip side, Aurobindo Pharma down by 6.06%, Sun Pharma down by 5.57%, Adani Ports & Special Economic Zone down by 4.53%, Cipla down by 3.44% and

Tata Motors down by 3.26% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 60.36 points or 0.8% to 7,482.37, Germany’s DAX decreased 153.37 points or 1.25% to 12,138.68 and France’s CAC decreased 89.2 points or 1.71% to 5,129.69.

Asian equity markets closed mostly lower on Wednesday due to selling pressure amid rising geopolitical tensions after US President Donald Trump warned that further threats from North Korea would be ‘met with fire and fury’. In response, North Korea said it was ‘carefully examining’ a plan to launch a missile strike on a US Naval Base in the Pacific. Japanese shares hit 2-1/2-month lows as the yen hit an eight-week high against the dollar and saw broad gains against other peers amid the latest bout of geopolitical tensions stemming from the Korean Peninsula. Further, Chinese shares ended lower amid concerns that regulators will continue to clamp down on debt risks, but strong gains in consumer staples left major indexes only slightly lower on the day. Consumer prices in China rose an annual 1.4 percent in July, the National Bureau of Statistics said today. That was shy of expectations for 1.5 percent, which would have been unchanged from the June reading. The bureau also said that producer prices advanced an annual 5.5 percent, missing forecasts for 5.6 percent which also would have been unchanged. Meanwhile, the Singapore market was closed for the National Day public holiday.