Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day and ended the session with gains of around eight tenth of a percent. Intense buying kept the Indian markets on a high note through the morning session, with the Nifty holding on to 10,000-mark. The equity benchmarks made a firm start and traded in fine fettle in early deals as traders took encouragement with report that Direct Tax collections in the first five months of the current fiscal grew 17.5% to Rs 2.24 lakh crore, mainly on account of income tax mop-up from individuals. This is 22.9% of the total budget estimates of direct taxes, which comprise personal income and corporate tax, for the current financial year. Some support also came with Former Reserve Bank of India (RBI) governor Raghuram Rajan’s statement that reviving stalled projects and a thrust on infrastructure will be the key to India reaching the 8% economic growth in the short-term. He added that India should focus on removing the bottlenecks on all stalled projects in order to achieve 8-9% growth.

Meanwhile, global rating agency ARC Ratings, in its latest report has affirmed the ‘BBB+’ rating to the India and maintained a stable outlook on expectation of a strong economic growth. The rating agency also affirmed its ‘A-’ foreign currency and ‘A’ local currency country ceilings for the country. It has said that a solid outlook for economic dynamism continues to drive the sovereign ratings and added that India continues to enjoy solid economic performance and a strong medium term growth outlook, with real GDP growing 7.1% in FY2017. Investors also took note that the government expects a double-digit improvement in India’s rank in the global index on ease of doing business, likely to be announced by the World Bank next month. Separately, as the American economy is surging ahead with a firm recovery, the USA is ranking as India’s number one destination for engineering products with shipments aggregating $2.9 billion between April and July period of the current fiscal, according to EEPC India data.

On the global front, Asian markets closed in green, with investors breathing a sigh of relief as North Korean fears eased slightly and the worst-case scenario from Hurricane Irma looked to have been avoided. China’s producer price inflation accelerated more than expected to a four-month high in August, fueled by strong gains in raw materials prices and pointing to strong, sustained growth for both factory profits and the economy. The European markets were trading mostly in green as stock markets in Asia and in the United States hit record highs. British inflation hit its joint highest in more than five years in August as households paid more for fuel and clothing, complicating the Bank of England’s job this week of explaining why it is not raising interest rates.

Back home, auto stock were buzzing after data released by industry body Society of Indian Automobile Manufacturers (SIAM) showed that passenger vehicle sales grew 14% year on year at 2,94,335 units in August, while two-wheeler sales hit a record 18,91,062 units, beating the previous monthly high of 18,68,952 posted in September 2016.

The BSE Sensex ended at 32137.14, up by 254.98 points or 0.80% after trading in a range of 31950.24 and 32172.46. There were 25 stocks advancing against 6 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.12%, while Small cap index was up by 0.99%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.17%, Oil & Gas up by 1.75%, Healthcare up by 1.67%, Industrials up by 1.38% and PSU up by 1.20%, while there were no losers on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 3.36%, Sun Pharma up by 3.28%, Tata Steel up by 2.98%, Tata Motors - DVR up by 2.93% and Mahindra & Mahindra up by 2.54%. (Provisional)

On the flip side, Wipro down by 1.15%, Hero MotoCorp down by 0.94%, ONGC down by 0.86%, NTPC down by 0.53% and Power Grid down by 0.30% were the top losers. (Provisional)

Meanwhile, raising concerns over weak capital positions in Indian banking system, global rating agency, Fitch ratings in its latest report has said that the Public Sector banks may need around $65 billion of additional capital by March 2019 to meet the new Basel-III capital norms. However, this latest estimated amount of capital requirement is lower than previous estimation done by the rating agency at $90 billion, on account of asset rationalisation and weaker-than-expected loan growth.
Fitch ratings also expressed need to address issue to avoid negative influence of weak capital positions on Indian banks' Viability Ratings, stating that state banks have limited options to raise the capital they still require and are likely to be dependent on the state to meet core capital requirements.

The rating agency further noted weak prospects for internal capital generation, pointing that low investor confidence impedes access to the equity capital market. Besides, the report found improvement in access to the additional Tier-I (AT1) capital market in recent months, on the other hand it found that around two-thirds of the capital shortage is in the form of common equity Tier-I (CET1).

Fitch ratings is expecting release of capital from the Non-performing loan (NPL) resolution process, which is being led by the Reserve Bank of India (RBI), if recovery rates are high in line with banks and the government expectations.

The CNX Nifty ended at 10087.55, up by 81.50 points or 0.81% after trading in a range of 10028.05 and 10097.55. There were 41 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 4.34%, GAIL India up by 3.85%, Tata Motors up by 3.53%, Sun Pharma up by 3.42% and Bank of Baroda up by 3.38%. (Provisional)

On the flip side, IndusInd Bank down by 2.83%, Wipro down by 1.06%, Hero MotoCorp down by 0.75%, ONGC down by 0.61% and Indiabulls Housing down by 0.50% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 66.81 points or 0.54% to 12,542.05, France’s CAC increased 29.05 points or 0.56% to 5,205.76 and UK’s FTSE 100 decreased 14.54 points or 0.2% to 7,399.05.

Asian equity markets ended higher on Tuesday amid receding worries about Hurricane Irma and North Korea as the enormous storm weakened and the UN Security Council unanimously steeped up sanctions against North Korea for its latest missile and nuclear tests. Japanese shares hit their highest level in a month as a weaker yen bolstered exporters and financials also gained ground in the wake of sharp gains in US bond yields and lower-than-expected damage from Hurricane Irma. Chinese shares inched higher, although gains remained modest ahead of August industrial output, retail sales and fixed-asset investment data due this week.