Post Session: Quick Review

Indian equity benchmarks traded on a lackluster note oscillating between positive and negative terrain throughout the day and ended the session flat. Investors awaited the outcome of two-day Fed policy review scheduled later in the day. The equity benchmarks made an optimistic start in early deals as traders took note that the government may soon unveil a package of measures to speed up growth, generate employment, lift exports and step up investment in infrastructure. A broad framework to boost the economy was discussed in a meeting of ministers and officials chaired by finance minister Arun Jaitley late Tuesday evening as the government grappled with a slump in growth. There have been concerns over growth slumping to a three-year low of 5.7% in the April-June quarter with disruption due to the rollout of GST and the lingering impact of demonetization being the primary cause. Investors also took note of the report that prices’ of most food items are expected to be stable this festive season due to ample stocks and good global supply situation while sugar prices are likely to remain firm in the month ahead. Meanwhile, the upside was capped on SBI Research report stating that economy has been on a downslide since September 2016 and the slowdown is real and not technical, calling for more public spending to arrest the slide. The report advocated upping of spends by the government as a solution to the problem at hand.

Select steel stocks were buzzing after ICRA in its report highlighted that domestic steel firms will see improved profitability in near term. A 14% increase in domestic steel prices since June 2017, led by a sharp recovery in international steel prices and growth in domestic demand in the April-August period has brought much-needed cheer in the steel sector. Buoyant international steel prices have also led to a 57% year-on-year growth in exports during April-August 2017, helping the domestic steel industry operate at a capacity utilization of above 80% in the current financial year. Telecom stocks showed mixed trend as the Telecom Regulatory Authority of India (TRAI) has more than halved the interconnect usage charge (IUC) from October 1 and said the fee will be scrapped from 2020, in a move that it said would benefit consumers. IUC has been reduced to 6 paise a minute from 14 paise a minute and to zero starting January 1, 2020, based on the view that costs incurred by operators will drop. The decision saw TRAI coming down on the side of new entrant Reliance Jio Infocomm, while rejecting the arguments made by older telcos Bharti Airtel, Vodafone India and Idea Cellular.

On the global front, Asian markets closed mixed, ahead of a policy decision by the US Federal Reserve. Booming shipments of cars and electronics in August drove up Japan’s exports at the fastest pace in nearly four years, further evidence that overseas demand is strong enough to support healthy economic growth. The 18.1% annual increase in exports was the fastest since November 2013. The European markets were trading mostly in red, with rate-sensitive banking shares edging lower. British retail sales unexpectedly surged in August, boosting the chance the Bank of England will raise interest rates at its next meeting.

Back home, select tyre stocks closed in green as government has imposed anti-dumping duty on import of certain type of radial tyres used in buses and trucks to protect domestic manufacturers from below cost shipments from China for five years. The levy follows DGAD recommendation after Apollo Tyres, JK Tyre Industries and Ceat had approached it for investigations in dumping of tyres.

The BSE Sensex ended at 32410.45, up by 8.08 points or 0.02% after trading in a range of 32383.82 and 32499.88. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.14%, while Small cap index was down by 0.23%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 0.46%, Healthcare up by 0.25%, Energy up by 0.21% and FMCG up by 0.21%, while Auto down by 0.85%, Telecom down by 0.77%, Consumer Disc down by 0.64%, Consumer Durables down by 0.64% and Utilities down by 0.54% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Dr. Reddy’s Lab up by 4.06%, Tata Steel up by 1.66%, ITC up by 1.47%, ONGC up by 1.11% and Reliance Industries up by 1.01%. (Provisional)

On the flip side, Hero MotoCorp down by 2.50%, Tata Motors down by 2.10%, Sun Pharma down by 1.86%, Hindustan Unilever down by 1.79% and ICICI Bank down by 1.49% were the top losers. (Provisional)

Meanwhile, describing Goods and Services Tax (GST) as a ‘tectonic shift’, World Bank India chief Junaid Ahmad has said that India’s this bold step of integrating internally its nation into one market, has potential to boost the growth rate of the country if it is implemented efficiently and may take the county closer towards 8 per cent plus growth rate.

Junaid Ahmad, further highlighting the positive impact of GST, said that the economic corridors of India will change on the back of the new tax regime, though he expressed need transportation system, particular multi- modal, in order to respond what GST is offering as one market.

World Bank India chief also pointed that apart from reforms like GST, the country’s growth also depends on investment in the logistics, adding that if integration of India’s local markets are done correctly, the gains in next 5-8 years from the internal integration will outweigh those from global integration.

Besides, he said that the internal integration linked to the country’s port system can change the nature of growth of India. However, he raised his concern about India’s professional service delivery mechanism in the fields like water system, electricity, railway or solid waste management system, saying that the country is in high need of it and flagged optimal service delivery mechanism of basic infrastructure as one of the biggest challenges of the country now.

The CNX Nifty ended at 10139.85, down by 7.70 points or 0.08% after trading in a range of 10134.20 and 10171.05. There were 19 stocks advancing against 32 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.72%, Bank of Baroda up by 2.46%, Tata Steel up by 1.63%, ITC up by 1.47% and ONGC up by 1.24%. (Provisional)

On the flip side, BPCL down by 2.45%, Hero MotoCorp down by 2.32%, Tata Motors down by 2.15%, Ambuja Cement down by 2.14% and Sun Pharma down by 1.90% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 1.67 points or 0.02% to 7,273.58, Germany’s DAX decreased 23.97 points or 0.19% to 12,537.82, while France’s CAC increased 4.31 points or 0.08% to 5,241.75.

Asian equity markets ended mixed on Wednesday following positive overnight cues from Wall Street and Europe. Investors adopted a cautious stance ahead of the US Federal Reserve's monetary policy decision due later in the day, with many expecting no change in interest rates. That said, the accompanying statement may offer the details of how the central bank plans to start shrinking its $4.5 trillion balance sheet. Chinese stocks ended higher amid optimism that Beijing will maintain stability in financial markets ahead of next month's key party congress meeting. Japanese shares closed on a flat note as investors digested upbeat exports data and the yen went into a consolidation mode ahead of the Bank of Japan's (BoJ) monetary policy meeting, scheduled Thursday.