Post Session: Quick Review

Indian equity benchmarks traded on a volatile note with negative bias for most part of the day and ended the session with modest cut. The market breath was in favour of declines with one stock advancing against every two declining ones. The equity benchmarks witnessed a sell-off in early deals as traders remained cautious on mixed global cues, though US Fed forecasts only two rate increases in 2019 and one in 2020, but it would stick to the schedule for normalizing balance sheet by trimming its bond portfolio from October. Back home, there were concerns with report that advance tax payments by top corporate for September quarter has increased only marginally. Separately, a survey found that optimism level among India’s Chief Financial Officers during July-September touched a one and half year low amid concerns related to subdued demand and strain on corporate balance sheet. The Composite CFO Optimism Index for the September quarter of this year declined by 11% year-on-year and by 5.7% on a quarter-on-quarter basis. Optimism among the CFOs deteriorated more for the financial performance of their companies compared to overall macroeconomic conditions. Some support crept in with an aim to revive India’s GDP growth that has decelerated to the slowest pace in three years, Finance Minister Arun Jaitley hinted a package of measures, while nearly ruling out any cut in duties on petroleum products to check the spike in fuel prices. However, he refused to reveal details and said that the measures would be announced soon, after consulting Prime Minister.

On the global front, Asian markets closed mostly in red, digesting the Fed views on rates and the latest Bank of Japan review. The Bank of Japan held policy steady as expected after the conclusion of it two-day meeting, with an asset buying program focused on the yield curve at 80 trillion yen annually. The European markets were trading in green as banking shares drove the bourses higher. German’s Finance Ministry said that the country’s economy weakened at the start of the third quarter after a strong performance in the first half of the year, but indicators suggest its solid growth will continue.

Back home, Coffee Day Enterprises closed in red on reports of raid by Income Tax Department at the company’s locations and its Chairman’s residence. Operations were underway in about 24 places, including Mumbai, Chennai and Chikmagalur. Search operations were also underway at the residence of VG Siddhartha, Chairman and Managing Director of the Cafe Coffee Day. Den Networks closed in green as it has received NCLT nod for demerger of its broadband undertaking with its wholly owned subsidiary.

The BSE Sensex ended at 32372.72, down by 27.79 points or 0.09% after trading in a range of 32164.42 and 32462.61. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.36%, while Small cap index was down by 0.54%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 2.70%, IT up by 0.24%, Telecom up by 0.14% and TECK up by 0.03%, while Realty down by 2.54%, Consumer Durables down by 1.67%, FMCG down by 0.91%, Utilities down by 0.89% and PSU down by 0.87% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Dr. Reddy’s Lab up by 7.45%, Cipla up by 4.13%, Lupin up by 2.97%, Sun Pharma up by 2.48% and TCS up by 1.39%. (Provisional)

On the flip side, Tata Motors - DVR down by 2.24%, ICICI Bank down by 1.99%, Axis Bank down by 1.30%, ONGC down by 0.93% and Power Grid down by 0.85% were the top losers. (Provisional)

Meanwhile, despite global lull in the automotive sector, the Indian car sales are likely to remain robust, global credit rating agency, Moody's Investors service in its latest report has said that the sales of Indian car industry will grow at 9 per cent in 2017 and 7 per cent next year, aided by Goods and Services tax (GST) regime coupled with new model launches.

The rating agency further said that the new tax regime had prompted a number of automakers to lower prices of their passenger vehicles, which had encouraged dealer to restocking and led to a subsequent boost in sales. Moody's is also expecting India’s auto sales to touch 3.6 million unit mark in 2017.

The report further noted that in key markets like China, Japan and India, the steady global GDP growth will drive a bigger demand for cars, while US car sales may weaken and may hamper growth of auto sector globally. Moody's further predicted that China’s auto sales will grow 3 per cent this year and 2 per cent in 2018, while Japanese car sales will grow by a robust 5.6 per cent this year and 2 per cent next year. It also said that automotive demand is poised to bounce back in Brazil, Argentina and Russia as their respective economies emerge from recession.

The CNX Nifty ended at 10123.60, down by 17.55 points or 0.17% after trading in a range of 10058.60 and 10158.90. There were 18 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddy’s Lab up by 7.57%, Cipla up by 3.91%, Lupin up by 2.67%, Tech Mahindra up by 2.53% and Sun Pharma up by 2.46%. (Provisional)

On the flip side, GAIL India down by 2.55%, Zee Entertainment down by 2.53%, Indiabulls Housing down by 2.19%, ACC down by 2.12% and HCL Technologies down by 2.02% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 4.43 points or 0.06% to 7,276.38, Germany’s DAX increased 38.6 points or 0.31% to 12,607.77 and France’s CAC increased 28.85 points or 0.55% to 5,270.51.

Asian equity markets ended mostly lower on Thursday, while the dollar strengthened after the US Federal Reserve struck a hawkish tone by signaling another rate hike this year. The Fed also announced that it would begin shrinking its $4.5 trillion balance sheet starting October. The dollar hit a two-month high versus the yen as Fed officials projected one more 25 bps rate hike by the end of the year and the Bank of Japan maintained the status quo in line with market expectations. Chinese shares ended a tad lower as losses in the realty and material sectors overshadowed gains in financials. However, Japanese shares inched higher as the yen eased on the back of a hawkish Federal Reserve. Investors also heaved a sigh of relief as the Bank of Japan kept its monetary policy steady and maintained its upbeat view of the economy, saying that exports have been on an increasing trend. The markets in Indonesia are closed for the Islamic New Year.