Post Session: Quick Review

Indian equity benchmarks traded on a volatile note and below neutral line for most part of the day and ended the session with modest cut. Though, major indices recovered after slipping in early trade. The market breath was in favour of advances, with three stocks advancing against two declining ones. The Indian rupee hit a 6-month low against the US dollar as foreign investors continued pulling out of Indian debt and equities on unfavourable cues from both India and abroad. The benchmarks made a cautious start and traded slightly in red on back of a fresh flare up in tensions between the US and North Korea. North Korean foreign minister Ri Yong Ho, speaking in New York, described President Donald Trump’s recent comments about North Korea as clearly a declaration of war, and said Pyongyang has the right to shoot down US bombers. Sentiments remained dampened after Asian Development Bank (ADB) trimmed its growth forecast for South Asia to 6.7 percent this year and 7.0 percent next year, compared with estimates of 7.0 percent and 7.2 percent made in July. India’s growth was seen at 7.0 percent and 7.4 percent for this year and next, weaker than the July forecasts of 7.4 percent and 7.6 percent. ADB added that long-term interest rates in many Asian economies are closely linked to those in the US, policymakers need to strengthen their financial positions further and monitor debt levels and asset prices. Meanwhile, a report highlighted that the revenue from Goods & Services Tax (GST) implemented from July 1 slowed down in August compared with July. As of September 25, the government has collected GST of Rs 80,000-85,000 crore against Rs 95,000 crore earlier. Out of Rs 80,000-85,000 crore, Rs 15,000 crore collection was from integrated GST on imports.

Investors took note that India’s total production of Kharif Foodgrains, comprising rice, pulses and coarse cereals, is estimated to decline by 2.78 percent to 134.67 million tonnes (MT) in the kharif season of 2017-18 (ending October), mainly on account of poor rains as well as floods in some parts of the country. The country had produced a record 138.52 MT in the kharif season of 2016-17 on good monsoon rains. Investors shrugged off the report that Prime Minister Narendra Modi constituted an Economic Advisory Council in a bid to bring in economic reforms. NITI Aayog member and a former professor at the Centre for Policy Research, Bibek Debroy has been appointed as Chairman of Economic Advisory Council. It will address issues of macroeconomic importance’ and present its views to the prime minister. The market may remain volatile as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. September 2017 series to next month i.e. October 2017 series. The near month September 2017 derivatives contracts will expire on Thursday i.e. September 28, 2017.

On the global front, Asian markets closed mostly lower, against the backdrop of rising tensions on the Korean Peninsula. Japanese manufacturing activity expanded in September at the fastest pace in four months as domestic and export orders picked up, in a sign of strengthening demand. The European markets were trading mostly in green. According to a report hopes for higher wage growth across Britain are receding, apart from in a few sectors of the labor market that suffer from acute skill shortages.

Back home, oil marketing companies as well as aviation stocks were under pressure in today’s trade following sharp rally in crude oil prices in international markets in previous session. Any rise in crude oil prices is always bad for oil retailers as well as aviation companies because the cost goes up but oil exploration companies always benefit from the same as it means more income.

The BSE Sensex ended at 31545.85, down by 80.78 points or 0.26% after trading in a range of 31455.65 and 31693.59. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.30%, while Small cap index was up by 0.98%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.70%, Metal up by 2.24%, Basic Materials up by 1.03%, Industrials up by 0.31% and Auto up by 0.21%, while Telecom down by 1.17%, FMCG down by 0.55%, TECK down by 0.50%, Consumer Durables down by 0.35% and IT down by 0.21% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 3.50%, Tata Steel up by 2.23%, Axis Bank up by 1.74%, Hero MotoCorp up by 1.39% and Lupin up by 1.28%. (Provisional)

On the flip side, Hindustan Unilever down by 2.76%, Dr. Reddy’s Lab down by 2.34%, Asian Paints down by 2.28%, TCS down by 1.32% and Bharti Airtel down by 1.07% were the top losers. (Provisional)

Meanwhile, Asian Development Bank (ADB) has lowered Indian economic growth forecasts, amid weakness in private consumption, manufacturing output and business investment. In its latest ‘Asian Development Outlook (ADO) 2017’ release, ADB has slashed the country’s growth forecast to 7 per cent in financial year 2017-18 from the July forecast of 7.4 per cent. The regional development bank also lowered forecast for the next financial year to 7.4 per cent from earlier forecast of 7.6 per cent.

The report further said that investment in India is expected to remain muted in the current fiscal year due to budgetary constraints limit government expenditure. Besides, the regional development bank lowered its inflation estimates to average 4 per cent in the current year and 4.6 per cent in the next, down from the previous estimates of 5.2 per cent and 5.4 per cent, respectively.

ADB however pointed that India would remain one of the world's most dynamic emerging economies despite short term disruptions like last year’s demonetisation move and newly implemented Goods and Services tax (GST) regime. It further expects that Private consumption may pick up on the back of low inflation and anticipated wage hikes and said manufacturing would also improve as the sector adjusts to the new tax regime. ADB is also expecting improvement in tax collections on the back of GST.

The CNX Nifty ended at 9854.75, down by 17.85 points or 0.18% after trading in a range of 9813.00 and 9891.35. There were 23 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Vedanta up by 3.54%, ONGC up by 3.31%, Indiabulls Housing up by 2.95%, Tata Steel up by 2.39% and Axis Bank up by 2.19%. (Provisional)

On the flip side, Bharti Infratel down by 3.92%, BPCL down by 3.83%, Tata Power down by 2.44%, Hindustan Unilever down by 2.42% and Asian Paints down by 2.17% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 26.59 points or 0.21% to 12,621.40, France’s CAC increased 2.65 points or 0.05% to 5,269.78, while UK’s FTSE 100 decreased 6.86 points or 0.09% to 7,294.43.

Asian equity markets ended mostly lower on Tuesday as investors adopted a cautious stance amid heightened tensions surrounding the Korean Peninsula. North Korea's top diplomat said on Monday that a weekend tweet by US President Donald Trump will be counted as a declaration of war and North Korea has the right to take counter measures, including shooting down US bombers, even in international space. Japanese shares slipped from a two-year high as a stronger yen weighed on exporters and tech stocks also moved lower, tracking losses among their US peers overnight. Prime Minister Shinzo Abe said at a news conference Monday that he will dissolve the lower house of parliament on Thursday and call a snap election for next month. The minutes from the Bank of Japan's July monetary policy committee meeting showed that policymakers like to stick with their current policy framework despite the recent developments in consumer inflation being relatively weak. Overseas economies are growing steadily, leading to a bump in exports, the minutes added. Meanwhile, Chinese shares steadied in thin activity, after three days of losses, as investors sought beaten-down property developers and resource firms.