Post Session: Quick Review

India equity benchmark witnessed bloodbath in trade and ended the session in red for seventh straight day.  The volatility in the Indian market extended from the previous sessions with Nifty Bank closing at 10 month low. The market breath was in favour of declines, with just one stock advancing against five declining ones. The benchmarks after making a positive start turned red as sentiments were dampened after collections under the Goods and Services Tax (GST), the single indirect tax regime introduced for all of India on July 1 this year, dropped marginally to Rs 90,669 crore for August from the revised figure of Rs 94,063 crore for July. The collections for July were pegged at Rs 92,283 crore earlier. Of the total collections, the share of Central GST (CGST) stood at Rs 14,402 crore, State GST (SGST) at Rs 21,067 crore and Integrated GST (IGST) at Rs 47,377 crore. Separately, rating agency ICRA in its report enlightened that petrol and diesel prices have jumped 8% since daily price revision was implemented in mid-June, warning that a sustained price hike can hit demand growth and create inflationary pressures. The report added that the rise in fuel rates can be attributed to a 14% increase in international petrol and diesel prices beside rise in commission paid to petrol pump dealers.

Investors took note of report that the fiscal stress is more a result of excess spending thus far, which has not left much room for spending in the remaining months: it can rise only 1.5% y-o-y in August-March versus 23.1% in April-July to meet the FY18 budgeted spending target. Separately, Asian Development Bank (ADB) expects RBI to go for another round of rate cut in the latter part of 2017-18 in view of sluggish economic activities but does not see possibility of any major fiscal stimulus. Selling got accentuated on report that the Indian Army has conducted another surgical strike at Naga Insurgent Camp, Myanmar border. There was no casualty to Indian forces during surgical strike but there are heavy casualties at Naga Insurgent camp in Myanmar border. Some anxiety also spread among the investors as India has been ranked as the 40th most competitive economy -- slipping one place from last year's ranking -- on the World Economic Forum's global competitiveness index, which is topped by Switzerland.

Telecom stocks Bharti Airtel, Idea Cellular, Reliance Communications, MTNL and TTML closed in red after the telecom regulator rejected a request by operators for an additional six months to implement a new penalty regime for call drops, which is set to kick in from October 1. In new rules issued on August 18, TRAI set penalties of up to Rs 10 lakh per circle in a quarter on operators failing to meet voice quality benchmarks. Pharma stocks were under pressure after India Ratings and Research, a rating firm of Fitch Group highlighted that Indian pharma exporters’ road to recovery might still take time as weak economic and political conditions in Africa and currency volatility in Latin America (LATAM) are likely to weigh on the consumption of pharmaceutical formulations. This fluctuation is expected to put pressure on the medium term growth prospects for India’s exporters. 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 series. The near month September 2017 derivatives contracts will expire on Thursday i.e. September 28, 2017.

On the global front, Asian markets closed mixed. Profits at China’s industrial companies rose the most in four years in August as commodities prices surged, thanks to a government-backed construction boom that is helping Beijing trim high levels of corporate debt without tripping up the economy. European markets were trading in green on growing expectations of another rate hike in the United States before the year-end. British retail sales growth unexpectedly surged to a two-year high during the first part of this month, industry data showed, potentially giving the Bank of England confidence to raise interest rates as soon as November.

The BSE Sensex ended at 31174.63, down by 425.13 points or 1.35% after trading in a range of 31100.80 and 31797.46. There were 3 stocks advancing against 28 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.87%, while Small cap index was down by 2.06%. (Provisional)

The top losing sectoral indices on the BSE were Healthcare down by 2.57%, Realty down by 2.48%, Power down by 2.24%, Capital Goods down by 2.19%, Industrials down by 2.14%, while there were no gainers on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 1.01%, Coal India up by 0.27% and Bajaj Auto up by 0.08%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 4.61%, SBI down by 2.99%, Reliance Industries down by 2.71%, Sun Pharma down by 2.58% and ICICI Bank down by 2.46% were the top losers. (Provisional)

Meanwhile, falling one place in the World Economic Forum’s (WEF) latest Global Competitiveness Index, India has been ranked at 40th spot out of 137 countries surveyed, while Switzerland, the US and Singapore were ranked as the top three countries. Though, India has slipped from the 39th position to 40th, but WEF remained positive about India, saying that the country stabilises this year after its big leap forward of the previous two years. It also noted improvement across key competitiveness pillars like infrastructure, higher education & training and technological readiness.

The WEF’s report found improvement in ICT (information and communications technologies) indicators, particularly Internet bandwidth per user, mobile phone and broadband subscriptions, and Internet access in schools. The report added that the quality of institutions has increased further, especially in terms of efficiency of public spending, while noting concerns of private sector for doing business in India on the back of most problematic factor- corruption.

Among the BRICS, India came 3rd, below China and Russia. In South Asia, India has garnered the highest ranking, followed by Bhutan (85th rank), Sri Lanka (85), Nepal (88), Bangladesh (99) and Pakistan (115). On the list of 137 economies, other countries in the top 10 are the Netherlands (4), Germany (5), Hong Kong SAR (6), Sweden (7), United Kingdom (8), Japan (9) and Finland (10).

The CNX Nifty ended at 9738.30, down by 133.20 points or 1.35% after trading in a range of 9714.40 and 9921.05. There were 5 stocks advancing against 46 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 1.90%, TCS up by 0.83%, Tech Mahindra up by 0.59%, Ambuja Cement up by 0.19% and GAIL India up by 0.05%. (Provisional)

On the flip side, Adani Ports & Special Economic Zone down by 4.75%, Sun Pharma down by 3.07%, Bank of Baroda down by 3.05%, SBI down by 3.04% and Ultratech Cement down by 2.83% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 12.87 points or 0.18% to 7,298.61, Germany’s DAX increased 62.62 points or 0.5% to 12,667.82 and France’s CAC increased 10.49 points or 0.2% to 5,279.25.

The Asian markets made a mixed closing on Wednesday; some indices in the region remained under pressure since morning after US Federal Reserve Chair Janet Yellen boosted expectations for an interest-rate rise in December and as President Donald Trump prepares to lay out his tax-cut plan. Japanese shares hit 1-1/2 week lows as many heavyweight stocks went ex-dividend, offsetting investor optimism over a declining yen. Though, China's Shanghai Composite index closed marginally higher after official data showed China's industrial profit growth accelerated sharply in August. Industrial profits grew at a faster pace of 24.0 percent year-over-year in August, following a 16.5 percent spike in July. Hong Kong's Hang Seng index too ended up by nearly half a percent for the day.