Post Session: Quick Review

India equity benchmark traded on a lackluster note throughout the day in a narrow range and ended the session with modest gain on F&O expiry day. NSE F&O clocked turnover of 15 lakh crore for first time ever. The market breath was in favour of advances, with three stocks advancing against two declining ones. The benchmarks made a cautious start in early deals as traders remained concerned with India Ratings’ report that India’s GDP growth estimate for the ongoing financial year 2017-18 is likely to come down to 6.7 per cent from 7.4 per cent earlier as the combined effect of demonetisation and introduction of goods and services tax (GST) is proving to be more disruptive for the economy than was expected earlier. Separately, a poll enlightened that the Reserve Bank of India will hold policy steady at its October 4 meeting, and well past next year, amid weak economic growth and signs inflation may soon overshoot its target. Asia’s third-largest economy started losing momentum after the government scrapped 86 percent of currency in circulation late last year, hurting demand in India’s cash-reliant economy, and the slowdown was compounded by the implementation of a new tax system.

Buying crept in with Niti Aayog vice chairman Rajiv Kumar’s statement that the economic downturn which began in the last two years of UPA II regime has bottomed out and the growth will improve in the next two quarters. Separately, multi-lateral funding agency Asian Development Bank (ADB) said it is planning to raise annual lending to India to a maximum of $4 billion per year during 2018-22 to accelerate inclusive economic transformation. Some support also came with brokerage report highlighting that India is expected to be a $6 trillion economy -- the third largest in the world -- in the next 10 years, majorly helped by digitization. India’s digitization drive would provide a boost of 50-75 basis points to GDP growth in the coming decade. The brokerage expects India’s real and nominal GDP growth to compound annually by 7.1% and 11.2% respectively over the coming decade. 

Meanwhile, PSU banking stocks were buzzing on report that the government plans to give growth capital to performing state-run banks as it looks to encourage credit disbursement for private investment. An assessment is being carried out and adequate capital will be provided to performing state-run banks to push credit growth. Real estate stocks were buzzing as the developers are betting big on the upcoming festive season to push housing sales, and are going all out to regain some lost ground, especially at a time when interest rates on home loans are at more than six-year low and demand for affordable housing is picking up. Select FMCG stocks were under pressure on the government’s proposal to stop cigarette and paan shops from selling consumer goods such as soft drinks, biscuits and candy, which doesn’t bode well for companies which expect a decline in sales growth if the move is implemented.

On the global front, Asian markets closed mostly lower. China’s factories likely cranked up activity for the 14th straight month in September as the country’s year-long building boom and higher prices generate hearty profits, though the pace of growth may have eased slightly from August. The European markets were trading in green as sentiment recovered amid hopes for US tax reform plans and an upcoming rate hike, while political turmoil in Germany still weighed. Euro zone economic sentiments improved more than expected in September, reaching levels last seen in July 2007, with optimism rising in all sectors except financial services.

Back home, majority of IT stocks closed in red on report that the Donald Trump administration may be on course to reviewing contracts given to foreign companies, including Indian giants like TCS and Infosys. The Indian companies have been asked to submit a progress report of the current projects outsourced to them by the US government.

The BSE Sensex ended at 31240.81, up by 81.00 points or 0.26% after trading in a range of 31081.83 and 31340.91. There were 18 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.65%, while Small cap index was up by 0.93%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 0.95%, Bankex up by 0.94%, Utilities up by 0.85%, Basic Materials up by 0.77% and Metal up by 0.73%, while Consumer Durables down by 0.66%, Energy down by 0.66%, Capital Goods down by 0.41%, Oil & Gas down by 0.35% and TECK down by 0.31% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Kotak Mahindra Bank up by 2.84%, Dr. Reddy’s Lab up by 2.49%, Cipla up by 2.48%, Maruti Suzuki up by 2.15% and Coal India up by 1.78%. (Provisional)

On the flip side, Asian Paints down by 2.99%, Reliance Industries down by 1.52%, Tata Motors down by 1.10%, Bharti Airtel down by 1.09% and Wipro down by 0.71% were the top losers. (Provisional)

Meanwhile, in order to attract investments from small and medium enterprises (SMEs) in the UK, India has unveiled a new initiative ‘Access India Programme (AIP)’, which will act as a market entry support system for smaller companies with a potential to expand into the Indian market.

The AIP is a facilitation programme, launched by the Indian High Commission in the UK along with knowledge partner UK India Business Council (UKIBC). In line with government’s various efforts and steps to improve ease of doing business in the country, the new initiative will also contribute 'Make in India' concept by facilitating investments from the UK but will not be limited to just 'Make in India'.

The market entry support programme will be consisting of six annual workshops and mentoring programmes and aims to encourage a flow of SMEs into India. It will initially identify a group of about 50 UK companies by the end of this year to begin their entry process from early 2018. Besides, with the use of diagnostics and analysis of SME potential, the AIP will work towards creating a blended plan to link SMEs to a strong support network of prime manufacturers, OEMs, trade bodies and Chambers of Commerce.

The CNX Nifty ended at 9758.30, up by 22.55 points or 0.23% after trading in a range of 9687.55 and 9789.20. There were 28 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.33%, Kotak Mahindra Bank up by 3.03%, Cipla up by 2.82%, Hindalco up by 2.53% and Coal India up by 2.26%. (Provisional)

On the flip side, Asian Paints down by 3.16%, Bosch down by 2.52%, Aurobindo Pharma down by 1.84%, Bharti Airtel down by 1.81% and Reliance Industries down by 1.66% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 7.94 points or 0.11% to 7,321.45, Germany’s DAX increased 42.01 points or 0.33% to 12,699.42 and France’s CAC increased 10.05 points or 0.19% to 5,292.01.

Asian equity markets ended mostly lower on Thursday after South Korea said it expects North Korea to engage in more provocation action next month, to coincide with the anniversary of the founding of its communist party and China's Communist Party Congress. The dollar held steady near one-month high after US President Donald Trump unveiled his long-awaited tax reform plan overnight. Gold rebounded from one-month lows, while oil prices fell after ending higher on Wednesday. Chinese stocks closed a tad lower as many investors took to the sidelines as they awaited third quarter economic data and counted down to a week-long National Day holiday starting on Sunday. Though, Japanese shares ended higher as the gains in the dollar against the yen helped lift exporters and financials, it also climbed on expectations for a US Federal Reserve interest rate hike in December.