Benchmarks snap seven days losing streak

Snapping seven days losing streak, Indian equity benchmarks ended the session with gain of over one third of a percent. However, domestic gauges truly depicted the choppiness of F&O expiry session, with frontline gauges swinging between green and red for most part of the day, 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.

Buying in last leg of trade comes as the saving grace for the markets and helped them to end in green terrain, as the traders settled their positions and covered shorts going to new series. Traders took some solace with Prime Minister Narendra Modi’s statement that traders across the country are 'positive' about GST and accepting the new taxation arrangement but they need 'handholding' so that their problems can be resolved. He urged the chief secretaries to use the district administration in this regard, so that small traders are facilitated to access and adopt the new system. Adding to the optimism, Niti Aayog vice chairman Rajiv Kumar said 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. Investors also took support with private 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. According to global brokerage firm, India's digitisation drive would provide a boost of 50-75 basis points to GDP growth in the coming decade.

Firm opening in European counters too provided some strength to Indian markets, with CAC, DAX and FTSE trading in green 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. Asian markets ended mostly in red after South Korea said it expects North Korea to engage in more provocative action next month.

Back home, stocks related to real estate space firmed up 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. PSU banking stocks too remained on buyers’ radar on report that the government is planning 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.

Finally, the BSE Sensex surged 122.67 points or 0.39% to 31,282.48, while the CNX Nifty was up by 33.20 points or 0.34% to 9,768.95.

The BSE Sensex touched a high and a low of 31,340.91 and 31,081.83, respectively and there were 17 stocks on gaining side as against 14 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.77%, while Small cap index was up by 0.90%.

The top gaining sectoral indices on the BSE were Realty up by 0.91%, Bankex up by 0.77%, Basic Materials up by 0.77%, Utilities up by 0.74% and Healthcare up by 0.69%, while Energy down by 0.53%, Consumer Durables down by 0.33%, Capital Goods down by 0.32%, Oil & Gas down by 0.13% and IT down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 3.05%, Dr. Reddys Lab up by 2.62%, Cipla up by 2.38%, Coal India up by 2.32% and Maruti Suzuki up by 2.11%. On the flip side, Asian Paints down by 2.73%, Reliance Industries down by 1.48%, Wipro down by 0.94%, Bharti Airtel down by 0.70% and Tata Motors down by 0.69% were the top losers.

Meanwhile, in order to support India to accelerate inclusive economic transformation toward upper-middle-income status, the Asian Development Bank (ADB) said that it is planning to raise annual lending up to $4 billion per year to the country between 2018 and 2022. The proposal was endorsed at new ADB Country Partnership Strategy (CPS) for these five years. Besides, it noted that the new lending programme, which includes private sector operations, is much higher than the average $2.65 billion a year in loans extended during 2012 and 2016.

Multi-lateral funding agency has stated that during the 5-year period, the new lending programme will focus on three pillars of activities, such as boosting economic competitiveness to create more and well-paid jobs, improved access to infrastructure and services, and addressing climate change and improving climate resilience. The report also said that financing will also go for public sector management, agriculture, natural resources and rural development as well as skills development and urban health. It also mentioned that the new lending will be complemented by technical assistance to undertake strategic studies, build capacities and prepare projects. In addition, ADB will also explore co-financing opportunities, including climate funds for relevant projects.

As part of the enhanced lending under CPS, ADB said that it will continue to prioritise private sector development and support government in reviving private financing of infrastructure projects, including via public-private partnerships. In private sector, it will support transport, power, urban infrastructure (including sewerage and solid waste management), affordable housing, manufacturing, health and education among others.

The CNX Nifty traded in a range of 9,789.20 and 9,687.55. There were 26 stocks in green as against 25 stocks in red on the index.

The top gainers on Nifty were ACC up by 3.68%, Dr. Reddys Lab up by 3.33%, Kotak Mahindra Bank up by 2.71%, Hindalco up by 2.53% and Bharti Infratel up by 2.34%. On the flip side, Asian Paints down by 2.85%, Bosch down by 2.37%, Aurobindo Pharma down by 1.84%, Bharti Airtel down by 1.81% and Reliance Industries down by 1.61% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 7.79 points or 0.11% to 7,321.30, France’s CAC gained 9.18 points or 0.17% to 5,291.14 and Germany’s DAX was up by 41.69 points or 0.33% to 12,699.10.

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.