Post Session: Quick Review

India equity benchmarks traded in green for most part of the day and ended the session on a flat note. Last hour of selling dragged the markets lower erasing out most of the gains. The benchmarks made a gap-up opening and traded in fine fettle in early deals as sentiments were upbeat on reports that the government will stick to its borrowing and fiscal deficit targets for this fiscal, indicating that it has no plans to relax spending goals to prop up growth as of now. The finance ministry on Thursday released borrowing calendar for the second half of FY18, indicating a gross borrowing of Rs 2.08 lakh crore, which is in line with the target laid out in the Budget. Separately, Finance Minister Arun Jaitley said the Goods and Services Tax (GST) collections in the first two months have met the target and going forward the revenue will see further surge. Total GST collection for August touched Rs 90,669 crore (up to September 25, 2017), against Rs 94,063 crore mopped up in the first month of the new indirect tax regime rollout.

Meanwhile, sentiments also remained up-beat with statement of Niti Aayog member Bibek Debroy, who is also Chairman of the Prime Minister’s Economic Advisory Council that while there may be some minor problems with the economy, it was nothing to be worried about. Investors took note that state-run companies can make Rs 25,000-crore additional capital expenditure this fiscal year as the government has urged them to spend more to boost investment. The government also asked central public sector enterprise (CPSEs) to consider higher dividend and explore debt and other funds to meet their capex targets instead of just relying on internal funds. The CPSEs have budgeted an investment of Rs 3.85 lakh crore in 2017-18. However, selling crept as Securities and Exchange Board of India (SEBI) continued to hit participatory notes (P-notes) investments in month of August too. The share of foreign portfolio investments (FPI) in domestic capital markets through P-notes dropped to seven and a half year low of Rs 1.25 lakh crore at August- end from Rs 1.35 lakh crore at the end of July.

On the global front, Asian markets closed mostly higher. 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 investors focus on data releases and monitor US plans to overhaul the tax system. Consumer price inflation (CPI) in the euro zone remained stable in September, missing forecasts for a slight increase, while the core reading eased unexpectedly.

Back home, select cement stocks were under pressure on ICRA report that cement demand growth is expected to be around 3.5%-4% during the current financial year, a downward revision against the earlier estimate of 5% as there has been a delay in the revival of cement demand during the first half of FY2018.

The BSE Sensex ended at 31274.94, down by 7.54 points or 0.02% after trading in a range of 31243.71 and 31523.87. There were 21 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.96%, while Small cap index was up by 1.23%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.95%, Utilities up by 1.77%, Metal up by 1.46%, Oil & Gas up by 1.38% and Auto up by 1.28%, while FMCG down by 0.69%, IT down by 0.33% and TECK down by 0.11% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 2.61%, Mahindra & Mahindra up by 1.74%, Coal India up by 1.35%, Bharti Airtel up by 1.28% and Cipla up by 1.10%. (Provisional)

On the flip side, Hindustan Unilever down by 2.55%, Wipro down by 1.82%, Dr. Reddy’s Lab down by 1.68%, TCS down by 1.67% and ITC down by 1.21% were the top losers. (Provisional)

Meanwhile, the stricter norms put in place by the market regulator, Securities and Exchange Board of India (Sebi) continued to hit participatory notes (P-notes) investments in month of August too. The share of foreign portfolio investments (FPI) in domestic capital markets through P-notes dropped to seven and a half year low of Rs 1.25 lakh crore at August- end from Rs 1.35 lakh crore at the end of July. Prior to that, the total investment value through P-notes stood at Rs 1.65 lakh crore in June-end and Rs 1.81 lakh crore in May-end.

Of the total, P-note holdings in equities at August-end were at Rs 88,911 crore, while in debts and derivatives were at Rs 27,482 crore and Rs 8,645 crore respectively. The quantum of FPI investments via P-notes decreased to 4.1 percent in August from 4.4 percent in July month and 5.7 percent in June.

The markets regulator, in July, had notified stricter P-notes norms stipulating a fee of $1,000 that would be levied on each instrument to check any misuse for channelising black money. The regulator also prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes. In April, Sebi had barred resident Indians, NRIs and entities owned by them from making investment through P-notes. P-notes are issued by registered Foreign Portfolio Investors to overseas investors who wish to be a part of the Indian stock markets without registering themselves directly. They however need to go through a proper due diligence process.

The CNX Nifty ended at 9782.65, up by 13.70 points or 0.14% after trading in a range of 9775.35 and 9854.00. There were 32 stocks advancing against 18 stocks declining on the index, while one stock remained unchanged. (Provisional)

The top gainers on Nifty were GAIL India up by 5.70%, Eicher Motors up by 3.42%, HPCL up by 3.34%, Aurobindo Pharma up by 2.72% and BPCL up by 2.63%. (Provisional)

On the flip side, Hindustan Unilever down by 2.76%, Wipro down by 1.99%, Dr. Reddy’s Lab down by 1.89%, TCS down by 1.57% and ITC down by 1.40% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 44.64 points or 0.61% to 7,367.46, Germany’s DAX increased 34.91 points or 0.27% to 12,739.56 and France’s CAC increased 0.49 points or 0.01% to 5,294.26.

Asian equity markets ended mostly higher on Friday, although overall gains remained muted amid expectations of a rate hike by the US Federal Reserve in December. Caution ahead of upcoming holidays in China and South Korea next week also served to keep a lid on potential gains. The dollar rally paused and gold held near six-week lows on improved risk appetite following the tax reform speech from US President Donald Trump, while oil prices rose after declining around 1 percent overnight. Chinese shares ended higher on hopes that next month's twice-a-decade Communist Party Congress will likely make state-owned enterprise reform a priority. Meanwhile, Japanese shares ended on a flat note even as a slew of data offered a mostly positive picture of the economy. Industrial output bounced back in August after falling in July, core inflation accelerated amid continued tightness in the labor market and household spending rose while growth in the retail sector slowed in the month.