Post Session: Quick Review

Indian equity benchmarks traded on a lackluster note and ended the session with modest cut of more than quarter a percent. Range bound movements on the markets continued from the morning session with Nifty struggling to hold its 9,900 mark. The benchmarks made a decent start and traded slightly in green in early deals as traders took encouragement with NITI Aayog CEO Amitabh Kant’s statement that while there has been a ‘little bit of dip’ in the Indian economy, it is now bouncing back. Prime Minister Narendra Modi too has asserted that the economy is much better than critics make it out to be and that his government is totally committed to reverse the slowdown in GDP growth in recent quarters. Some support also came after the Nikkei India Services Purchasing Managers’ Index rose to 50.7 in September from August’s 47.5. India’s service sector PMI marked below the 50.0 neutral level in the previous two months due to the goods and services tax (GST) introduced in July. According to the PMI survey, greater workloads supported job creation in September, with the rate of employment growth the strongest since June 2011.

However, selling crept in as RBI had cut its growth estimate for the current fiscal on Wednesday and warned that any economic stimulus and farm debt waivers could push up fiscal deficit by 1 percentage point, potentially stoking inflation. Separately, as per foreign brokerage report the sentiments of foreign portfolio investors towards India is likely to remain weak until corporate earnings recovery sets in.  This, coupled with high equity supply, would mean that the market performance will remain subdued until the end of the year. FPIs have pulled out over Rs 24,000 crore from Indian equities since August due to disappointment over economic growth, delay in earnings recovery, expensive valuation and geopolitical tensions. Investors also took note that India’s winter crops may be at risk this year as insufficient showers in some key regions reduced dam levels. The June-September monsoon season is critical to India’s agriculture sector as it directly waters more than half of all farm land and helps fill dams that irrigate crops during winter. This year’s monsoon was below normal, with 17% of the country receiving insufficient showers.

On the global front, Asian markets closed mixed. Japanese stocks are forecast to scale a 21-year peak by year-end, boosted by weaker yen and market expectations Prime Minister Shinzo Abe will prevail in a snap election he called for October 22 in a boost for his broad political and economic agenda. The European markets were trading mostly in red as investors monitored political events and took a cautious approach ahead of key data releases. Spanish equities investors cautioned that political uncertainty could hurt the economy after Catalonia’s separatist leader said the region would move on Monday to declare independence after a referendum that authorities in Madrid declared illegal.

The BSE Sensex ended at 31583.67, down by 88.04 points or 0.28% after trading in a range of 31562.25 and 31772.41. There were 15 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.58%, while Small cap index was up by 0.80%. (Provisional)

The top gaining sectoral indices on the BSE were Basic Materials up by 0.94%, Realty up by 0.64%, Healthcare up by 0.38%, Industrials up by 0.31% and Metal up by 0.28%, while Telecom down by 0.62%, Consumer Durables down by 0.54%, FMCG down by 0.47%, Oil & Gas down by 0.47% and Bankex down by 0.29% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 1.64%, Coal India up by 1.13%, Tata Motors - DVR up by 0.88%, Cipla up by 0.72% and Reliance Industries up by 0.71%. (Provisional)

On the flip side, Power Grid down by 2.01%, ICICI Bank down by 1.38%, Hero MotoCorp down by 1.29%, Bajaj Auto down by 1.20% and HDFC down by 1.01% were the top losers. (Provisional)

Meanwhile, after contracting for two months in a row, the services sector bounced back to growth in the month of September, as the businesses recovered from the Goods and Services Tax (GST) related contractions, driven by renewed increases in new business and output. The seasonally adjusted Nikkei Services Business Activity Index rose back above the 50.0 no-change mark in September, posting reading at 50.7 from 47.5 in August. The Nikkei India Composite PMI Output Index which measures both manufacturing and services too climbed to 51.1 in September from 49.0 in August.

As per the survey report, the rate of employment growth was the strongest since June 2011 on the back of greater workloads coupled with improving economic environment. Going further, manufacturers added payroll numbers in September on account of increased new orders. The report also said that growth in new business witnessed due to marketing campaigns done by companies and strengthening demand conditions, leading rise in outstanding business volumes at service providers.

On the inflation front, input cost inflation accelerated in September month, by quickening at fastest rate since March, while output charge inflation slowed to the weakest since June and was modest despite increase in output prices by service providers for the eighth month running. Besides, in the manufacturing sector, the rate of input price inflation intensified during September but was modest, and amid competitive environment, firms could increase the output prices only at a marginal pace.

The CNX Nifty ended at 9886.85, down by 28.05 points or 0.28% after trading in a range of 9881.85 and 9945.95. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Aurobindo Pharma up by 2.48%, NTPC up by 1.90%, Ambuja Cement up by 1.67%, Coal India up by 1.26% and Yes Bank up by 0.94%. (Provisional)

On the flip side, Tech Mahindra down by 3.21%, Bharti Infratel down by 2.93%, Power Grid down by 1.96%, HPCL down by 1.76% and ICICI Bank down by 1.50% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 30.34 points or 0.23% to 12,940.18, France’s CAC decreased 4.81 points or 0.09% to 5,358.42, while UK’s FTSE 100 increased 6.03 points or 0.08% to 7,473.61.

Asian equity markets made a mixed closing on Thursday as market participants awaited the US government's non-farm payrolls report due out Friday for further clues as to the timing of the next rate rise. Meanwhile, falling oil prices coupled with worries about Catalonia's independence vote from Spain kept investors’ appetite in check. Japanese shares ended little changed near two-year highs as the yen strengthened slightly versus the greenback. Markets in South Korea and China were closed for the Harvest Festival and National Day holidays, respectively. Hong Kong also remained closed for the Mid-Autumn Festival.