Post Session: Quick Review

Indian equity benchmarks traded on a firm note throughout the day and ended the session with decent gains. The markets maintained upward momentum, while investors waited for outcome of GST Council meeting. Markets closed near day’s high with Nifty inching closer to 10,000 mark. The benchmarks made a gap-up opening and traded with traction in early deals as traders took encouragement with World Bank President Jim Yong Kim’s statement that the Goods and Services Tax (GST) is going to have a hugely positive impact on the Indian economy. He added that the recent slowdown in India’s economic growth is an aberration mainly due to the temporary disruptions in preparation for the GST, pointing out that it will get corrected in the coming months. Some buying also crept in with Commerce and Industry Minister Suresh Prabhu’s statement that he is working closely with the Finance Ministry and other departments to firm up policy initiatives along with fiscal incentives to give a fillip to industrial growth and job creation. He added that the country’s economy is doing well and it has a huge growth potential in coming years.

Investors were eyeing the GST Council meet where it is expected to provide relief to businesses by tweaking rates and procedures. The package of measures expected to be taken up by the council may include an increase in the threshold limit for the composition scheme to Rs 1-1.5 crore from Rs 75 lakh to aid micro, small and medium enterprises, a more liberal exemption limit, and a lower compliance burden with quarterly rather than monthly filing apart from steps to boost exports. Enough indication of relief was given by Prime Minister Narendra Modi in his recent speech at the Institute of Company Secretaries. Separately, retirement fund body EPFO is mulling to give its subscribers an option to set aside a higher proportion of their provident fund money for equity asset class. EPFO has been raising the amount it invests in equities since 2015, when it started with 5% of the corpus. Its investment in FY16 was Rs 6,577 crore, rising to Rs 14,982 crore or 10% of its incremental corpus in the following year.

On the global front, Asian markets closed higher. Japanese shares hit two-year high with a weakening yen on hopes for US tax reform as well as record highs on Wall Street. The European markets were trading mostly in green with investors’ focus turning from a separatist crisis in Catalonia. A survey showed that growth in the number of workers hired in Britain via recruitment agencies slowed last month and fell in London for the first time in nearly a year as Brexit makes it harder for companies to find staff.

The BSE Sensex ended at 31836.77, up by 244.74 points or 0.77% after trading in a range of 31632.81 and 31844.28. There were 24 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.95%, while Small cap index was up by 1.08%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 3.30%, Oil & Gas up by 2.16%, Basic Materials up by 1.97%, PSU up by 1.92% and Utilities up by 1.86%, while Realty down by 0.13% was the sole loser on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 4.98%, Sun Pharma up by 3.53%, NTPC up by 2.46%, SBI up by 2.37% and Hindustan Unilever up by 1.85%. (Provisional)

On the flip side, Hero MotoCorp down by 1.33%, Tata Motors - DVR down by 0.68%, HDFC down by 0.38%, Dr. Reddy’s Lab down by 0.37% and Mahindra & Mahindra down by 0.19% were the top losers. (Provisional)

Meanwhile, amid concerns over the slower Gross domestic product (GDP) growth of the country, multilater agency World Bank has raised some hopes and its President Jim Yong has said that the recent slowdown in India's economic growth is an aberration triggered by temporary disruptions in preparation for the Goods and Service Tax (GST), hoping that this temporary blip will get sorted in the near future.

The World Bank President also praised the government’s initiatives like GST and Swachh Bharat Abhiyan, and said that all of those efforts will yield good results. He said that the GDP growth will stabilise during the year and GST is going to have a positive impact on the Indian economy. Jim Yong though expressed some concerns over the challenges which the country is facing now in the fields like educational and health.

He praised the 'commitment' of Prime Minister Narendra Modi to sanitation issues, and said 'Swachh Bharat' is one of the most effective programmes anywhere and raised optimism about the country, saying India has room to improve like most other countries. India's GDP grew 5.7 per cent on a year-on-year basis during the April-June period (Q1). 

The CNX Nifty ended at 9987.20, up by 98.50 points or 1.00% after trading in a range of 9906.60 and 9989.35. There were 42 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 5.98%, Tata Steel up by 4.92%, Hindalco up by 4.47%, Sun Pharma up by 3.74% and Bajaj Finance up by 3.20%. (Provisional)

On the flip side, Bharti Infratel down by 1.30%, Hero MotoCorp down by 1.10%, HDFC down by 0.60%, Dr. Reddy’s Lab down by 0.51% and Zee Entertainment down by 0.29% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 11.17 points or 0.15% to 7,519.16, Germany’s DAX increased 6.77 points or 0.05% to 12,974.82, while France’s CAC decreased 10.59 points or 0.2% to 5,368.62.

Asian equity markets ended higher on Friday, tracking overnight gains on Wall Street after Congress passed a $4.1 trillion budget resolution and data on jobless claims, factory orders and trade balance pointed to underlying strength in the economy. However, overall gains remained muted ahead of the US September nonfarm payrolls report, due out later in the day. Employment is expected to rise by 90,000 jobs in September after climbing by 156,000 jobs in August. The unemployment rate is expected to hold at 4.4 percent. Japanese shares hit two-year high with a weakening yen on hopes for US tax reform as well as record highs on Wall Street. Hong Kong shares closed at its highest level in nearly 10 years, supported by Chinese automakers and banks. Chinese banks extended gains, still basking in the glow of the central bank’s announcement on Saturday that it is cutting the amount of cash that some banks must hold as reserves for the first time since February 2016 to encourage more lending to struggling smaller companies. Meanwhile, Chinese and South Korean markets were closed for holidays.