Post Session: Quick Review

Indian equity benchmarks traded in green throughout the day and ended the session with gains of around more than one percent. The building up of positions by participants ahead of key economic data -- Industrial Production (IIP) for August and consumer inflation for September to be released later in the day -- drove up domestic bourses. The benchmarks gained momentum after a cautious start and traded in fine fettle in early deals as sentiments remained upbeat after the government’s revenue collection during April-September, the first half of fiscal year 2017-18 has shown a healthy growth. For the period, direct tax collections, which comprise personal income and corporate tax, stood at Rs 3.86 lakh crore, registering a growth of 15.8 percent higher than the net collections for the corresponding period of last year, mainly on account of a healthy growth in advance tax mop-up.  Some support also came with finance minister Arun Jaitley’s statement that the series of reforms like demonetization and Goods and Services Tax (GST) has put Indian economy on a far stronger track. Jaitley added that these are structural changes. And these structural changes, I think have put the Indian economy on a far more sound track so that we can look forward for a much cleaner much bigger India economy in the days and years to come. Separately, Department of Economic Affairs (DEA) Secretary Subhash Chandra Garg expressed hope that India’s GDP might return to 7% plus growth by next year as all indicators point to an economic turnaround. The country’s economic slowdown has hit its bottom and will be riding the growth wave one again.

Investors took note that the recently constituted Economic Advisory Council to the Prime Minister (EAC-PM) has identified 10 priority areas for accelerating economic growth and employment over the next six months, with greater last mile connectivity. The 10 themes are economic growth, employment and job creation, informal sector and integration, fiscal framework, monetary policy, public expenditure, institutions of economic governance, agriculture and animal husbandry, patterns of consumption and production and social sector. PSU Banking stocks were under pressure after a recent study of International Monetary Fund Financial which showed that Indian banking sector was vulnerable given that large segments have low profitability and have large problem loans. The IMF said a combination of weak banks and corporates leaves India vulnerable to a tightening in the global financial conditions, as it pressed for more steps to ensure good capitalization in public sector banks.

On the global front, Asian markets closed mostly higher. Japanese wholesale prices rose in September at the fastest annual pace in almost nine years due to rising prices for gasoline, metals, and agricultural products, but the gains won’t necessarily boost the country’s notoriously weak inflation. The European markets were trading mostly in green with investors awaiting data and monitoring speeches from central bankers at the International Monetary Fund’s (IMF) annual meeting in Washington D.C. Euro zone industrial output rose by far more than expected and at its highest rate in nine months in August as production of capital goods, such as machinery, rose sharply, boding well for economic growth in the second half of the year.

Back home, mixed reactions were witnessed in telecom stocks on report that the Telecom Commission’s recent move to extend the tenure of payments for auctioned airwaves will improve telcos’ cash flows over the next 6-7 years, but the industry said it will still end up paying nearly an additional Rs 30,000 crore to the government as the payouts will continue for a much longer span.

The BSE Sensex ended at 32183.73, up by 349.74 points or 1.10% after trading in a range of 31813.67 and 32209.03. There were 26 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.98%, while Small cap index was up by 1.17%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 2.15%, Metal up by 2.06%, Telecom up by 1.80%, Realty up by 1.30% and Industrials up by 1.17%, while there were no losers on BSE sectoral front. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 4.12%, Sun Pharma up by 2.32%, TCS up by 2.02%, Axis Bank up by 1.83% and Hindustan Unilever up by 1.65%. (Provisional)

On the flip side, Bharti Airtel down by 0.95%, Infosys down by 0.25%, Coal India down by 0.25%, SBI down by 0.20% and Power Grid down by 0.20% were the top losers. (Provisional)

Meanwhile, a day after lowering India's growth forecast for 2017, the International Monetary Fund (IMF) has said that a combination of weak banks and corporates leave India vulnerable to a tightening of the global financial conditions, it urged for more steps to ensure good capitalisation in public sector banks.

As per its recent study, Indian banking sector was vulnerable given that large segments have low profitability and have large problem loans. The international organization also found vulnerabilities in the country’s corporate financial positions, in view of their high leverage and risk profiles.

IMF though appreciated measures taken by the government to address the problems of the banking system, however said they are not sufficient to tackle the bad loans which rose to Rs 6.41 lakh crore at the end of March 2017 as against Rs 5.02 lakh crore a year ago.

The CNX Nifty ended at 10100.90, up by 116.10 points or 1.16% after trading in a range of 9977.10 and 10104.45. There were 42 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 5.99%, Bharti Infratel up by 5.41%, Reliance Industries up by 4.23%, Sun Pharma up by 2.60% and Aurobindo Pharma up by 2.23%. (Provisional)

On the flip side, Bharti Airtel down by 0.85%, Ultratech Cement down by 0.79%, Indian Oil Corporation down by 0.77%, UPL down by 0.52% and SBI down by 0.30% were the top losers. (Provisional)

The European markets were trading mostly in green; UK’s FTSE 100 increased 9.45 points or 0.13% to 7,543.26, Germany’s DAX increased 7.42 points or 0.06% to 12,978.10,while France’s CAC decreased 4.58 points or 0.09% to 5,357.83.

Asian equity markets ended mostly higher on Thursday after the latest FOMC minutes showed Fed officials expressing a strong degree of caution over the timing of future interest-rate increases. Many participants thought another increase in interest rates later this year is ‘likely to be warranted’ if the medium-term outlook remained broadly unchanged. However, they also expressed concern about persistently weak inflation. Japanese shares closed at a more than two-decade high as polls suggesting that Prime Minister Shinzo Abe's ruling coalition is heading for a two-thirds majority in forthcoming election helped offset concerns over a firmer yen. Meanwhile, Chinese shares ended little changed with a negative bias ahead of the Communist Party Congress starting next week.