Markets end slightly in red ahead of Diwali

Indian equity benchmarks ended the choppy day of trade with marginal losses on Wednesday, as traders remained on sidelines ahead of long Diwali weekend, as the markets will be closed on Thursday and Friday for Diwali, with Thursday just having one hour of Muhurat trading. Markets started off with losses and sentiments remained dampened with Revenue Secretary Hasmukh Adhia’s statement that the Goods and Services Tax (GST) compliance is still low. He added that a clear trend about revenue collections is likely to emerge only after three-four months, once integrated GST (IGST) is converted into Central GST and State GST, as GST revenue includes IGST revenue. He also said that compliance will fall further if penalty for late filing of returns is dropped. Adding to the pessimism, India Inc’s outward foreign direct investment (OFDI) in overseas ventures plunged by 39.29% to $2654.45 million during September 2017 from $4372.47 million in the same month of last year. In august month, OFDI declined by 14.82% to $1339.26 million from $1572.23 million in the same month of last year.

Traders also remained cautious with private report that about 49% Indians are likely to spend less this Diwali compared to last year due to demonetization and impact of GST, with expenditure on clothes and sweets to be the highest. Though 21% will be spending more over last year, 18% will spend same as the last year while 21% respondents said they were undecided. However, markets saw decent recovery in second half of trade and pared most of their initial losses, as some solace came from statement of Surjit Bhalla, a member of the Prime Minister’s Economic Advisory Council that the government is likely to stick to its fiscal deficit target of 3.2 per cent of GDP, and may accelerate sales of government stakes in lenders and other companies as part of an effort to recapitalise banks.

Positive opening in European counters too helped Indian bourses to trim some losses. CAC, DAX and FTSE were trading in green, as investors monitored the latest batch of earnings and economic data releases. Asian markets exhibited mixed trend on Wednesday, as China's ruling Communist Party began its week-long once-in-a-five-year Congress

Back home, telecom shares remained under pressure, as investors overlooked Telecom secretary Aruna Sundararajan’s statement that the government is working on telecom projects worth Rs 1.3 lakh crore, which will considerably give a boost to digital connectivity in India. Steel stocks lost sheen, despite the Ministry of Finance imposing an anti-dumping duty on steel to cover colour-coated or pre-painted flat products of alloy or non-alloy steel. Meanwhile, non-banking financial company MAS Financial Services have made a stellar debut on bourses and are trading with a gain of over 40%. The export oriented stocks remained buzzing, as the Centre is considering an incentive package of over Rs16,000 crore to boost exports in view of sluggish domestic demand and competition in export markets.

Finally, the BSE Sensex lost 24.81 points or 0.08% to 32,584.35, while the CNX Nifty was down by 23.60 points or 0.23% to 10,210.85.

The BSE Sensex touched a high and a low of 32,670.32 and 32,462.85, respectively and there were 12 stocks on gaining side as against 19 stocks on losing side on the index.

The broader indices ended mixed; the BSE Mid cap index rose 0.01%, while Small cap index was down by 0.02%.

The top gaining sectoral indices on the BSE were Energy up by 2.50%, Utilities up by 1.31%, Oil & Gas up by 1.24%, Power up by 1.21% and FMCG was up by 0.14%, while Telecom down by 1.86%, Bankex down by 1.79%, Healthcare down by 0.80%, TECK down by 0.67% and Consumer Durables was down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 4.52%, Power Grid up by 4.00%, Wipro up by 1.92%, ONGC up by 1.75% and Kotak Mahindra Bank up by 1.61%. On the flip side, Axis Bank down by 9.52%, ICICI Bank down by 3.96%, Cipla down by 3.26%, SBI down by 2.77% and Lupin down by 1.66% were the top losers.

Meanwhile, telecom secretary Aruna Sundararajan has said that the government is working on telecom projects worth Rs 1.3 lakh crore, which will considerably give a boost to digital connectivity in India. She also expressed hopes that many more such initiative will come in the next 2-3 years as the government itself is working on portfolio of Rs 1.30 lakh crore. She believed that with this initiative, telecom infrastructure will see very significant expansion, up-gradation and new era of services.

Telecom secretary further highlighted that the projects include enhancing telecom connectivity in about 8,600 villages of North-east region, undersea cable connectivity for Andaman and Nicobar Islands, revised communication project for Defence and increasing connectivity in rural area. She also indicated that telecom commission, the highest decision-making body of the telecom department, has recently approved several projects that include North-East mobile towers, Internet connectivity in 30,000 villages through satellite bandwidth and revised Network for Spectrum (NFS) project.

Sundararajan has noted that presently, around 80,000 village panchayats have started broadband services and by December 1 lakh panchayats will roll out services under the Bharat Net project. She also said the country has become cheaper both in terms of services and devices by a factor of 10 compared to rest of the world under the present regime.

The CNX Nifty traded in a range of 10,236.45 and 10,175.75. There were 14 stocks in green as against 36 stocks in red on the index.

The top gainers on Nifty were Reliance Industries up by 4.81%, Power Grid up by 3.88%, Indiabulls Housing Finance up by 2.89%, ONGC up by 2.07% and Wipro up by 1.91%. On the flip side, Axis Bank down by 9.38%, ICICI Bank down by 3.80%, Bharti Infratel down by 3. 66%, Cipla down by 3.40% and Tech Mahindra down by 3.23% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 24.08 points or 0.32% to 7,540.25, France’s CAC rose 26.53 points or 0.49% to 5,387.90 and Germany’s DAX was up by 68 points or 0.52% to 13,063.06.

Asian equity markets made a mixed closing on Wednesday as China's ruling Communist Party began its week-long once-in-a-five-year Congress and a survey showed Japanese Prime Minister Shinzo Abe's coalition is on track for a roughly two-thirds majority in Sunday's general election. Chinese shares firmed up after President Xi Jinping conveyed a positive view of the economy, but made a rare acknowledgement of grim challenges facing the country. Japanese shares closed higher for a 12th day in a row, getting a lift from hopes that this weekend’s election will produce political stability and continuation of loose monetary policy. Meanwhile, markets in Malaysia and Singapore were closed for Deepavali.