Benchmarks manage positive close on Monday

Indian equity benchmarks managed to end volatile session of trade in green terrain on Monday, with frontline gauges ending above their crucial 10,150 (Nifty) and 32,500 (Sensex) levels. Markets witnessed immense volatility during the trade as traders remained watchful ahead of F&O expiry and Infosys earnings due later this week. Key gauges kicked off the session on optimistic note with traders taking encouragement with Hasmukh Adhia’s statement that policymakers are considering steps to ease the compliance burden related to the Goods and Services Tax (GST) on small businesses and to make product classification for taxation less complicated. Some support also came with report that foreign investors have poured a whopping $2 billion into the Indian debt markets so far this month due to lower currency volatility coupled with positive real interest rates. However, markets pared all of their early gains and entered into red terrain in noon deals on report that foreign portfolio investors (FPIs) however pulled out Rs 3,408 crore ($523 million) from equities on account of profit booking during this period.

Fresh bout of buying in last leg of trade helped markets to end with a gain of over one third of a percent. Sentiments turned up-beat with Prime Minister Narendra Modi’s statement that the Indian economy is on track and is going in the right direction on back of various reforms and hard decisions. He also assured that the government will continue to take important decisions regarding the economic reforms. Some support also came with Union Minister of Minority Affairs Mukhtar Abbas Naqvi’s statement that the GST will remain as a Good and Simple Tax in the coming days to come. Adding some optimism, the private report stated that the Indian economy is expected to see a rebound in the July-September quarter of this year with a GVA growth rate of 6.3 percent.

Positive opening in European counters too aided sentiments with CAC, DAX and FTSE trading in green in early deals, as investors monitored fresh corporate earnings and awaited any further developments from Spain's ongoing constitutional crisis. Asian markets ended mostly in green led by Japanese Nikkei on the back of weaker yen, as an election win for Shinzo Abe’s ruling bloc gave a green light for more policy stimulus.

Back home, telecom stocks rang loud during the trade after Reliance Jio raised data tariffs last week, signalling more pricing discipline in the sector, while strong global markets also boosted sentiment. Port and shipping related stocks remained buzzing in trade today, as Union Minister Nitin Gadkari said a blueprint of 142 expansion projects has been finalized to modernize 12 major ports and develop new harbours at a cost of about Rs 90,000 crore. Meanwhile, Indian Energy Exchange (IEX) made a tepid debut on the exchange today as the scrip got listed at a discount to its issue price of Rs 1,650. However, it managed to trim most of its initial losses and went home with marginal losses of around one and a half percent. The issue, which was sold between October 9 and October 11, had been subscribed 2.28 times.

Finally, the BSE Sensex surged 116.76 points or 0.36% to 32,506.72, while the CNX Nifty was up by 38.30 points or 0.38% to 10,184.85.

The BSE Sensex touched a high and a low of 32,614.89 and 32,312.74, respectively and there were 16 stocks on gaining side as against 15 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.45%, while Small cap index was up by 0.09%.

The top gaining sectoral indices on the BSE were Telecom up by 2.82%, Energy up by 1.80%, TECK up by 1.26%, Basic Materials up by 1.20% and Utilities was up by 1.12%, while FMCG down by 0.66%, Healthcare down by 0.64%, Capital Goods down by 0.23% and Industrials was down by 0.10% were the few losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.99%, Reliance Industries up by 3.05%, ICICI Bank up by 1.82%, Wipro up by 1.63% and Adani Ports up by 1.36%. On the flip side, Tata Motors - DVR down by 2.71%, Cipla down by 2.38%, Axis Bank down by 2.27%, Kotak Mahindra Bank down by 1.61% and HDFC down by 1.52% were the top losers.

Meanwhile, Employee Provident Fund Organisation (EPFO), the government body responsible for execution of provident fund services, is likely to consider next month a proposal to credit subscribers’ share of its Exchange Traded Funds (ETF) investments to their provident fund accounts which may be redeemed at the time of withdrawal.

For this purpose, EPFO’s apex decision making body the Central Board of Trustee (CBT) headed by Labour Minister Santosh Gangwar will meet in November. The proposal which was one of the agendas discussed in an earlier CBT meeting might be brought up during the next month meet. The issue was referred to Comptroller and Auditor General (CAG). He added that the CAG had agreed to the proposal in principal but sought few clarifications.

As per estimates, EPFO’s investment in ETFs is expected to touch Rs 45,000 crore by the end of fiscal year 2018. EPFO had started investing in ETF in August 2015, putting 5 percent of its investible deposits in stock linked products. It was raised to 15 percent for the current fiscal. Once approved, the share of subscribers in the form of ETF units will be credited to their accounts.

The CNX Nifty traded in a range of 10,224.15 and 10,124.50. There were 26 stocks in green as against 24 stocks in red on the index.

The top gainers on Nifty were Bharti Airtel up by 4.92%, Ultratech Cement up by 4.11%, Reliance Industries up by 3.32%, Ambuja Cement up by 3.31% and HCL Technologies up by 1.92%. On the flip side, Cipla down by 2.58%, Bharti Infratel down by 2.40%, Axis Bank down by 2.28%, UPL down by 1.61% and Lupin down by 1.45% were the top losers.

European markets were trading in green; UK’s FTSE 100 rose 9.35 points or 0.12% to 7,532.58, France’s CAC increased 27.67 points or 0.52% to 5,400.05 and Germany’s DAX was up by 58.02 points or 0.45% to 13,049.30.

Asian equity markets ended mostly higher on Monday after the US Senate approved a budget blueprint that paves the way for tax cuts and Japanese Prime Minister Shinzo Abe's ruling Liberal Democratic Party scored a big win in the nationwide parliamentary election Sunday, paving the way for a continuation of loose monetary policy. Chinese shares finished marginally higher as home-price growth data disappointed investors and markets awaited cues from a key political congress. Further, Japanese shares rallied as the dollar hit a three-month high versus the yen following the weekend election victory for Shinzo Abe.