Benchmarks end flat on profit booking

Profit booking which took place in last leg of trade mainly played spoil sports for the Indian equity benchmarks and pulled them to end flat on Friday. Key gauges made a positive start and traded mostly in green but in tight band throughout the session, as traders taking encouragement with credit rating agency Fitch’s report that the recent recapitalisation plan announced by the government for public sector banks will provide substantial funds to the lenders to address the capital shortages that has a major negative impact on their ratings. Meanwhile, markets regulator SEBI revising the framework for 'block deals' by providing two separate trading windows of 15 minutes each and increasing the minimum order size to Rs 10 crore. The move is aimed at ensuring confidentiality of the large trades and stable prices for such transactions.

Adding to the optimism, Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek expressed hope that India’s ranking is likely to improve significantly in the World Bank’s ease of doing business report, as they have worked very hard. The government’s optimism regarding the improvement in India’s rank comes on the back of reforms taken to improve the efficiency in granting construction permits, starting a business and resolving insolvency. Sentiments also got some support with Niti Aayog CEO Amitabh Kant’s statement who pitched for channeling insurance and pension funds for financing infrastructure projects as also for a complete re- examination of the Viability Gap Funding (VGF) scheme. However, markets witnessed sharp selloff in final hour of trade, with traders opting to book all of their initial profit to pull benchmarks lower and end mixed with negative bias.

Global cues remained supportive with all the European counters trading in green in early deals amid prospect of continuing stimulus in Europe. Euro zone inflation could be higher than earlier expected in five years’ time, the European Central Bank’s survey of professional forecasters showed, partly underpinning the ECB's decision to curb stimulus a day earlier. Asian markets closed mostly in green. Japan’s core consumer prices marked a ninth straight month of annual gains in September but failed to accelerate from the previous month, underscoring the central bank’s huge task as it struggles to meet an ever-elusive 2% inflation target.

Back home, power sector stocks remained on buyers’ radar, as the Power Minister R.K. Singh said that the government is working to make obligations under power purchase agreement (PPA) statutory binding, ensuring all discoms have PPAs to cover 100 percent requirement. On the sectoral front, telecom stocks remained under lot of pressure despites reports that the government is making efforts to double India’s telecom infrastructure by the year 2020.

Finally, the BSE Sensex rose 10.09 points or 0.03% to 33,157.22, while the CNX Nifty was down by 20.75 points or 0.20% to 10323.05.

The BSE Sensex touched a high and a low of 33,286.51 and 33,109.41, respectively and there were 18 stocks on gaining side as against 13 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.28%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.61%, Auto up by 0.85%, Industrials up by 0.82%, Utilities up by 0.42% and Consumer Discretionary Goods & Services was up by 0.42%, while Telecom down by 5.06%, Energy down by 1.57%, PSU down by 1.49%, Oil & Gas down by 1.16% and Bankex down by 0.82% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 4.31%, Sun Pharma up by 3.65%, ONGC up by 3.53%, Tata Motors - DVR up by 3.10% and Tata Motors up by 2.55%. On the flip side, Bharti Airtel down by 4.98%, SBI down by 3.03%, Reliance Industries down by 1.88%, Wipro down by 1.74% and NTPC down by 1.19% were the top losers.

Meanwhile, telecom secretary Aruna Sundararajan has said that the government is making efforts to double India’s telecom infrastructure by the year 2020. She called upon all stakeholders in the country -- central and state governments, local authorities and the industry to facilitate laying out of optical fibre in the country for delivering high-speed broadband services. Besides, she said that whether it is smart cities, 5G, Internet of Things (IoT), they need optical fibre. Fibre first programme in this country is a national imperative and they must start working together.

Sundararajan has said that in the next 2-3 years, they expect to see many more initiatives to come because government itself is working on portfolio of Rs 1 lakh crore including phase 1 of Bharat Net. She noted that they have 83,000 village panchayats that have optic fibre network in place and the first phase of BharatNet project will be completed by December this year. Adding further, she pointed out that the government is pushing ahead with Bharat Net project rollout to connect the country's 2.5 lakh gram panchayats with optical fibre cable (OFC) for high-speed internet access by March 2019.

Telecom secretary further observed that there were a lot of anomalies in policies at various levels that would need to be aligned for the speedy rollout of the digital infrastructure. She cited a report saying every 1.3% increase in broadband penetration leads to 1% increase in GDP, but in the case of India, it has resulted in 3.3% increase in GDP. She also expressed her hoped that with Bharat Net, every village will have OFC capability. She added that for the last 10 years, people have been counting how many kilometres of roads had been built, but now it is important to count kilometres of OFC laid in the country for growth.

The CNX Nifty traded in a range of 10,366.15 and 10,311.30. There were 27 stocks in green as against 23 stocks in red on the index.

The top gainers on Nifty were Bajaj Finance up by 4.39%, Adani Ports & SEZ up by 4.21%, Sun Pharma up by 3.93%, ONGC up by 3.78% and Tata Motors up by 2.49%. On the flip side, Bharti Infratel down by 7.99%, Yes Bank down by 7.10%, IOC down by 5.38%, HPCL down by 5.29% and Bharti Airtel down by 4.66% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 16.6 points or 0.22% to 7,503.10, France’s CAC surged 44.36 points or 0.81% to 5,499.76 and Germany’s DAX was up by 92.69 points or 0.71% to 13,225.97.

Asian equity markets ended mostly higher on Friday, with a weakening yen, higher oil prices, optimism over US tax reform plans, solid industrial profits data from China and encouraging results from US tech companies boosting investors’ sentiments. Traders also took the ECB's bond-buying cutback announcement in their stride. The European Central Bank on Thursday took its first cautious steps toward normalization by announcing that it will reduce the size of its asset purchases at the start of next year while extending them for nine months. Japanese shares hit a fresh 21-year high, led by technology stocks after online retailer Amazon, chipmaker Intel and software giant Microsoft all posted quarterly earnings that surpassed Wall Street expectations. Google's parent company Alphabet also performed better than a year ago. Further, Chinese shares ended higher after official data showed China's industrial profit growth accelerated further in September. Industrial profits surged 27.7 percent year-over-year in September, faster than the 24.0 percent spike in August. Moreover, the latest rate of growth was the quickest since 2011.