Post Session: Quick Review

Indian equity benchmarks traded in a narrow range throughout the day and ended the session on a strong note with Sensex and Nifty closing at record high. The benchmarks made an optimistic start and traded in fine fettle in early deals as traders took some encouragement with the private report that the government’s recapitalization plan for public sector banks is likely to propel credit growth by up to 700 basis points to 15% and as consequence push up GDP numbers to 7% in the next fiscal. The report highlighted that the industry is likely to see a 7% growth in 2018-19 from 5% in the current fiscal. Services are projected to grow at 7.3% in the current fiscal and rise to 7.5% in the succeeding year. The street reacted positively to the meeting outcome of the ministerial panel working to make GST composition scheme more attractive, which suggested slashing tax rate to 1%  for manufacturers and restaurants, while easier norms for traders opting for it. Select auto related stocks were buzzing in today’s trade as the Union road transport ministry approved the timeline for the implementation of system which requires all cars manufactured after July 1, 2019, to be equipped with airbags, seat-belt reminders, alert systems for speeds beyond 80kmph, reverse parking alerts, as well as manual override over the central locking system for emergencies.

Meanwhile, investors took note that India expects a big jump in the World Bank’s ease of doing business ranking that will be released soon, thanks to multiple reforms initiated by the government beginning to show results. Ranked at 130 in the last reckoning, the government has set itself a target of breaking into the top 50. Separately, Railways and Coal Minister Piyush Goyal has said that India will grow at over 8% consistently due to reforms. Goyal added that the railways is looking to invest over $150 billion over the next five years which would help create one million additional jobs. Additionally, FM Arun Jaitley has enlightened that individual tax base is growing with India having the lowest direct tax slab in the world, digital transactions are rising, and the new insolvency law will yield positive results. The market participants paid no heed towards the CBEC chairperson Vanaja N Sarna’s statement that disruption caused by the Goods and Services Tax (GST) rollout may hamper government’s indirect revenue collection target for the year 2017-18.

On the global front, Asian markets closed mixed. Activity in China’s manufacturing sector likely grew at a slightly slower pace in October as the government began a major crackdown on air pollution, ordering many steel mills, smelters and factories to curtail or halt production over the winter. Japan’s retail sales rose in September at the fastest pace in three months as shoppers spent more on clothes and daily goods in a sign that consumer spending remains strong due to a tight labor market. The European markets were trading mostly in green. The UK Net Lending rose to 3.85 billion, from 3.93 billion in the preceding month, which was revised down from 4.04 billion. The amount of lending is correlated to consumer confidence and spending.

Back home, real estate stocks closed mostly in green on report that real estate investment in India’s six major cities doubled to $2.87 billion in the year ended June 2017 as Mumbai attracted maximum capital and was ranked 81st globally. These six cities were able to attract capital because of strong economic drivers, acceleration in reforms, high yields and rapidly modernizing business base.

The BSE Sensex ended at 33267.27, up by 110.05 points or 0.33% after trading in a range of 33206.93 and 33340.17. There were 18 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.19%, while Small cap index was up by 1.27%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.45%, Realty up by 2.23%, Telecom up by 1.65%, Industrials up by 1.23% and Oil & Gas up by 1.13%, while FMCG down by 0.38% and Metal down by 0.16% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors - DVR up by 2.65%, Lupin up by 2.51%, ONGC up by 1.44%, TCS up by 1.39% and Tata Motors up by 1.38%. (Provisional)

On the flip side, Hindustan Unilever down by 1.59%, ITC down by 1.56%, Coal India down by 0.93%, Mahindra & Mahindra down by 0.88% and Asian Paints down by 0.82% were the top losers. (Provisional)

Meanwhile, an international financial institution, World Bank (WB) in its latest ‘Private Participation in Infrastructure (PPI)’ report has said PPI investment commitments in India along with other two emerging market developing economies (EMDEs) -- Brazil and Turkey, have declined sharply in 2016. The report noted that though a recovery marked in private infra investments in the first half (H1) of 2017 with increase of 24% over H1 2016, India has lagged by being not part of it.

The report said that the reasons behind the decline in private investments in India are aggressive bidding by private players in power, highways etc, and liberal lending by banks without duly assessing projects which resulted in the twin balance sheet problem of over-leveraged corporates and banks with stressed assets. As per WB report, PPI investment in EMDEs in H1 2017 increased by 24 percent, from $29.5 billion in H1 2016 to $36.7 billion, which stood still lower than historical levels.

The report further said that the lower investment relative to the five-year average is largely driven by declining private investment in infrastructure in three key markets - India , Turkey and Brazil, which together accounted for a majority of investment during 2011-2015 with a 58% share. WB added that though they still continued to be heavyweights, the momentum slowed in 2016.

The CNX Nifty ended at 10366.40, up by 43.35 points or 0.42% after trading in a range of 10344.30 and 10384.50. There were 30 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 2.61%, Bharti Infratel up by 2.46%, Lupin up by 2.22%, Eicher Motors up by 1.80% and Tata Motors up by 1.80%. (Provisional)

On the flip side, HCL Tech down by 1.81%, Hindustan Unilever down by 1.70%, ITC down by 1.50%, Wipro down by 1.33% and Mahindra & Mahindra down by 1.12% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 10.56 points or 0.08% to 13,228.10, France’s CAC increased 2.17 points or 0.04% to 5,496.30, while UK’s FTSE 100 decreased 9.9 points or 0.13% to 7,495.13.

Asian equity markets made a mixed closing on Monday despite Wall Street shares closing at fresh record highs on Friday after the release of upbeat corporate earnings results as well as solid GDP data. Chinese stocks posted their biggest one-day slide in 11 weeks, dented by expectations of a new wave of initial public offerings and a further rise in bond yields, signaling tighter liquidity. Meanwhile, Japanese shares ended on a flat note ahead of key central bank meetings. The BOJ will announce its interest rate decision on Tuesday while the US Federal Reserve ends its two-day policy meeting on Wednesday. The Bank of England will also announce its interest rate decision on Wednesday.