Post Session: Quick Review

Indian equity benchmarks traded in a narrow range throughout the day and ended the session with modest losses. Investors digested the outcome of Federal Reserve meeting and focused more on corporate earnings. The market breath was mildly in favour of declines with advance decline in ration of 1:1. The benchmarks made a positive start and traded slightly in green as sentiments remained optimistic with a private report stating that India’s Current Account Deficit (CAD) for this financial year is expected to be around $40 billion, or 1.5% of GDP. CAD rose sharply to $14.3 billion, 2.4% of GDP, at the end of first quarter of 2017-18. The report highlighted that July-September CAD is expected at about 1.6% of GDP and accordingly, CAD for the first half of this fiscal (April- September) is likely to be around 2% of GDP. Additionally, labour minister Santosh Gangwar has said that the government is sincerely working towards creating new avenues for jobs and self-employment in the country.

Separately, after a record jump of 30 places in the World Bank’s ease of doing business ranking, India is gearing up to leapfrog into the top 50 with around 90 specific reforms lined up for various ministries. The reforms covering seven ministries are to be implemented by May next year with a focus on reducing the number of processes and moving them online. The maximum improvements targeted are in the areas of construction permits (22) and registering property (14), areas where India still has a low rank. Investors took note that the government may nudge cash surplus central public sector enterprises (CPSEs) to invest in the proposed Rs 1.35 lakh crore bond offering to recapitalize public sector banks. This is among the options being considered by the government. Selling crept in with benchmarks drifting lower as FMCG, Auto and Energy showed some weakness.

On the global front, Asian markets closed mostly in red. China will lower tariffs and step up bank financing to support more imports as the country’s massive trade surplus has a negative impact on its citizens. China runs a vast trade surplus and has been accused by other countries including the United States of protecting domestic firms through unfair trade practices including high import tariffs. The European markets were trading mostly in red. Manufacturers in the euro zone had their strongest month since early 2011 in October as factories struggled to meet booming demand despite adding staff at the fastest rate in at least 20 years.

Back home, Hexaware Technologies closed on firm note after the company reported encouraging result for the September quarter. The mid-sized IT services firm posted 16 per cent rise in consolidated net profit at Rs 142.26 crore for the quarter ended September 30, 2017. This is against a net profit of Rs 122.42 crore in the sequential quarter ended June 30, 2017. Divis Laboratories closed in green on the back of lifting of import alert by the US health regulator. In the month of March the USFDA had issued import alert for the said facility under the two clauses 66-40 and 99-32 of the FDA regulations.

The BSE Sensex ended at 33583.34, down by 16.93 points or 0.05% after trading in a range of 33527.00 and 33657.57. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.44%, while Small cap index was up by 0.37%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 2.50%, Consumer Durables up by 1.46%, Telecom up by 1.02%, Utilities up by 0.67% and Power up by 0.38%, while FMCG down by 0.89%, Auto down by 0.73%, Energy down by 0.33%, Oil & Gas down by 0.33% and Capital Goods down by 0.22% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Lupin up by 3.37%, Sun Pharma up by 2.61%, Power Grid up by 2.30%, Coal India up by 1.84% and Cipla up by 1.76%. (Provisional)

On the flip side, Hero MotoCorp down by 2.48%, ONGC down by 1.52%, ITC down by 1.43%, Hindustan Unilever down by 1.42% and SBI down by 1.41% were the top losers. (Provisional)

Meanwhile, flagging concerns over the financial health of Indian telecom sector, global credit rating agency, Moody's Investors Service in its latest report has said that among the Asian countries, India will be the only country where telecom sector's revenue will continue to decline for sometime amid unprecedented price competition spurred by a new entrant.

As per Moody's recent report on ‘Asia Pacific's telecoms industry’, Indian operators’ profitability will remain under pressure over the next 12-18 months, as pricing competition remains fierce.  However, it said that revenue growth in developed markets will remain in line with expected GDP growth of around 1.5%. It maintained a stable outlook for Asia Pacific's telecoms industry, with the expectations of year-on-year average revenue growth of about 2.0%-2.5% over the next 12-18 months. The report also raised expectations that EBITDA growth will be 0-2% but noted that average margins will contract slightly next year.

The rating agency estimates headwinds from technological changes to Asia Pacific's telecoms industry despite stable outlook.  The report is also hoping that Asia Pacific's telecoms companies will continue to expand into digital media, advertising, and mobile payments to future-proof their revenue streams.

The CNX Nifty ended at 10423.75, down by 16.75 points or 0.16% after trading in a range of 10412.55 and 10453.00. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Aurobindo Pharma up by 3.77%, Lupin up by 3.37%, Sun Pharma up by 2.75%, Power Grid up by 2.69% and Dr. Reddy’s Lab up by 2.28%. (Provisional)

On the flip side, Tech Mahindra down by 4.36%, Hero MotoCorp down by 2.76%, Bharti Infratel down by 2.03%, SBI down by 1.74% and ONGC down by 1.60% were the top losers. (Provisional)

The European markets were trading mostly in red; Germany’s DAX decreased 24.08 points or 0.18% to 13,441.43, France’s CAC decreased 4.53 points or 0.08% to 5,509.76, while UK’s FTSE 100 increased 6.45 points or 0.09% to 7,494.41.

Asian equity markets ended mostly lower on Thursday as investors awaited the announcement of next Fed chief as well as Friday's US jobs report for direction. The dollar pulled back in Asian trading as lingering uncertainty about the US tax bill overshadowed a mildly hawkish FOMC statement. The Federal Reserve on Wednesday left interest rates unchanged as widely expected and offered support for the December rate hike that most economists were predicting. Chinese shares ended lower, as worries resurfaced over a possible economic slowdown and tighter liquidity before year-end. Meanwhile, Japanese shares extended its strong rally to top a new 21-year peak, ahead of a long weekend, with investors piling into miners and companies such as Honda Motor and Sony on robust earnings prospects.