Post Session: Quick Review

Indian equity benchmarks traded on weak note for most part of the day and ended the session with cut of more than one percent, with Nifty posting biggest fall since September 27. The market breadth was in favour of declines with one stock advancing against every three declining ones. The benchmarks made an optimistic start with frontline gauges surpassing their crucial 33,800 (Sensex) and 10,450 (Nifty) levels in early deals but later slipped as sentiments were dampened after oil prices surged overnight and as Trump reviewed military forces in South Korea amid tensions. Separately, some selling crept in with oil prices touching their highest since July 2015 on Monday, a major concern for India’s domestic economy. Every $1 per barrel rise in crude oil prices inflates India’s import bill by $1.33 billion, which can potentially put downward pressure on the domestic currency. It can potentially have a bearing all across from causing a spike in inflation, raising raw material (RM) cost and, thus, profitability for a good section of India Inc, influence the central bank’s interest rate policy and alter the exchange rate dynamics. The rise in oil prices is seen as likely to prevent the Reserve Bank of India from cutting interest rates anytime soon, even as economic growth has slowed to a three-year low - removing a potential trigger for markets.

Meanwhile, a foreign brokerage reported that a year after the Indian government scrapped high denomination currency notes, a wide range of indicators suggest the economy is still coming to terms with the move. The report highlighted that while the initial scenes of long queues of people exchanging notes disappeared within a month or so, the shock measure left a rather lasting impact on informal economic activities, bank deposits and digital transactions. It added that in an economy where 90 percent of employment and over 50 percent of Gross Domestic Product (GDP) is derived from informal activities, this is bound to be a highly disruptive process. Investors failed to draw solace with report that India is expected to remain one of the fastest growing emerging markets with real GDP growth averaging 6.5 per cent over the next five fiscals, though bureaucratic inefficiencies will continue to cap the country’s growth potential. 

On the global front, Asian markets closed mostly in green. Japan’s Nikkei index jumped to a near 26-year-high as foreign investors piled in on expectations of strong earnings. China’s blue-chips index extended its rise to close at a two-year high, aided by robust gains in banking and energy firms, and also drawing strength from the investor confidence. The European markets were trading mostly in red, while sluggishness in the euro boosted the export-oriented DAX to a new record high. A survey showed that British retail spending fell last month at the fastest pace for any October since 2008 as consumers curbed purchases of non-food goods in the face of rising inflation.

Back home, stock specific action was witnessed in select stocks. Lupin tumbled to a four-year low after the drug maker received a warning letter from the USFDA for Goa and Indore plants. Shares of aviation companies like Jet Airways, SpiceJet, and InterGlobe Aviation closed in red on back of surge in crude oil prices on a global scale. IT stocks kept buzzing in today’s trade on account of weak rupee.

The BSE Sensex ended at 33366.01, down by 365.18 points or 1.08% after trading in a range of 33341.82 and 33865.95. There were 5 stocks advancing against 26 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.50%, while Small cap index was down by 1.33%. (Provisional)

The only gaining sectoral indices on the BSE were IT up by 2.10% and TECK up by 1.23%, while Healthcare down by 3.53%, Consumer Durables down by 2.09%, Power down by 2.03%, Energy down by 2.02% and Realty down by 1.99% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 2.87%, TCS up by 1.61%, Wipro up by 0.58%, Kotak Mahindra Bank up by 0.38% and ITC up by 0.08%. (Provisional)

On the flip side, Lupin down by 16.99%, Cipla down by 7.08%, Tata Motors - DVR down by 3.93%, Bharti Airtel down by 3.78% and SBI down by 3.51% were the top losers. (Provisional)

Meanwhile, supporting the government’s continuous drive to make India digital, Reserve Bank of India (RBI) deputy governor N.S.Vishwanathan has said that digitisation can help the country leapfrog over the developed countries. He also stressed on setting up of a public credit registry in India, saying that it would help to further speed up digitisation.

RBI Deputy Governor also highlighted the positive changes in banking system due to digitisation move and added that the move along with several policy changes and an enabling environment have led to increase in digital banking. He further noted recent trends in banking industry, saying that the relevance of ‘brick and mortar’ banking is diminishing and branches are now being replaced with banking outlets as the point of customer services.

Vishwanathan also said that offering of financial services by many institutions have been also reducing the need for intermediation. However, he also expressed concerns over the challenge of cyber security and made a case for strong IT systems for banks to prevent frauds.

The CNX Nifty ended at 10345.90, down by 105.90 points or 1.01% after trading in a range of 10340.80 and 10485.75. There were 11 stocks advancing against 39 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech up by 3.84%, Infosys up by 2.82%, HPCL up by 2.38%, Tech Mahindra up by 2.04% and TCS up by 1.77%. (Provisional)

On the flip side, Lupin down by 16.78%, Cipla down by 7.19%, SBI down by 3.68%, Bharti Airtel down by 3.67% and UPL down by 3.08% were the top losers. (Provisional)

The European markets were trading mostly in red; UK’s FTSE 100 decreased 13.03 points or 0.17% to 7,549.25, France’s CAC decreased 0.82 points or 0.01% to 5,506.43, while Germany’s DAX increased 17.65 points or 0.13% to 13,486.44.

Asian equity markets ended mostly higher on Tuesday after the major US averages hit fresh record closing highs overnight, boosted by rallying oil prices and corporate dealmaking news. Higher commodity prices, including the overnight surge in crude oil prices after a purge of royal family's political rivals in Saudi Arabia helped investors shrug off US President Donald Trump's fiery rhetoric on North Korea and uncertainties related to proposed US tax reform. Chinese shares ended higher, with banking and energy firms leading the surge on optimism over global growth. Further, Japanese shares ended higher, with a weaker yen and optimism over corporate earnings buoying investor sentiment.