Post Session: Quick Review

Bulls tightened their grip on Indian markets for second day in a row and ended the session with gains of more than half a percent after Moody’s upgraded India’s rating following a gap of 13 years. Nifty Bank ends at record closing high. The market breath was in favour of advances with two stocks advancing against each declining one. The benchmarks made a gap-up opening and traded jubilantly in early deals as sentiments were upbeat after Moody’s Investor Service raised India’s government bond rating, citing continued progress in the nation’s economic and institutional reforms. The rating agency upgraded India’s bond rating to ‘stable’ (BAA2) from ‘positive’ (BAA3) and said reforms being pushed through by the government will help stabilize debt. The agency has also upgraded India’s local currency senior unsecured rating to Baa2 from Baa3 and its short-term local currency rating to P-2 from P-3. Separately, highlighting ‘massive’ economic reforms undertaken by India, Finance Minister Arun Jaitley has said that the country’s economic slowdown has bottomed out and now it should start moving upwards after recovering from the temporary blip. He acknowledged that there was a ‘temporary blip’ as a result of structural changes initiated by the government. Reacting to Moody’s ratings upgrade, Jaitley said that many who had doubts about India’s reform process would now seriously introspect on their position.

Additionally, Commerce and Industry Minister Suresh Prabhu exuded confidence that exports will gather momentum going forward as the economy is on course to double to $5 trillion and become the third largest in the world, over the next few years. Investors took note of Former RBI Governor C Rangarajan’s statement that inflation, which rose to 3.58 per cent in October, may ease by December and remain below the 4 per cent level by the end of the current fiscal. There will be a seasonal decline in food prices by next month. Besides, realty sector stocks were buzzing in today’s trade as the government decided to increase the carpet area of houses eligible for interest subsidy under the Credit Linked Subsidy Scheme (CLSS) for the Middle Income Group (MIG) under Pradhan Mantri Awas Yojana (PMAY). The move also means that the private developers will have incentives to increase scale.

On the global front, Asian markets closed mostly in green, as strong US earnings and a step forward in Congress on US tax reform brightened the mood, even though investors noted that many hurdles remain to passage of a deal on tax cuts. A poll showed that Japan’s exports are expected to have risen for an eleventh straight month in October, led by robust demand for cars and electronics manufacturing equipment as the world’s third-largest economy continues its recovery. The European markets were trading in red with investors eyeing an upcoming speech by European Central Bank President Mario Draghi due later in the day.

Back home, majority of IT stocks closed under pressure as the rupee appreciated against the US dollar and was the best-performing Asian currency. An appreciation in rupee dents top line of IT firms that derive most of their revenues in dollar terms. HDFC Standard Life Insurance Company closed in green after debuting on the exchanges. The IPO, which was open for subscription on November 7-9, was subscribed 4.89 times at a price band of Rs 275-290 per share.

The BSE Sensex ended at 33296.32, up by 189.50 points or 0.57% after trading in a range of 33290.36 and 33520.82. There were 23 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.96%, while Small cap index was up by 0.73%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.55%, Metal up by 1.61%, Consumer Durables up by 1.39%, Bankex up by 1.05% and Healthcare up by 0.95%, while IT down by 1.58%, TECK down by 1.29% and Telecom down by 0.03% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 2.25%, Cipla up by 2.10%, Tata Steel up by 1.87%, ICICI Bank up by 1.83% and Tata Motors up by 1.81%.  (Provisional)

On the flip side, Infosys down by 2.00%, TCS down by 1.46%, Asian Paints down by 1.07%, Wipro down by 1.06% and ONGC down by 0.98% were the top losers. (Provisional)

Meanwhile, raising concerns over the disappointing second quarter earnings, credit rating agency, Care Ratings in its latest report has said that a series of factors like adjustment to GST regime, lower industrial growth and limited pickup in demand have hit the companies’ Q2 performance and have led to a decline of about 1.5% in net profit of Q2 FY18 over a growth of 13.2% in the corresponding period last year.

As per the report titled ‘Corporate Performance: Q2-FY18’, GST regime and low industrial growth have also slowed down net sales growth of the companies to 7% in Q2 FY18, against a growth of 10% in Q2 FY17. The report further noted that the overall performance was skewed due to the performance of banks, oil companies, IT and finance which are guided by other exogenous factors, while excluding these sectors the performance of industry depicts similar trend in Q2 FY18.

Care Ratings further reported that the industry’s net profit excluding banks, IT, oil & refineries, and finance sectors, declined by 4.4% in Q2, as against a growth rate of 15.4% in the corresponding period last year, while net sales grew at a much slower rate of 4.7% in Q2 FY18, as against  growth rate of 11.8% in Q2 FY17.

The CNX Nifty ended at 10271.40, up by 56.65 points or 0.55% after trading in a range of 10270.70 and 10343.60. There were 29 stocks advancing against 21 stocks declining on the index. (Provisional)

The top gainers on Nifty were HDFC up by 2.43%, Cipla up by 2.18%, Maruti Suzuki up by 2.12%, Tata Motors up by 2.00% and Vedanta up by 1.88%. (Provisional)
On the flip side, Tech Mahindra down by 3.18%, Infosys down by 2.32%, Bosch down by 1.54%, TCS down by 1.40% and GAIL India down by 1.31% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 26.92 points or 0.36% to 7,360.02, Germany’s DAX decreased 16.85 points or 0.13% to 13,030.37 and France’s CAC decreased 13.48 points or 0.25% to 5,322.91.

Asian equity markets ended mostly in green on Friday after US House Republicans voted to approve the tax reform bill, a step forward on President Donald Trump's tax reform plan. The sentiments improved further following the firmer lead on Wall Street in the last session. The dollar weakened against the yen while oil held steady but was on track for its first weekly fall in six on supply worries. Chinese shares ended lower on worries over the health of the world’s second largest economy. Data released on Tuesday showed China’s economy cooled further last month, with industrial output, fixed asset investment and retail sales missing expectations as the government extended a crackdown on debt risks and factory pollution. Further, Japanese shares ended higher, helped by gains in most sectors while chip-related stocks such as Sumco and Tokyo Electron outperformed. Although, the yen's strength limited Japanese shares gains.