Post Session: Quick Review

Indian equity benchmarks oscillated between positive and negative terrain and ended the session on a flat note with positive bias. The benchmarks made a cautious start and traded mixed in early deals following sluggish regional cues. The street digested Moody’s India upgrade and focused on Gujarat Assembly elections that will take place next month. The street took note of US-based rating agency Moody’s report that lower taxes and higher public expenditure could widen budget deficit in 2017-18, but steps taken by the government to broaden the tax base and improve spending efficiency would help in narrowing it going forward. It added that a material deterioration in fiscal metrics and the outlook for general government fiscal consolidation would put negative pressure on the rating. Projecting GDP growth to moderate to 6.7% in the current fiscal, from 7.1% last year, Moody’s said while GST and demonetization have undermined growth over the near term, growth will rise to 7.5% in 2018-19 as the disruption fades. Separately, as per private brokerage report, retail inflation, which touched a seven-month high in October, is expected to rise further and cross the 4% mark this month, driven by rise in vegetable and oil prices. The report added that besides the rise in food and oil prices, further implementation of HRA-related hikes by more states and across sectors will also fuel inflationary pressures.

Buying crept in taking support from International Monetary Fund’s (IMF) report that India has climbed up one position to 126th in the ranking of countries based on their Gross Domestic Product (GDP) per capita, but remains at the bottom amongst the BRICS group, while Qatar remains the world’s richest on this parameter. India's GDP per capita went up to $7,170 (Rs 4.66 lakh) in 2017 from $6,690 last year, helping improve its rank by a position to 126th. Meanwhile, Department of Economic Affairs Secretary Subhash Chandra Garg has said that he hopes the growth rate to touch 7% by the end of fiscal year. Garg called the current financial year a transitional one, bearing the impact of major reforms like demonetization and the implementation the new indirect tax system-Goods and Services Tax (GST). Mixed reactions were witnessed in logistics sector stocks on report that the sector will soon get the infrastructure status, which would help the segment raise funds at competitive rates and boost external trade. Logistics, as per the commerce ministry’s definition, includes industrial parks, warehouses, cold storages and transportation. 

On the global front, Asian markets closed mixed, with investors’ sentiments hurt by a retreat on Wall Street. China’s new home prices rose at a slightly faster pace in October after gains had held steady the previous month, as prices remained resilient in the face of falling sales and a tighter liquidity environment. Japan’s export growth held steady in October, suggesting that brisk global demand for Japanese cars and electronics will likely carry its economic recovery into the current quarter. The European markets were trading in red after preliminary coalition talks in Germany collapsed. The Free Democrats have apparently signaled that they could support a minority government made up of the CDU-CSU bloc and the Green party.

Back home, aviation stocks like InterGlobe Aviation, SpiceJet and Jet Airways closed in green on report that India’s domestic air traffic registered a growth of 20.52% in October when airlines flew 10.45 million passengers as compared to 8.67 million during the corresponding period last year. Select cement stocks closed under pressure after the Supreme Court asked all states and Union Territories to consider prohibiting the use of pet coke and furnace oil by industries. The government is considering banning import of pet coke to cut industrial pollution that’s contributing to hazy skies.

The BSE Sensex ended at 33346.68, up by 3.88 points or 0.01% after trading in a range of 33288.21 and 33449.53. There were 15 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.61%, while Small cap index was up by 0.77%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.21%, Metal up by 1.40%, Utilities up by 1.31%, Telecom up by 1.05% and Power up by 0.78%, while IT down by 0.41%, TECK down by 0.20% and Bankex down by 0.09% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 1.83%, NTPC up by 1.30%, ONGC up by 1.24%, Kotak Mahindra Bank up by 1.22% and Bajaj Auto up by 1.09%. (Provisional)

On the flip side, ICICI Bank down by 1.94%, Dr. Reddy’s Lab down by 1.94%, SBI down by 1.50%, Cipla down by 1.28% and Infosys down by 0.96% were the top losers. (Provisional)

Meanwhile, raising optimism over the government's commitments to improve economic efficiency, the SBI Research in its latest report has said that India would need not wait for 13 long years for the next sovereign upgrade by a rating agency, with government’s resolve on fiscal consolidation target along with recent reform measures like Goods and Services Tax (GST) and Bankruptcy and Insolvency code.

The report pointed that the government’s Rs 2.11 lakh crore recapitalisation plan will help banks to tackle the bad loan problem and will also give a push to improve their health. The report further highlighting implementation new tax regime and RERA, said that these moves will improve overall economic and investment sentiment in the country.

The report also noted stability in the country’s inflation and sustainability in current account deficit. However, it raised concern that the markets would factor in a higher fiscal deficit in 2017-18 and it blamed GST for this, as it impacted the centre's short-term revenue. SBI Research report further suggested that the Reserve bank should stop further Open Market Operations (OMO) sales for now as it has been sucking out liquidity since July through OMO.

The CNX Nifty ended at 10296.00, up by 12.40 points or 0.12% after trading in a range of 10261.50 and 10309.85. There were 27 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 3.99%, Yes Bank up by 2.48%, Bosch up by 2.39%, Vedanta up by 2.39% and Coal India up by 2.27%. (Provisional)

On the flip side, Ambuja Cement down by 3.53%, Dr. Reddy’s Lab down by 2.17%, ICICI Bank down by 1.92%, Ultratech Cement down by 1.92% and SBI down by 1.41% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 22.32 points or 0.3% to 7,358.36, Germany’s DAX decreased 40.66 points or 0.31% to 12,953.07 and France’s CAC decreased 5.43 points or 0.1% to 5,313.74.

Asian equity markets ended mixed on Monday as US tax reform uncertainty and a political impasse in Germany dented investor risk appetite and helped spur demand for safe-haven assets. Japanese shares ended lower as the yen strengthened and data showed Japanese export growth weakened unexpectedly in October. Meanwhile, Chinese shares ended higher, aided by a rebound in banking shares even after Beijing set sweeping new guidelines to regulate asset management products. The central bank issued the guidelines on Friday to more strictly regulate asset management businesses, in the government’s latest effort to rein in the risky shadow banking sector which had been channeling money into Chinese stocks, bonds and property.