Post Session: Quick Review

Indian equity markets witnessed some profit booking in last hour of trade but ended with gains of more than two tenth of a percent. The benchmarks continued their up-move for fourth consecutive session and the broader markets also participated in rally, backed by positive global cues. The benchmarks made an optimistic start and traded in fine fettle in early deals as sentiments remained upbeat with international rating agency Moody’s report which expecting growth to revive next year, has said a 7.6% GDP expansion can result in corporates reporting a pre-tax profit growth of 5-6% over the next 12-18 months. The rating agency over the weekend had revised upwards sovereign ratings to Baa2 after almost 14 years. According to the rating agency, growth will rebound strongly in 2018 because the supply chain disruptions of 2017 will end soon.

Investors took note that the government has moved a notch closer to achieving its disinvestment target through minority stake sales in state-run companies as it has garnered around Rs 14,500 crore through its latest offering - the Bharat-22 Exchange Traded Fund (ETF). The Bharat-22 ETF, which comprises shares of 22 firms, was oversubscribed four times and saw bids of nearly Rs 32,000 crore coming in, with foreign institutional investors (FII) putting in nearly one-third of the amount bid. Separately, chief economic adviser Arvind Subramanian has said that the government may combine the 12% and 18% slabs for goods and services tax (GST) into one in the near future and reserve the 28% rate only for demerit goods. 

Meanwhile, select consumer durables stocks were buzzing in today’s trade on reports that the government may soon cut rates on consumer durables such as refrigerators and washing machines, which are currently in the 28% tax bracket. The move is likely to be a significant boost for the sector plagued by excess capacity and slowdown. The economy will get a fillip from the likely consumption boost and better compliance in this key sector. Logistics stocks were buzzing after yesterday the government granted infrastructure status to the logistics sector, making it easier for companies operating cold chains, industrial parks and warehousing facilities to raise long-term credit from banks and other financial institutions at low rates, and attract foreign investment.

On the global front, Asian markets closed mostly in green. A poll showed that Singapore’s consumer price index probably edged up slightly in October from a year earlier due to higher private road transport costs, picking up from September’s pace. The all-items CPI in October was forecast to have risen 0.5%, up from 0.4% in September. The European markets were trading in green and the euro hit an eight-day low against sterling, with investors’ sentiments curbed by a political impasse in Germany. Britain’s budget gap unexpectedly widened last month, underscoring finance minister Philip Hammond’s challenge as he juggles calls for more spending in his budget on Wednesday with the prospect of weaker economic growth ahead.

The BSE Sensex ended at 33456.91, up by 97.01 points or 0.29% after trading in a range of 33437.61 and 33625.05. There were 21 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.07%, while Small cap index was up by 0.31%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.86%, Healthcare up by 1.74%, Telecom up by 1.03%, Energy up by 0.95% and Oil & Gas up by 0.86%, while Realty down by 1.19%, Bankex down by 0.19%, PSU down by 0.09% and FMCG down by 0.08% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Dr. Reddy’s Lab up by 4.90%, Sun Pharma up by 4.52%, Bharti Airtel up by 2.21%, Cipla up by 2.02% and Bajaj Auto up by 1.59%. (Provisional)

On the flip side, Coal India down by 1.58%, Power Grid down by 1.05%, ITC down by 1.04%, Kotak Mahindra Bank down by 0.99% and SBI down by 0.83% were the top losers. (Provisional)

Meanwhile, with developing regulatory landscape, implementation of RERA, improvement in macroeconomic environment and a decline in interest rates, global ratings agency, Fitch Ratings in its latest report forecasted a stable outlook for the Indian real estate. The rating agency also expects unsold inventory to fall from peak level in 2018.

The US-based credit rating agency in its report titled ‘2018 Outlook: Property/South and South East Asia’ said the implementation of the Real Estate (Regulation and Development) Act of 2016 (RERA), which came into full force on May 01, 2017, would drive consolidation in 2018. Fitch Ratings also said that the implementation of the new law would continue to reduce the pace of new launches as developers focus on completing existing projects. It added that the introduction of GST, while broadly neutral for the sector is shifting demand towards completed properties as they attract lower taxes.

The report stated that these trends will drive consolidation in 2018 - larger and more financially sound developers will survive, while smaller or highly leveraged companies will likely resort to asset sales to shore up liquidity. As per the report, the unsold inventory for a sample of seven large developers increased to Rs 668 billion at the end of FY17 from Rs 631 billion at the end of FY16.

The CNX Nifty ended at 10319.80, up by 21.05 points or 0.20% after trading in a range of 10315.05 and 10358.70. There were 31 stocks advancing against 19 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddy’s Lab up by 5.40%, Sun Pharma up by 4.19%, Tech Mahindra up by 3.82%, UPL up by 3.58% and Bharti Airtel up by 2.28%. (Provisional)

On the flip side, Indiabulls Housing down by 2.29%, Coal India down by 1.85%, ITC down by 1.39%, TCS down by 1.23% and Power Grid down by 1.15% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 0.8 points or 0.01% to 7,390.26, Germany’s DAX increased 13.06 points or 0.1% to 13,071.72 and France’s CAC increased 8.87 points or 0.17% to 5,349.32.

Asian equity markets ended mostly in green on Tuesday as overnight gains on Wall Street and solid economic data from Germany and the US helped investors shrug off renewed worries over political uncertainty in Germany. Japanese shares rose notably as the greenback remained supported by higher US bond yields. Japanese stocks improved further after large cap stocks such as automakers and manufacturers of factory automation equipment rallied, while North Korean tensions supported defence-related shares.