Post Session: Quick Review

Indian equity markets traded on a firm note throughout the day and ended the session with modest gains for the seventh straight session. The market breadth was in favour of advances with 3 stocks advancing against every 2 declining ones. The benchmarks made an optimistic start with frontline gauges recapturing their crucial 33,600 (Sensex) and 10,350 (Nifty) levels in early deals as traders took support with a private report that the slowdown in the economy has bottomed out, and going forward, the pace of recovery will depend on initiatives the government takes to boost growth momentum, especially private investment. The report added that there has been improvement on some parameters of the economy following the slowdown, post demonetization and GST. Some optimism also crept in on report that the global ratings agency Standard & Poor’s (S&P) will revise India’s sovereign ratings. In 2012, the outlook for the country was lowered to negative, which was raised to stable soon after the Modi government assumed office in 2014. The rating, however, remained unchanged at ‘BBB-’. Separately, Union minister Suresh Prabhu’s said that the commerce and industry ministry is chalking out a proper business plan based on market research in its bid to promote exports of goods and services. He added that a proper market segmentation is the need of the hour to understand the potential of domestic goods and services.

Adding to the optimism, Prime Minister Narendra Modi said direct transfer of government benefits using technology, bank accounts and biometric identifier Aadhaar has helped save $10 billion in subsidies. Some support also came with Confederation of Indian Industry’s (CII) statement that the government's recent move to give infrastructure status to the logistics industry in India, will not only spur growth, but will also bring in more investments into this sector. Moreover, the broader markets were also performing well with gains of more than 0.50%, in line with larger peers. Additionally, the President’s assent to the ordinance to amend the Insolvency and Bankruptcy Code (IBC) that will bar defaulters from bidding for the stressed assets received thumbs up from stakeholders who described it as a major step towards providing comfort to incoming new investors. Investors took note that the Securities and Exchange Board of India (SEBI) is planning to ease takeover rules to speed up the resolution of insolvency proceedings for stressed companies as local lenders seek to recover about Rs 9 lakh crore from entities rendered unviable by the mounting debt pile.

On the global front, Asian markets closed mostly in green. Japanese manufacturing activity expanded at the fastest pace in more than three years in November as output, new orders, and new export orders all accelerated in a sign the economy will continue its growth streak. The Markit/Nikkei Japan Manufacturing flash Purchasing Managers Index (PMI) rose to 53.8 in November on a seasonally adjusted basis from a final reading of 52.8 in October. The European markets were trading mostly in green. The growing prospect of a grand coalition in Germany boosted sentiments around the region’s equities, as the DAX has been stuck around the 13,000-point level for the past two weeks.

Back home, PSU banking stocks were under pressure in today’s trade as the amendment to the IBC that bars promoters from bidding for their own distressed companies could impact lenders as it would bring down the value of these assets. Mixed reactions were displayed in hospital stocks on report that India may soon tighten the control on private hospitals and other clinical establishments, with the central government having decided to urge all states to implement an Act that was passed in 2010 in order to curb malpractices by such establishments.

The BSE Sensex ended at 33676.69, up by 88.61 points or 0.26% after trading in a range of 33639.98 and 33738.53. There were 16 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.51%, while Small cap index was up by 0.38%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.77%, Utilities up by 0.98%, IT up by 0.79%, TECK up by 0.73% and Oil & Gas up by 0.67%, while Metal down by 0.65% and Basic Materials down by 0.31% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 1.71%, Kotak Mahindra Bank up by 1.14%, Mahindra & Mahindra up by 1.06%, Power Grid up by 1.03% and Bajaj Auto up by 0.89%. (Provisional)

On the flip side, Tata Motors - DVR down by 0.97%, SBI down by 0.94%, Dr. Reddy’s Lab down by 0.85%, Hero MotoCorp down by 0.70% and ICICI Bank down by 0.58% were the top losers. (Provisional)

Meanwhile, raising concerns over high tax rates under Goods and Services Tax (GST) regime for some electronic items like printers, monitors and data cables, the Manufacturers’ Association for Information Technology (MAIT) has said that the government’s Make in India electronics plan will be hurt by high GST rates, as the industry has found that the import of such electronics is cheaper than manufacturing them locally. 

The industry body which represents India’s IT hardware sectors and certain manufacturers, further expressed need to put all the IT products in one slab, against different tax rate for the pre-assembled desktops, locally manufactured standalone monitors and data cables. It requested the government to look over this anomaly and further made a case to put IT goods under 18% rate slab considering the importance of IT in government projects. Under the new tax regime, the pre-assembled desktops are charged at 18%, while standalone monitors which are mostly manufactured in the country are charged at 28% , while creating anomaly, desktop computers are imported into India at zero percent and have been put at 18% rate.

MAIT said one slab rate for all IT goods will help local manufacturers build products and contribute to the cause of Digital India.  MAIT praised the government’s Make in India initiative but raised need of concrete policies for the initiative to lessen the burden of imports.

The CNX Nifty ended at 10393.60, up by 44.85 points or 0.43% after trading in a range of 10362.25 and 10404.50. There were 35 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Aurobindo Pharma up by 3.25%, GAIL India up by 1.86%, Bharti Infratel up by 1.71%, Infosys up by 1.69% and IndusInd Bank up by 1.62%. (Provisional)

On the flip side, Hindalco down by 1.47%, Vedanta down by 0.87%, SBI down by 0.85%, ICICI Bank down by 0.70% and Hero MotoCorp down by 0.68% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 7.08 points or 0.05% to 13,015.63, France’s CAC increased 11.5 points or 0.21% to 5,391.04, while UK’s FTSE 100 decreased 21.17 points or 0.29% to 7,396.07.

Asian equity markets ended mostly higher on Friday, with Japanese shares resumed trading a day after a holiday. Otherwise, markets lacked cues from Wall Street, which was closed for the Thanksgiving holiday in the United States on Thursday, and was set to hold a shortened trading session on Friday. Japanese shares ended higher as expectations that the Bank of Japan would buy more exchange-traded funds offset drops in automakers. Meanwhile, Chinese markets closed slightly in green after a big sell-off in the previous day.