Post Session: Quick Review

Indian equity markets traded in red for most part of the day but managed to end the session with modest gains. The markets recovered from the lows of the day to end in green for eight straight session. The market breadth was in favour of advances with 3 stocks advancing against every 2 declining ones. The benchmarks made a sluggish start to the crucial week of F&O expiry and traded in red in early deals as sentiments remained dampened with Standard & Poor’s decision of retaining its sovereign rating for India at ‘BBB-’ with a stable outlook, dashing hopes of another upgrade after rival Moody’s lifted its rating by a notch after a gap of nearly 14 years. S&P last raised India credit ratings to investment grade, ‘BBB-’ with a stable outlook, from ‘BB+’ in January 2007. Separately, industry body ASSOCHAM enlightened that inflation would remain a key concern for the RBI and the government, dimming hopes of a cut in interest rates. The chamber observed that as uncertainty and apprehension loom over crude oil prices and vegetables, mainly on the back of rising retail prices of onion and tomatoes, it is disrupting household budgets. It pointed out that to that extent, the macro picture may pose a challenge even as corporate India hopes for growth revival, which may now have to depend on factors other than cost of borrowing.

Meanwhile, investors took note that a senior member of the committee on bankruptcy law and one of its architects has voiced his criticism of the Ordinance that bars ousted promoters of an insolvent company from regaining control. Umarji said that the Ordinance is obsessed with large borrowers, can adversely affect the fortunes of struggling small and mid-sized companies looking for a second chance, and can make defaulting companies vulnerable to predators. Such a predator can buy some loan or debt instruments and invoke the bankruptcy code to kill competition and gain market share while the promoter remains a mute spectator. However, buying crept in after Economic Affairs Secretary Subhash Chandra Garg expressed optimism with government’s various reforms like fiscal consolidation drive and note ban and said that India’s second quarter (Q2) growth will be far better than the first quarter (Q1) of the current financial year. Separately, a foreign brokerage firm has time and again reiterated its bullishness on the Indian economy, saying that the country is slated to see tremendous growth in the near future. It expects the second quarter India’s Q2 GDP number growth to be around 6.5%, which will confirm a turn in the growth environment.

On the global front, Asian markets closed mostly in red. Chinese markets closed lower as investors kept an eye on developments in the bond market while South Korea’s Kospi slid on weakness in tech names. Japan’s government is set to compile an extra budget worth around 2.7-2.9 trillion yen ($24-26 billion) for the fiscal year to March 2018, with additional bond issuance of around 1 trillion yen to help fund the spending. The European markets were trading in green as financials gained ground amid fresh deal making activity.

Back home, real estate stocks were buzzing in today’s trade on private report that the number of unsold housing units in the seven major cities stood at 6.85 lakh units at the end of September quarter, a fall of 9% from the year-ago period. Shares of wind and solar companies like Suzlon Energy, Ujaas Energy and Indosolar closed in green as the Ministry of New and Renewable Energy on Friday announced auction of up to 21 GW solar and wind capacities by March 2018.

The BSE Sensex ended at 33723.50, up by 44.26 points or 0.13% after trading in a range of 33540.46 and 33744.77. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.45%, while Small cap index was up by 0.74%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 1.23%, Realty up by 1.02%, Utilities up by 0.80%, Telecom up by 0.77% and Consumer Disc up by 0.67%, while Metal down by 0.59%, IT down by 0.28%, FMCG down by 0.15% and Oil & Gas down by 0.09% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 3.10%, Axis Bank up by 2.86%, ONGC up by 1.44%, SBI up by 1.05% and Wipro up by 0.82%. (Provisional)

On the flip side, Infosys down by 1.38%, Adani Ports & Special Economic Zone down by 1.17%, Tata Motors down by 0.92%, Tata Steel down by 0.71% and Tata Motors - DVR down by 0.66% were the top losers. (Provisional)

Meanwhile, commenting on global rating agency S&P’s decision to keep India’s rating unchanged, Economic Affairs Secretary Subhash Chandra Garg has said that the government is not disappointed with the S&P’s ratings. He said the rating agency has spoken favourably and also estimates that India would grow at 7.6 per cent plus in times to come. Garg further said the rating agency probably gave larger weight to fiscal side and 'that is why they played a little cautious'. However, he expressed optimism with government’s various reforms like fiscal consolidation drive and note ban and said that India’s second quarter (Q2) growth will be far better than the first quarter (Q1) of the current financial year.

Garg added that the economy will grow at a faster pace in the second quarter, noting that the decline path is bottomed out by reversing in growth and economy’s turnaround is very clear. He said 'We are not disappointed but our expectation would be that S&P also takes into account what the government has done' which are favourable for the economy. He also pointed that S&P’s assessment about state debt does not appear to be 'very sound' as states are constrained constitutionally and otherwise not to exceed to the prescribed borrowing limits.

While talking about S&P's status quo, Economic Affairs Secretary said that though the ratings agency did not upgrade India’s rating, but the rating agency has kept similar views like Moody’s, on the country’s structural reforms, growth story and institutional reforms. Moody’s recently had upgraded India’s sovereign rating to Baa2 - the highest since 1988.

The CNX Nifty ended at 10404.55, up by 14.85 points or 0.14% after trading in a range of 10340.20 and 10407.15. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were NTPC up by 3.16%, Axis Bank up by 2.60%, Zee Entertainment up by 1.99%, ONGC up by 1.69% and Bharti Infratel up by 1.37%. (Provisional)

On the flip side, HPCL down by 1.53%, Infosys down by 1.29%, Adani Ports & Special Economic Zone down by 1.24%, Bajaj Finance down by 1.01% and Tata Motors down by 0.90% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 17.87 points or 0.24% to 7,427.51, Germany’s DAX increased 22.78 points or 0.17% to 13,082.62 and France’s CAC increased 12.87 points or 0.24% to 5,403.33.

Asian equity markets ended mostly lower on Monday as investors await key data from the US and China this week for clues on growth and rate outlook. Traders also kept an eye on oil price movements ahead of a major meeting among oil producers on November 30. Japanese shares ended modestly lower in choppy trade after a slightly stronger yen sapped investors’ risk appetite, sending stocks such as chip-related firms lower. Chinese stocks fell sharply on concerns over rising borrowing costs as Beijing stepped up a crackdown to fend off financial risks. Further, Hong Kong shares closed lower, as investors largely shrugged off data showing profits at China’s industrial firms continued to grow at a robust pace last month despite a slight cooling from a sizzling September.