Post Session: Quick Review

Indian equity markets traded on a lackluster note and ended the session with cut of around three tenth of a percent. Benchmarks snapped their eight day winning streak with Nifty closing below 10,400 mark. The market breadth turned in favour of declines with 1 stock advancing against every 1 declining ones. The benchmarks made a sluggish start and traded slightly in red in early deals as sentiments were dampened on report that India’s goods and services tax (GST) collections fell to Rs 83,346 crore in October, from more than Rs 90,000 crore in each of the first three months after the new tax regime was rolled out on July 1. The Finance Ministry said that total collection stood at Rs 83,346 crore till November 27 for the month of October and 50.1 lakh returns were filed for the month. Separately, rating agency CRISIL enlightened that India’s competitiveness in the labour intensive export sectors has been on a declining path in the last decade and needs significant structural reforms that need to be addressed. The agency analyzed the competitiveness of the labour intensive export sectors namely, gems & jewellery, leather & leather products and readymade garments which showed that these have become less competitive over the last decade.

Investors shrugged off ICRA’s report that the success in divestments and encouraging GST collections will help government reduce pressure on the fiscal math. The report said successful subscription of Bharat 22 exchange traded fund launched last week has helped government move closer to its FY18 divestment target of Rs 72,500 crore and it has raised Rs 52,300 crore by the end of November. Besides, investors also failed to get any sense of relief with the Industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest Economic Outlook Survey forecasted India's GDP growth to improve to 6.2 percent in Q2FY18 and rise further to 6.7 percent in Q3FY18.

On the global front, Asian markets closed mixed. The Japanese government stuck to its moderately upbeat view on the economy in November, its monthly economic report showed, saying it remained on a recovery path helped by consumer spending and business investment. The report is the first since the government announced this month that the economy had grown for a seventh straight quarter in July-September - its longest expansion in 16 years - although private consumption had suffered a rare decline. European markets were trading in green as concerns over political tensions in German subsided and market sentiments improved.

Back home, banking stocks were under pressure on ICRA’s report that banks credit provisions are likely to surge to Rs 2.4-2.6 trillion in fiscal 2018 compared to Rs 2 trillion last year due to provisioning for IBC accounts and ageing of NPAs. The report highlighted that the increase in provisioning will result in higher losses for state-run banks during the year. Realty stocks were under pressure as report suggested that there might be a tax on the unsold inventory held by developers. The real estate industry is in a doldrums situation with so many changes; regulatory and goods and services tax (GST) etc. It was weathering those blows and this is supposed to be the next one.

The BSE Sensex ended at 33619.36, down by 105.08 points or 0.31% after trading in a range of 33576.65 and 33770.15. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.05%, while Small cap index was up by 0.25%. (Provisional)

The few gaining sectoral indices on the BSE were Consumer Disc up by 0.19%, FMCG up by 0.07% and Auto up by 0.02%, while Telecom down by 1.43%, Consumer Durables down by 0.81%, Realty down by 0.74%, TECK down by 0.61% and PSU down by 0.59% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 1.51%, Asian Paints up by 1.23%, Coal India up by 0.92%, Bajaj Auto up by 0.58% and HDFC up by 0.56%. (Provisional)

On the flip side, NTPC down by 1.77%, Bharti Airtel down by 1.34%, Sun Pharma down by 1.27%, Infosys down by 1.25% and Tata Motors down by 1.23% were the top losers. (Provisional)

Meanwhile, soothing some concerns of rise in fiscal deficit, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the reform initiatives like disinvestment drive and implementation of Goods and Services Tax (GST) will reduce pressure on the fiscal math of the country, in line with the government’s commitment to achieve the fiscal deficit of 3.2% for fiscal 2018.

As per the report, successful subscription of Bharat 22 Exchange Traded Fund (ETF) is helping the government meet its ambitious Rs 72,500 crore disinvestment target for the current fiscal and as of November 24, 2017, the government has raised in excess of Rs 52,300 crore. The rating agency also expressed confidence of good returns from the divestment strategy in the future, and mentioned that the divestment strategy has a potential to generate Rs 1 trillion and also provide buffer against lower surplus transferred by the Reserve Bank and the likely shortfall from the telecom sector.

It further stated that even though there can be an adverse impact of Rs 11,000 crore on the Central finances due to a commitment of a 14 per cent revenue sharing with the state from central GST to meet their projected shortfall, the final results will not be so bad. It further expects improvement in revenue collection and return filing compliance following GST implementation.

The report found that front-loading of capex is slowing down after witnessing faster capex growth in the initial months of FY18 and there will be no need of any additional budgetary allocation in FY18 for proposed bank recapitalisation and Bharatmala Pariyojana. Further, it suggested that expected revenue shortfall can be covered by higher non-debt capital receipts, noting that this will not create fiscal space for additional spending

The CNX Nifty ended at 10369.10, down by 30.45 points or 0.29% after trading in a range of 10355.20 and 10409.55. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 1.97%, Indiabulls Housing up by 1.51%, Maruti Suzuki up by 1.37%, Asian Paints up by 1.25% and IndusInd Bank up by 1.11%. (Provisional)

On the flip side, Bharti Infratel down by 2.46%, Aurobindo Pharma down by 2.02%, NTPC down by 1.74%, ONGC down by 1.66% and Sun Pharma down by 1.56% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 25.5 points or 0.35% to 7,409.40, Germany’s DAX increased 28.98 points or 0.22% to 13,029.18 and France’s CAC increased 19.95 points or 0.37% to 5,380.04.

Asian equity markets ended mixed on Tuesday as oil prices fell and Beijing stepped up its crackdown on shadow banking and other risky forms of financing. Investors also awaited developments on US tax reform bills ahead of a crucial Senate vote and the confirmation hearing for incoming Federal Reserve Governor Jerome Powell. Japanese shares ended marginally lower after a government source said that Japan has detected radio signals from North Korea that indicate Pyongyang could be preparing for another ballistic missile. The yen reversed gains, helping limit overall losses in the broader market. Meanwhile, Chinese shares ended higher as investors hunted for bargains at lower levels after recent declines.