Post Session: Quick Review

Indian equity markets traded in green for most part of the day but selling in late afternoon session dragged the markets below neutral line. Nifty ended below 10,350 mark while Midcap index held 20,000 mark. The market breadth was mildly in favour of declines with one stock advancing for each declining ones. The benchmarks made a positive start but turned flat with traders staying away from taking risky bets on penultimate session of F&O series expiry. Traders took some encouragement with Prime Minister Narendra Modi’s statement who called upon entrepreneurs from across the globe to make India their base for the world. He said that India has emerged as one of the fastest-growing economies and a happening place with immense opportunities in a number of areas. Separately, as per a report, impatient for faster economic growth, India’s government is lobbying for a reduction in official interest rates in coming months as it expects inflation to stay close to a 4 percent target. Additionally, a private poll enlightened that Indian economic growth likely rebounded in the July-September quarter from the slowest growth in three years, with demand picking up modestly as the effects from a shock ban on high-value currency notes eased.

However, selling crept in, with a private report stating that both Goods and Services Tax (GST) collections as well as its compliance in the first four months since the rollout of the new tax regime remain well be below the target, and the situation is unlikely to improve in the near- term. Sentiments turned pessimistic with a foreign brokerage firm lowering India’s GDP growth forecast for current fiscal to 6.6 percent from the previous 6.8 percent, citing that businesses were still adjusting to the new GST regime and there was limited room for fiscal support. Inflation is expected to edge up on higher commodity prices and stronger demand momentum, whilst the current account and fiscal deficits run the risk of re-widening.

On the global front, Asian markets closed mixed. China’s economy is still facing relatively large downward risks that may become apparent by early 2018. The head of the China Banking Regulatory Commission’s regulatory board said that the country’s economic stimulus measures have been overly strong, resulting in asset bubbles. Annual Japanese retail sales fell for the first time in a year last month, government data showed, as poor weather including two typhoons kept consumers away from stores and restaurants. The European markets were trading mostly in green, while Britain’s FTSE fell, lagging a broad-based rebound in European shares as reports of a breakthrough in Brexit talks lifted sterling, hurting the internationally exposed index.

The BSE Sensex ended at 33567.68, down by 50.91 points or 0.15% after trading in a range of 33556.60 and 33728.81. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.35%, while Small cap index was down by 0.10%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.54%, Realty up by 0.52%, Capital Goods up by 0.30%, Telecom up by 0.28% and Industrials up by 0.13%, while Metal down by 0.72%, Basic Materials down by 0.50%, Bankex down by 0.49%, PSU down by 0.46% and Utilities down by 0.37% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Wipro up by 1.45%, Adani Ports & Special Economic Zone up by 1.06%, Sun Pharma up by 0.84%, Bharti Airtel up by 0.83% and Hindustan Unilever up by 0.73%. (Provisional)

On the flip side, Axis Bank down by 2.26%, SBI down by 1.43%, HDFC down by 1.42%, Asian Paints down by 1.27% and TCS down by 1.00% were the top losers. (Provisional)

Meanwhile, raising serious concern of a whopping six million jobs loss in the garment sector if urgent remedial measures were not taken, the garment exporters have demanded the restoration of duty drawback and Remission of State Levies (ROSL) rates to pre-goods and services tax (GST) levels. Ready-made garment exports dipped about 40 percent to $829.44 million in October.

Before the GST roll out, the average duty drawback that they were getting was 11.5 percent and the Remission of State Levies (ROSL) was an average of 3.5 percent. After the new indirect tax regime implementation, the average drawback has come down to 2.25 percent from 11.5 percent. Garment exporters alleged that the government was making it difficult for them to run their businesses and they had to incur additional compliance costs due to the ‘tardy implementation’ of the GST.

The exporters demanded speedy conclusion of a free trade agreement with Europe for India to regain its export competitiveness, as the industry had to pay 9.8 percent duty for shipping to Europe. They also demanded clarity on the e-wallet mechanism, full refund of blocked taxes and that fabric and other inputs be made available to the garment industry at lower rates. Besides, the country’s exporters are facing intense competition from countries like Bangladesh, Pakistan and Vietnam, due to lower competitiveness.

The CNX Nifty ended at 10348.35, down by 21.90 points or 0.21% after trading in a range of 10347.25 and 10392.95. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bosch up by 5.62%, Bharti Infratel up by 1.44%, Adani Ports & Special Economic Zone up by 1.27%, Wipro up by 1.15% and Sun Pharma up by 0.79%. (Provisional)

On the flip side, Axis Bank down by 2.76%, Zee Entertainment down by 2.09%, Asian Paints down by 1.82%, Hindalco down by 1.76% and Vedanta down by 1.67% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 77.82 points or 0.6% to 13,137.35, France’s CAC increased 20.77 points or 0.39% to 5,411.25, while UK’s FTSE 100 decreased 45.21 points or 0.61% to 7,415.44.

Asian equity markets ended mixed on Wednesday following a record closing high on Wall Street overnight on the back of upbeat economic data and a positive reaction to Fed Chair nominee Jerome Powell's comments regarding financial regulations. Meanwhile, North Korea on Wednesday claimed the successful launch of a new advanced ballistic missile that it said placed the entire US within range. The announcement followed a launch earlier in the day that shattered a 75-day lull in North Korea’s rocket tests and raised concerns that the regime was nearing completion of its advanced weapons programme. Chinese shares ended up, led by property developers and resource firms. Further, a strong rally in financials helped Japanese shares end modesty higher for the day.