Benchmarks end slightly in red on penultimate session of F&O expiry

Indian equity benchmarks ended the choppy day of trade with marginal losses, as traders remained on sidelines ahead of November derivatives expiry and release of September-quarter GDP data tomorrow.  Sentiments also remained dampened 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. Though, markets kept their head above water for most part of the day’s trade with traders taking 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. Some support also came with Meanwhile, Minister for Petroleum and Natural Gas, Dharmendra Pradhan made a strong case for inclusion of natural gas in the GST, saying that if polluting coal can be included, then the environment-friendly fuel certainly deserves a place in the new regime.

However, profit booking in dying hour of trade dragged markets below their neutral lines to end with modest losses. 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. Besides, reports that the Reserve Bank of India is likely to leave interest rates unchanged at its December policy meeting and through the end of next year, too weighed sentiments.

Also, overseas caution prevailed over the latest missile test by North Korea and softness in Chinese shares hit Asian markets. 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.

Back home, realty stocks firmed up on the back of an improvement in affordability, and multiple developments on the policy initiatives front. The government has recently increased the area of a unit on which a first time buyer can avail benefits under the Credit Link Subsidy Scheme (CLSS) scheme of the Pradhan Mantri Awas Yojna (PMAY). Stocks related to insurance sector remained buzzing, as the global rating agency Moody's in its latest report said that non-life insurance sector is likely to maintain its double digit growth over the next three to four years, aided by a higher economic expansion and increased household spending.

Finally, the BSE Sensex declined 15.83 points or 0.05% to 33,602.76, while the CNX Nifty was down by 8.95 points or 0.09% to 10,361.30.

The BSE Sensex touched a high and a low of 33,728.81 and 33,553.12, respectively and there were 18 stocks on gaining side as against 13 stocks on losing side on the index.

The broader indices ended in red; the BSE Mid cap index slipped 0.17%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were Realty up by 0.70%, Consumer Durables up by 0.59%, Telecom up by 0.49%, Capital Goods up by 0.27% and Industrials was up by 0.23%, while Metal down by 0.55%, Bankex down by 0.36%, Basic Materials down by 0.36%, Utilities down by 0.34% and PSU was down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.33%, Adani Ports up by 1.16%, Sun Pharma up by 0.77%, Hindustan Unilever up by 0.75% and Tata Steel up by 0.72%. On the flip side, Axis Bank down by 2.32%, HDFC down by 1.31%, Asian Paints down by 1.18%, SBI down by 1.16% and TCS down by 0.98% were the top losers.

Meanwhile, the ministry of finance has said that India’s news Insolvency and Bankruptcy Code (IBC) ordinance, promulgated by the President, will pave the way for clean business by putting a premium on integrity. It pointed out that the ordinance does not seek to provide any respite to loan defaulters while on the other hand it explicitly prohibits them and their associates from reclaiming assets under resolution at a discount. It added that the ordinance is primarily aimed at safeguarding the public money from being misused by dishonest businesses.

Observing that there were reports that some defaulting promoters were trying to buy assets at huge discounts in clandestine manner, the ministry said that it was moral and ethical responsibility to prohibit entry of such misuse of public money. It also said that business will have to either perform or exit and there is absolutely no room for wilful defaulters or dishonest business. It added that the move is against unscrupulous elements in the business who were using the banks' money irresponsibly.

It also said that despite defaults, the accounts were not realistically declared non-performing assets (NPAs) and were kept under the carpet by restructuring them through further financing. It noted that the ordinance will ensure recovery of bank loans from defaulting corporates and the Reserve Bank of India (RBI) has already taken steps to recover Rs 1.75 lakh crore from 12 corporates under the insolvency law. It added that banks have already filed cases in National Company Law Tribunal for resolution of these 12 cases of big default, which is about 25 percent of the total NPAs.

The CNX Nifty traded in a range of 10,392.95 and 10,345.90. There were 23 stocks in green as against 27 stocks in red on the index.

The top gainers on Nifty were Bosch up by 5.62%, Bharti Infratel up by 1.54%, Wipro up by 1.48%, Adani Ports up by 1.28% and Coal India up by 0.98%. On the flip side, Axis Bank down by 2.50%, Zee Entertainment down by 1.83%, Asian Paints down by 1.72%, Hindalco down by 1.70% and Vedanta down by 1.49% were the top losers.

The European markets were trading mostly in green; France’s CAC increased 27.05 points or 0.5% to 5,417.53 and Germany’s DAX was up by 98.06 points or 0.75% to 13,157.59, while UK’s FTSE 100 was down by 44.17 points or 0.59% to 7,416.48.

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.