Post Session: Quick Review

Indian equity markets traded with volatility and ended with cut of around four tenth of a percent. Though, the markets entered into green terrain but sharp selling on account of lower GDP forecast and European markets dragged the markets lower with Nifty closing below 10,250 mark. The market breadth was in favour of declines with one stock advancing against two declining ones. The benchmarks made a pessimistic start and traded slightly in red on weak macro economic data as sentiments were dampened after the industrial production growth hit a three-month low of 2.2% in October this year, mainly due to subdued performance of manufacturing and mining sectors coupled with a contraction in output of consumer durables. The IIP grew 4.14% in September this year. Industrial output rose by a meager 2.5% in April-October this fiscal as compared to 5.5% in the same period of 2016-17. Separately, consumer inflation rose to 4.88% in November from 3.58% in October and 3.63% in the year earlier, exceeded the RBI’s forecast of 4.2-4.6% for the second half of the year. The higher-than-expected retail inflation effectively rules out any rate cuts in the near future by the Reserve Bank of India even as industrial growth remains muted.

Buying crept in between with a private survey report, stating that India is the third most optimistic nation in hiring intentions as 22 percent of employers are expected to add more staff in the next three months. It further said that workforce gains were expected across all seven industry sectors monitored and in all four regions. Separately, another private report enlightened that the gap between China and India’s prosperity has narrowed by four ranks since 2016 and to a quarter of what it was in 2012. The upward trend in India’s prosperity is significant in view of the fact that India registered lower GDP growth following demonetization and implementation of the GST reform in 2017. India closed in on China through gains in business environment, economic quality and governance. However, the markets reversed gains and slipped sharply below neutral line after the Asian Development Bank (ADB) lowered India’s GDP forecast for the current fiscal by 0.3 percentage points to 6.7 per cent, attributing it to tepid growth in the first half, demonetization and transitory challenges of tax sector reforms.

Meanwhile, select stock specific action was witnessed in today’s trade as with December 13 being the RBI deadline to resolve the 28 large stressed accounts that the regulator had identified in its second list, banks are set to refer as many as 23 of them for insolvency proceedings. These 28 accounts together account for 40% of the system wide bad loans or worth around Rs 4 trillion. Select cement companies like Kakatiya Cements Sugar & Industries, Burnpur Cement, Prism Cement, Heidelberg Cement India, JK Lakshmi Cement, Shree Cement, Mangalam Cement and JK Cements closed in green on reports that the Supreme Court eased petcoke ban for cement companies. The Supreme Court allowed the cement industry to use petcoke as a feedstock, which had been banned last month to clean up the air in Delhi and its neighbouring states.

On the global front, Asian markets closed mostly in green. Japanese machinery orders bounced back in October with a faster increase than expected, re-affirming the resilience of capital spending - a key driver in the economy’s near two-year expansion. Core machinery orders, a volatile data series regarded as an indicator of capital spending in the coming six to nine months climbed 5.0 percent in October from the previous month. The European markets were trading in red. The jobless rate in the UK was unchanged at a prior 42-year low in October, missing expectations, while wage inflation increased, providing some relief to the cost of living squeeze in Britain. The Office for National Statistics said that the rate of unemployment held steady at 4.3% in October, compared to forecasts for it to drop to 4.2%.

Back home, select stocks from tourism and hotel industry were buzzing in today’s trade on report that the number of foreign tourist arrivals (FTAs) in India in the month of November witnessed a sharp jump of 14.4 per cent over the same period last year. As per the tourism ministry data, the number of foreign tourist arrivals (FTAs) in India last month was 10.5 lakh as compared to 8.78 lakh in November 2016 and 8.16 lakh in November 2015.

The BSE Sensex ended at 33067.60, down by 160.39 points or 0.48% after trading in a range of 32988.82 and 33404.26. There were 6 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.80%, while Small cap index was down by 0.77%. (Provisional)

The only gaining sectoral indices on the BSE were Oil & Gas up by 0.58% and Energy up by 0.25%, while Realty down by 2.11%, Metal down by 1.55%, Capital Goods down by 1.09%, Industrials down by 1.09% and Healthcare down by 1.04% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.44%, ONGC up by 0.57%, TCS up by 0.53%, Dr. Reddy’s Lab up by 0.37% and Wipro up by 0.10%. (Provisional)

On the flip side, Cipla down by 2.07%, Tata Motors - DVR down by 2.04%, Adani Ports & Special Economic Zone down by 1.95%, Power Grid down by 1.38% and ICICI Bank down by 1.35% were the top losers. (Provisional)

Meanwhile, citing tepid economic growth in the first half, demonetisation and transitory challenges of GST, an international development finance institution, the Asian Development Bank (ADB) has scaled down its current fiscal year gross domestic product (GDP) growth forecast for India to 6.7% from prior estimate of 7%. However, it expects GDP to pick up in remaining two quarters of FY18 with the implementation of the government’s structural reform measures like bank recapitalization and easement in compliance of GST.

ADB also revised GDP growth forecast for next fiscal year (FY19) to 7.3%, down from the earlier forecast of 7.4%. In its latest outlook report, ADB noted that even if the economy reversed from 5 consecutive quarters of deceleration in the second quarter of fiscal year 2017, the rebound in the economy was weaker than expected due to rising crude oil prices, soft private investment growth, and weather-related risks to agriculture.

For overall developing Asia, ADB raised its economic growth estimate to 6% for this year from a previous estimate of 5.9%, on the back of stronger exports and domestic consumption fuel growth and excluding Asia’s newly industrialized economies, growth is expected at 6.5% this year.

The CNX Nifty ended at 10202.85, down by 37.30 points or 0.36% after trading in a range of 10169.85 and 10296.55. There were 17 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were HPCL up by 2.14%, Indian Oil Corporation up by 1.86%, BPCL up by 1.69%, Kotak Mahindra Bank up by 1.52% and Ultratech Cement up by 1.04%. (Provisional)

On the flip side, Vedanta down by 2.95%, Cipla down by 2.34%, Adani Ports & Special Economic Zone down by 2.30%, Bajaj Finance down by 1.61% and Yes Bank down by 1.58% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 0.28 points to 7,500.13, Germany’s DAX decreased 16.93 points or 0.13% to 13,166.60 and France’s CAC decreased 6.37 points or 0.12% to 5,420.82.

Asian equity markets ended mostly in green on Wednesday despite a closely watched update from the Federal Reserve on the outlook for the US economy and interest rates. Hong Kong stocks rebounded on Wednesday, underpinned by services and financial firms. Further, South Korea’s KOSPI index rose as reports of South Korea and the US considering delaying joint military drills until after the Pyeongchang Winter Olympics in February helped tourist-reliant companies. Though, Japan’s Nikkei share average ended lower after tech stocks lost ground as they tracked their weaker US counterparts, while Shikoku Electric slumped after a court ruled against the restart of one of its nuclear reactors.