Post Session: Quick Review

Indian equity markets traded on lackluster note and ended with gains of more than three fourth of a percent. Investors eagerly awaited exit polls results later today after the end of second phase of Gujarat Assembly elections. Markets recouped losses in last hour of trade with Nifty surpassing 10,250 mark. The market breadth was in favour of declines with one stock advancing against two declining ones. The benchmarks made a positive start and traded slightly in green but with caution after the Federal Reserve delivered a much-anticipated interest rate hike that was largely priced in by market. The street remained concerned with the Reserve Bank of India (RBI) data showing that India’s current account deficit (CAD) widened to 1.2 percent of GDP or $ 7.2 billion in July-September, from 0.6 percent of GDP or $ 3.4 billion reported in the same period a year ago. Meanwhile, the trade deficit widened to $32.8 billion in the previous quarter from $25.6 billion a year ago. Investors took note of a report which said that with RBI deadline ending on December 13, 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. In August, the Reserve Bank had asked banks to either resolve 28 more large stressed accounts by December 13 or refer them to the National Company Law Tribunal (NCLT) by December 31. These 28 accounts together account for 40% of the system wide bad loans or worth around Rs 4 trillion. 

Some selling also crept in following the trend of Consumer Price Index (CPI), India’s annual rate of inflation based on wholesale prices too rose in the month of November, due to increasing prices of food and fuel products. The index rose for the second consecutive month, after easing in the month of September to 2.60%. According to the data released by the Ministry of Commerce & Industry, the wholesale price inflation (WPI) surged to 3.93% in November 2017 from 3.59% in October 2017 and 1.82% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 2.74% compared to a build up rate of 3.90% in the corresponding period of the previous year. However, buying emerged in last leg of trade on private report that India’s economic growth has bottomed out and the GDP growth will recover further to 7 percent over the next few quarters but it is likely to take few years to return to 7.5 percent above levels. The report highlighted that the worst is over for India’s GDP growth, while forecasting a growth rate of 6.5 percent for the current fiscal and 7.2 percent in the year thereafter. Separately, banking stocks got a boost on report that the finance ministry has held meetings with the top brass of about half-dozen state-run banks as part of efforts to gauge the capital requirements of the lenders.

On the global front, Asian markets closed mostly in red. China’s central bank nudged up money market rates as authorities sought to defuse financial risks without imperiling the economy, a balancing act that it has managed successfully so far this year as activity remained broadly steady. The European markets were trading in red as investors reacted to the US Federal Reserve’s decision to raise interest rates. Weakness in bank stocks dragged European shares lower as the financial sector caught the cold from US rate hike. Attention was turning to central bank meetings later on Thursday, with the Bank of England and European Central Bank both expected to keep rates on hold.

Back home, select paper stocks were buzzing in today’s trade on report that paper and paperboard imports touched an all-time of 10.5 lakh tonnes in the first half of this fiscal, up 60 percent from 6.5 lakh tonnes logged in the same period last year.

The BSE Sensex ended at 33307.25, up by 254.21 points or 0.77% after trading in a range of 32886.93 and 33321.52. There were 28 stocks advancing against 3 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.17%, while Small cap index was down by 0.28%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 1.22%, Oil & Gas up by 1.20%, Telecom up by 1.15%, FMCG up by 0.91% and Bankex up by 0.79%, while Consumer Durables down by 0.48% was the sole losing index on BSE. (Provisional)

The top gainers on the Sensex were Cipla up by 2.67%, Dr. Reddy’s Lab up by 2.49%, ITC up by 2.24%, Mahindra & Mahindra up by 1.51% and Bharti Airtel up by 1.36%. (Provisional)

On the flip side, TCS down by 2.45%, Sun Pharma down by 0.45% and Power Grid down by 0.17% were the few losers. (Provisional)

Meanwhile, following the trend of Consumer Price Index (CPI), India’s annual rate of inflation based on wholesale prices too rose in the month of November, due to increasing prices of food and fuel products. The index rose for the second consecutive month, after easing in the month of September to 2.60%. According to the data released by the Ministry of Commerce & Industry, the wholesale price inflation (WPI) surged to 3.93% in November 2017 from 3.59% in October 2017 and 1.82% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 2.74% compared to a build up rate of 3.90% in the corresponding period of the previous year.

Component wise, primary articles index, having weight of 22.62%, was up by 1.6% to 135.6 (provisional) from 133.4 (provisional) for the previous month. Among the primary articles, the index for ‘Food Articles’ group rose by 1.8% to 150.6 (provisional) from 148.0 (provisional) for the previous month, the index for ‘Minerals’ group rose by 7.0% to 129.3 (provisional) from 120.8 (provisional) for the previous month and the index for ‘Crude Petroleum & Natural Gas’ group rose by 6.7% to 74.5 (provisional) from 69.8 (provisional) for the previous month. On the flip side, the index for ‘Non-Food Articles’ group declined by 1.9% to 116.9 (provisional) from 119.2 (provisional) for the previous month.

Fuel & Power index having weight of 13.15%, moved up by 1.6% to 95.0 (provisional) from 93.5 (provisional) for the previous month, as index of Mineral Oils and coal also surged.

Manufactured Products constituting the major portion of the index with weight of 64.23% increased by 0.2% to 113.9 (provisional) from 113.7 (provisional) for the previous month. The index for ‘Manufacture of Beverages’ group rose by 0.4% to 119.5 (provisional) from 119.0 (provisional) for the previous month. The index for ‘Manufacture of Tobacco Products’ group surged  4.3% to 155.3 (provisional) from 148.9 (provisional) for the previous month. The index for ‘Manufacture of Textiles’ group was  up by 0.3%to 113.5 (provisional) from 113.2 (provisional) for the previous month. The index for ‘Manufacture of Wearing Apparel’ group grew 0.3% to 137.5 (provisional) from 137.1 (provisional) for the previous month and the index for ‘Manufacture of Leather and Related Products’ group increased by 0.3% to 119.5 (provisional) from 119.1 (provisional) for the previous month.

Besides, the index for ‘Manufacture of Chemicals and Chemical Products’ group rose by 0.4% to 112.2 (provisional) from 111.7 (provisional) for the previous month. The index for ‘Manufacture of Basic Metals’ group moved up by 0.3% to 101.0 (provisional) from 100.7 (provisional) for the previous month. The index for ‘Manufacture of Fabricated Metal Products, Except Machinery and Equipment’ group jumped 2.1% to 111.1 (provisional) from 108.8 (provisional) for the previous month. The index for ‘Manufacture of Machinery and Equipment’ group rose by 0.3% to 109.4 (provisional) from 109.1 (provisional) for the previous month. The index for ‘Manufacture of Other Transport Equipment’ group was up by 0.9% to 110.8 (provisional) from 109.8 (provisional) for the previous month and the index for ‘Other Manufacturing’ group bounced 2.0% to 108.7 (provisional) from 106.6 (provisional) for the previous month.

On the flip side, the index for ‘Manufacture of Food Products’ group was down by 0.3%  to 127.9 (provisional) from 128.3 (provisional) for the previous month . The index for ‘Manufacture of Wood and of Products of Wood & Cork ‘ group declined by 0.5% to 131.6 (provisional) from 132.3 (provisional) for the previous month. The index for ‘Manufacture of Paper and Paper Products’ group decreased by 1.3% to 118.1 (provisional) from 119.6 (provisional) for the previous month. The index for ‘Printing and Reproduction of Recorded Media ‘ group fell 0.4% to 142.5 (provisional) from 143.1 (provisional) for the previous month and the index for ‘Manufacture of Pharmaceuticals, Medicinal Chemical and Botanical Products’ group declined by 0.4% to 121.6 (provisional) from 122.1 (provisional) for the previous month.

Further, the index for ‘Manufacture of Other Non-Metallic Mineral Products’ group was down by 0.4% to 111.4 (provisional) from 111.8 (provisional) for the previous month. The index for ‘Manufacture of Computer, Electronic and Optical Products’ group declined by 1.3%to 110.3 (provisional) from 111.8 (provisional) for the previous month. The index for ‘Manufacture of Electrical Equipment’ group dipped 0.2% to 110.0 (provisional) from 110.2 (provisional) for the previous month. The index for ‘Manufacture of Motor Vehicles, Trailers and Semi-Trailers’ group fell 0.2% to 110.4 (provisional) from 110.6 (provisional) for the previous month and the index for ‘Manufacture of Furniture’ group decreased by 1.7% to 122.5 (provisional) from 124.6 (provisional) for the previous month.

The CNX Nifty ended at 10273.60, up by 80.65 points or 0.79% after trading in a range of 10141.55 and 10276.10. There were 42 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were HPCL up by 3.38%, ITC up by 2.53%, Dr. Reddy’s Lab up by 2.51%, Cipla up by 2.40% and HCL Tech up by 2.15%. (Provisional)

On the flip side, TCS down by 2.64%, GAIL India down by 0.88%, Aurobindo Pharma down by 0.53%, UPL down by 0.50% and Sun Pharma down by 0.41% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 15.28 points or 0.2% to 7,481.23, Germany’s DAX decreased 33.96 points or 0.26% to 13,091.68 and France’s CAC decreased 12.12 points or 0.22% to 5,387.33.

Asian equity markets ended mostly in red on Thursday, with investors digesting a slew of economic reports from the region and reacting to a rate hike in the US. Although most of the markets in the region started off on a slightly positive note, many of these gave up early gains. On Wednesday, the US Federal Reserve had hiked the benchmark interest rate by 0.25%, from 1.25% and maintained the earlier forecast for just three 1/4- point rate hike in 2018. The Federal Open Market Committee raised the GDP estimate from 2.5% for 2018 from an earlier projection of 2.1%, although it projected growth to be 2.1% in 2019 and 2% in the subsequent year. However, inflation is projected to remain shy of the Fed's 2% goal for another year. Amid concerns about inflation, the policymakers said there is no reason to accelerate the expected pace of rate increases. Chinese shares ended lower, after the country’s central bank nudged up money market rate following the widely expected US rate hike, and as mixed data reinforced signs of a modest slowdown in the Asian economic powerhouse. China’s central bank lifted money market rates as authorities sought to defuse financial risks without imperilling the economy. Further, Japanese shares ended lower, as banks and insurer shares weakened in line with lower interest rates while telecommunications shares withered on news that online retailer Rakuten plans to enter the mobile carrier market.