Benchmarks end F&O expiry session on quiet note

Indian equity markets truly depicted the choppiness of F&O expiry session on Thursday with key gauges ending the session with marginal cut. After making a cautious start, markets traded in a very tight band tad below their neutral lines throughout the session, as traders remain concerned with a report that foreign investors have pulled out $280 million from the Indian markets so far this year, while domestic institutional investors (DIIs) continue to invest more aggressively and have put in a staggering $10 billion. The sentiments weighed down with Credit rating agency Moody’s Investors Service report highlighting that there are risks of India breaching the 3.3% fiscal deficit target for the current financial year as higher oil prices will add to short-term fiscal pressures. Adding to the pessimism, the Reserve Bank of India (RBI) reiterated concerns over rising inflationary pressures this fiscal year due to global and domestic pressures and called for continuous vigil to keep them at bay. Sentiments remained subdued as rupee crashed to a new record low of 70.82 against the dollar and crude oil extends gains due to fall in US crude inventories and expected supply disruptions from Iran and Venezuela.

However, losses remained capped as traders took some solace with RBI’s latest annual report showing that it expects India’s economic growth rate to accelerate to 7.4% in the current financial year (FY19) on pick up in industrial activity and good monsoon. Some comfort came with the government’s statement that demonetisation of high-value currency notes in November 2016 achieved the objectives quite substantially even as the RBI  reported most of the demonetised currency was back with the banks. Traders took note with Finance Minister Arun Jaitley’s statement that India is expected to surpass Britain next year to become world's fifth largest economy. Meanwhile, Union minister for road transport and highways, Nitin Gadkari said that India needs foreign investment, especially in infrastructural development, to arrest free fall of Indian rupee that has hurt the economy.

On the global front, European markets trading in red in early deals, as Germany’s consumer confidence is set to drop slightly in September, but the mood is likely to remain positive due to a stable job market. The survey data from the market research group GfK revealed that the forward-looking consumer sentiment index dropped to 10.5 in September from 10.6 in August. Asian markets ended mostly in red, as worries over the Sino-US trade war persisted and investors looked ahead to the release of Chinese manufacturing data due Friday for direction.

Back home, banking stocks declined with the RBI’s report that bad loans for the banking sector are likely to increase in 2018-19 from the current levels of around 11.5%. Shares of airline companies edged lower, extending their Wednesday’s decline on rise in crude oil prices. However, shares of select public sector undertaking (PSU) banks edged higher on the report that the government has asked the Reserve Bank of India (RBI) to prepare a list of suitable banks for merger. Meanwhile, shares of Anil Ambani led Reliance Group (ADAG) companies edged higher for the second straight day on the back of heavy volumes in an otherwise subdued market.

Finally, the BSE Sensex slipped 32.83 points or 0.08% to 38,690.10, while the CNX Nifty was down by 15.10 points or 0.13% to 11,676.80.

The BSE Sensex touched a high and a low of 38,819.06 and 38,581.83, respectively and there were 15 stocks advancing against 16 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.43%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Utilities up by 1.43%, Telecom up by 1.27%, FMCG up by 1.11%, Healthcare up by 0.85% and Basic Materials was up by 0.82%, while Energy down by 1.06%, Bankex down by 0.38%, Auto down by 0.33%, Consumer Discretionary Goods & Services down by 0.28% and Consumer Durables was down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.03%, Tata Steel up by 2.40%, ITC up by 2.08%, Bharti Airtel up by 2.07% and NTPC up by 1.93%. On the flip side, Indusind Bank down by 1.62%, Maruti Suzuki down by 1.62%, Reliance Industries down by 1.57%, Tata Motors - DVR down by 1.28% and Asian Paints down by 1.15% were the top losers.

Meanwhile, Department of Industrial Policy and Promotion’s (DIPP) Secretary Ramesh Abhishek has expressed confidence that India may further improve its ranking in the World Bank’s ‘ease of doing business’ index this year, on the back of reforms initiated by the government. The World Bank’s ‘ease of doing business’ report is slated to be released in October.

Abhishek has highlighted that last year, India had jumped 30 places to rank 100th in World Bank's 'ease of doing business' ranking among 190 countries, on the back of slew of reforms in taxation, licensing, investor protection and bankruptcy resolution. Besides, he said that several areas, including starting a business and paying taxes, have seen an improvement.

The secretary further said that this is a good time for investments in India. He also expects that Indian economy is likely to touch $5 trillion mark by 2025 and $10 trillion by 2030. He said that they are removing all the bottlenecks and obstacles in areas like logistics and infrastructure, and the department would be setting up a Taiwan Plus cell to hand hold investors in India. He noted that India has attracted $230 billion FDI in the last four years and ‘Invest India’ campaign is facilitating foreign investments worth $90 billion.

The CNX Nifty traded in a range of 11,698.80 and 11,639.70. There were 25 stocks in green as against 25 stocks in red on the index.

The top gainers on Nifty were Sun Pharma up by 3.31%, GAIL India up by 2.45%, Tata Steel up by 2.37%, NTPC up by 2.08% and UPL up by 2.07%. On the flip side, Eicher Motors down by 2.04%, Bajaj Finance down by 1.93%, HPCL down by 1.79%, Indusind Bank down by 1.70% and Maruti Suzuki down by 1.63% were the top losers.

European markets were trading in red; France’s CAC shed 9.31 points or 0.17% to 5,492.02, Germany’s DAX declined 37.71 points or 0.30% to 12,523.97 and UK’s FTSE 100 was down by 46.90 points or 0.62% to 7,516.31.

Asian equity markets ended mostly lower on Thursday, as worries about the escalating Washington-Beijing trade war overshadowed investors’ optimism about the NAFTA trade talks. Chinese shares ended lower as trade fears lingered and investors awaited cues from manufacturing data due Friday. Meanwhile, Japanese shares gave up initial gains to end on a flat note. Retail sales in Japan rose a seasonally adjusted 0.1 percent sequentially in July, a government report showed today. That missed expectations for an increase of 0.2 percent. On an annual basis, retail sales climbed 1.5 percent - exceeding expectations for 1.2 percent and down from 1.8 percent in the previous month.