Post Session: Quick Review

Paring all of their early losses, Indian equity benchmarks saw a strong relief rally in final hours of trade which helped to close the session at intraday high levels on Monday. Markets halted three-day losing streak, with Sensex and Nifty settling above their crucial 36,600 and 11,000 levels, respectively. Key indices opened in red and stayed in the negative terrain for the most part of the day, as traders remain concerned about the RBI's report that India’s external debt declined 2.8% to $514.4 billion at June-end over the previous quarter on account of a decrease in commercial borrowings, short-term debt and non-resident Indian (NRI) deposits. Some pessimism also spread among the investors with India Meteorological Department (IMD) stating that at the end of the four-month-long monsoon season this year, the rainfall recorded in the country as a whole has remained 9 percent short of the normal mark.

However, markets taken a turn towards the positive zone in the last leg of trade and traded with full traction, as sentiments turned optimistic with a monthly survey indicating that India’s manufacturing sector activity improved in September amid gains in new orders, output and employment. The Nikkei India Manufacturing Purchasing Managers' Index strengthened slightly in September to 52.2, up from 51.7 in August. Local investors also cheered with data showing that Goods and Services Tax (GST) mop-up rose to Rs 94,442 crore in September, from Rs 93,690 crore in the previous month. Of the Rs 94,442 crore collected last month, Central GST (CGST) mop-up is Rs 15,318 crore, State GST (SGST) is Rs 21,061 crore, Integrated GST is Rs 50,070 crore (including Rs 25,308 crore collected on imports) and cess is Rs 7,993 crore (including Rs 769 crore collected on imports). Sentiments remained up-beat with ASSOCHAM’s latest report showing that India’s exports hold a promising outlook, with the US economy growing at its best in four years coupled with the rupee depreciation leading to enhanced net revenue realizations.

On the global front, Asian markets ended mixed on Monday, amid lingering trade tension worries. European markets were trading in green, as optimism on the trade war front was lifted by a new US-Mexico-Canada agreement, which is helping world markets enter the fourth quarter on a positive footing. Back home, majority of telecom stocks edged higher after Fitch’s latest report that the new telecom policy will help companies in serving growing data needs, cut costs and reduce red tape. It added private telecom companies’ growth will be supported as the NDCP focuses to expand broadband coverage funded by the universal service obligation fund and in partnership with private telcos. Metal stocks gained, after India's crude steel output increased 3.7% to 8.8 million tonne (MT) in August 2018. According to the World Steel Association (worldsteel), the country had produced 8.5 MT during the same month last year.

The BSE Sensex ended at 36608.78, up by 381.64 points or 1.05% after trading in a range of 35960.65 and 36616.64. There were 23 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.64%, while Small cap index was down by 0.14%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 2.77%, TECK up by 2.29%, Power up by 2.21%, Utilities up by 1.95% and PSU up by 1.87%, while Telecom down by 1.53%, Realty down by 1.25%, Energy down by 1.11%, Consumer Durables down by 0.71% and Capital Goods down by 0.58% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 9.35%, Tata Motors - DVR up by 3.91%, TCS up by 3.45%, SBI up by 3.42% and ICICI Bank up by 3.08%. (Provisional)

On the flip side, Bharti Airtel down by 3.80%, Axis Bank down by 3.24%, Reliance Industries down by 1.96%, Indusind Bank down by 1.90% and Kotak Mahindra Bank down by 1.79% were the top losers. (Provisional)

Meanwhile, expressing hopes on growth of India, Finance Minister Arun Jaitley stated that the ongoing global trade war may have created ‘initial instability’, but will gradually open up opportunities for India to emerge as a bigger trading and manufacturing base. The Trump administration’s decision to impose tariffs on aluminium and steel imports has triggered a trade war with several countries including China, which have announced retaliatory measures.

Jaitley further said some global trends do ‘adversely affect’ India, but going ahead they will open up avenues for the country to grow faster. He said ‘The trade war initially created instability, but eventually may open up greater markets. They will open up India as a bigger trading and manufacturing base and, therefore, we must closely watch the situation as to when the challenge turns into an opportunity.’

Noting that India has been growing faster than major economies in the world, he said ‘I won’t be surprised if for several years to come we continue in that direction. There are opportunities for growth. This is our opportunity to catch up on the slow growth we have experienced in the past. We still have avenues for faster growth.’ He added that faster growth rate means more jobs, more revenues for government and an enriched government spends more money on development.

The Minister said in the last few years formalisation of economy has taken place and Goods and Serives Tax (GST) and demonetisation has helped in this. The number of income tax assessed has hugely increased and assesses registered under GST too have gone up by 74% over earlier indirect tax regime. However, referring to rising oil prices in the international market, he said that it poses a challenge for the economy since India is a net importer of crude oil. The country imports 81% of its oil needs.

The CNX Nifty ended at 11034.75, up by 104.30 points or 0.95% after trading in a range of 10821.55 and 11035.65. There were 36 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 9.26%, Hindalco up by 5.90%, Indiabulls Housing Finance up by 5.14%, TCS up by 3.67% and SBI up by 3.47%. (Provisional)

On the flip side, Bharti Airtel down by 4.00%, Axis Bank down by 3.30%, HPCL down by 3.04%, Ultratech Cement down by 2.78% and Indusind Bank down by 2.17% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 13.09 points or 0.17% to 7,523.29, France’s CAC was up by 16.80 points or 0.3% to 5,510.29 and Germany’s DAX rose 87.48 points or 0.71% to 12,334.21.

Asian markets ended mixed on Monday as trade worries persisted and investors digested weak data from China and Japan. China's official manufacturing purchasing managers index stood at 50.8 in September versus 51.3 in August, raising concerns about the demand outlook. The Caixin manufacturing PMI declined to 50 from 50.6, the lowest since May 2017. While, a key quarterly economic survey by the Bank of Japan showed that business confidence among large Japanese manufacturers declined for the third straight quarter. Separately, the latest survey from Nikkei revealed that the manufacturing sector in Japan continued to expand at a steady pace in September, with a manufacturing PMI score of 52.5, unchanged from the previous month. However, Japanese shares ended higher on earnings optimism, and as the yen extended its weakening trend on news of a new agreement between the US and Canada to replace NAFTA. Markets in China and Hong Kong were closed for holidays.