Post Session: Quick Review

Buying activity which took place in dying hour of trade mainly helped the benchmarks cut their intraday losses on Monday, with Nifty settling above crucial 10,500 mark, while Senesx ended just shy of 35,000 mark. This was the second consecutive day of rise for the domestic markets. Markets made a pessimistic start, on the back of weak macro-economic data. The Central Statistics Office’s (CSO) data showed that India’s retail inflation rate slightly rose to 3.77% in September as compared to 3.69% in August, driven by higher food, fuel prices and a depreciating rupee. On the other hand, the country’s industrial output eased in August with a slower rise of 4.3% as compared to 6.52% in July. Market-men also remained cautious on Securities and Exchange Board of India’s (SEBI) report that capital garnered by Indian companies through issuance of shares to institutional investors dived by 78% to Rs 7,000 crore during the April-August period of the financial year 2018-19 as compared to Rs 31,153 crore raised during the corresponding period of the previous financial year. 

The sentiments remained in lackadaisical mood with data showing that inflation based on wholesale prices rose to a two-month high of 5.13 per cent in September, mainly due to hardening of food prices and rise in cost of petrol and diesel. However, in dying hour of trade, key indices recovered from the lows of the day to end in green, as sentiments turned optimistic with rating agency Crisil Research expecting the corporate revenue growth to grow by around 12 percent for the quarter ended September 30, 2018. This would mark the fourth consecutive quarter of double-digit growth. Some support also came with Economic Affairs Secretary S C Garg’s statement that structural reforms in areas like taxation and bankruptcy are helping the Indian economy in building resilience to global shocks and maintain a robust growth rate despite challenges.

On the global front, Asian Markets ended in red on Monday, as investors’ worries continued about global trade tensions and prospects for economic growth. European markets were trading mostly in green. Back home, banking sector stocks ended lower despite Reserve Bank of India’s (RBI) data showing that bank credit rose by 12.51% to Rs 89.82 lakh crore in the fortnight ended September 28, while the deposits grew by 8.07% to Rs 117.99 lakh crore. Telecom sector stocks were in focus with telecom industry body, the Cellular Operators’ Association of India’s (COAI) statement that the import duty hike on certain communication products will increase industry’s import costs by about 10% adding to financial woes, but asserted that operators are fully aligned to the interest of the nation.

The BSE Sensex ended at 34887.06, up by 153.48 points or 0.44% after trading in a range of 34559.98 and 35008.65. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.67%, while Small cap index was up by 1.41%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 2.51%, Healthcare up by 2.33%, TECK up by 2.29%, Telecom up by 1.17% and Energy up by 0.98%, while Consumer Durables down by 1.12%, Auto down by 0.49%, Consumer Disc down by 0.36%, Metal down by 0.27% and Bankex down by 0.26% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 3.78%, ITC up by 2.18%, TCS up by 1.75%, ONGC up by 1.72% and Wipro up by 1.57%. (Provisional)

On the flip side, Mahindra & Mahindra down by 2.58%, Hindustan Unilever down by 2.34%, Axis Bank down by 1.55%, Vedanta down by 1.54% and Maruti Suzuki down by 1.52% were the top losers. (Provisional)

Meanwhile, emphasizing on the need to strengthen institutions like International Monetary Fund (IMF) to deal with the current financial crisis, Economic Affairs Secretary S C Garg called for quota reforms so that share of developing nations increases in line with their growing economic position. He also pointed out that protectionism, trade tensions and tightening of financial conditions are challenges for the world. In the context of these challenges, he said that the time for building buffer and policy action by the Emerging Market Economies (EMDs) is not there.

Garg has stated that a suitable approach could be the association of the IMF, being at the centre of the GFSN (global financial safety net), at an earlier stage rather than when crisis has already occurred. Hence, he said the strengthening of this Multilateral Institution is crucial. It noted that both, enhancement in the Quantum of Quota Resources and Realignment of Voting Shares should take place so that Quota Shares of EMDCs (Emerging Market & Developing Countries) increase in line with its growing relative economic position in the world. Besides, he mentioned that India had supported the capital increase of the World Bank Group with the expectation that it will deliver on its core development responsibilities articulated in the Forward Look.

The Secretary further said that the additional capital would be put to work expeditiously and leveraged to enhance International Bank for Reconstruction and Development (IBRD) lending volumes and International Finance Corporation (IFC) investments. He added that Human Capital Index has severe flaws and therefore it will not succeed in focusing the attention of the world on building the right kind of human capital, which new technologies will need. He also welcomed the emphasis placed by the World Bank on building human capital but said that he is not so certain about the Human Capital Index in its current form.

The CNX Nifty ended at 10523.35, up by 50.85 points or 0.49% after trading in a range of 10410.15 and 10526.30. There were 28 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were Dr. Reddys Lab up by 5.05%, Cipla up by 4.02%, Infosys up by 3.63%, BPCL up by 2.80% and ITC up by 2.49%. (Provisional)

On the flip side, Bajaj Finserv down by 2.90%, HPCL down by 2.66%, Hindustan Unilever down by 2.46%, Mahindra & Mahindra down by 2.37% and GAIL India down by 2.28% were the top losers. (Provisional)

European markets were trading mostly in green, UK’s FTSE 100 increased 7.51 points or 0.11% to 7,003.42 and Germany’s DAX was up by 37.98 points or 0.33% to 11,561.79, while France’s CAC decreased 6.09 points or 0.12% to 5,089.89.

Asian markets ended in red on Monday as worries about global trade and higher US interest rates lingered. A growing feud between the US and Saudi Arabia over the disappearance of a prominent Saudi journalist also weighed on investors' risk appetite. Chinese shares tumbled to extend last week's rout as traders remained on edge ahead of European Union summit, the Federal Open Market Committee's (FOMC) September meeting minutes and a slew of domestic data, due this week. Further, Japanese shares hit eight-week lows, with automakers coming under heavy selling pressure after reports that the US is seeking currency chapters in trade talks with Japan that would contain a provision about currency manipulation. Investors also digested news that Prime Minister Shinzo Abe will go ahead with an increase in the consumption tax to 10 percent from the current 8 percent in October 2019.