Post Session: Quick Review

Monday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges garnered gains of over two percent on the back of widespread buying by participants despite weak global cues and lingering macroeconomic woes. With that, the markets snapped two days of losses in the past two sessions, recapturing their crucial 10,250 (Nifty) and 34,100 (Sensex) bastions. Key indices made an optimistic start and traded with traction, as local investors also cheered with RBI’s statement that it will inject Rs 400 billion into the system in November through a purchase of government securities as it looks to meet festive season demand for funds. The mood remained upbeat with Union Minister of Commerce and Industry and Civil Aviation Suresh Prabhu’s statement that country’s exports rose by 9.8% in the financial year 2017-18, which is the highest rate of growth in last six years. He added that this positive growth in exports has taken place at a time when there is a lot of negative headwinds globally.

Key indices continued their rally to reach at fresh intraday high points in last leg of trade, taking support from a private report that the global economy is expected to achieve an annual GDP growth rate, as measured in constant dollars, of 3.7% between 2018-2020 before dipping to 3.6% between 2021-2023 and, in turn, pass the $100 trillion mark around 2022. Local sentiments also got buttressed with Prime Minister Narendra Modi stating that India is going through a massive transformative phase and international agencies say the country will drive the growth of the global economy in the coming decade as he invited the Indian community in Japan to contribute actively in building a 'new India'. Traders also took note of the Prime Minister's Economic Advisory Council (PMEAC) Chairman Bibek Debroy’s statement that the four-rate slab structure of the Goods and Services Tax (GST) regime is likely to be reduced to three as the process of rationalising India's new indirect tax regime proceeds further.

On the global front, Asian markets ended mixed on Monday, mirroring weak cues from Wall Street and Europe as investors fretted about slowing economic and earnings growth. European markets were trading in green, thanks to encouraging earnings reports and relief that Italy dodged a ratings downgrade. Back home, Pharma stocks ended higher with ratings agency Crisil’s statement that after two consecutive years of single-digit expansion, big Indian drug firms are expected to return to double-digit growth in the current fiscal aided by recovery in US sales, weakening of the rupee and revival of domestic demand.  Sugar sector stocks were in sweet spot on report that over 400 sugar producers and intermediaries are congregating on October 29, to evolve strategies to boost India’s sweetener exports in the current crushing season which began in October.

The BSE Sensex ended at 34120.94, up by 771.63 points or 2.31% after trading in a range of 33341.80 and 34154.60. There were 24 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index surged 2.80%, while Small cap index was up by 2.02%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 4.22%, Realty up by 3.71%, PSU up by 3.59%, Capital Goods up by 3.59%, Energy up by 3.53%, while there were no losers on the BSE sectoral front. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 11.63%, SBI up by 8.06%, Adani Ports &SEZ up by 7.44%, Axis Bank up by 5.33% and Larsen & Toubro up by 5.10%. (Provisional)

On the flip side, Indusind Bank down by 2.27%, Bharti Airtel down by 1.94%, HDFC Bank down by 1.75%, Kotak Mahindra Bank down by 1.69% and Hindustan Unilever down by 0.25% were the top losers. (Provisional)

Meanwhile, with an aim to meet festive season demand for funds, the Reserve Bank of India (RBI) will inject Rs 400 billion into the system in November through a purchase of government securities. For the month of October, the Central Bank has already injected Rs 360 billion into the system through Open Market Operations (OMO).

The RBI has decided to conduct the purchase of Government securities under OMOs for an aggregate amount of Rs 400 billion in the month of November 2018, based on an assessment of the durable liquidity needs going forward. It added that the auction dates and the government securities to be purchased in the respective auctions would be communicated in due course.

The Central Bank said the OMO amount stated is indicative and RBI retains the flexibility to change it, depending on the evolving liquidity and market conditions. The RBI had earlier stated that the system liquidity will move into deficit in the second half of 2018-19 and the evolving liquidity conditions would determine its choice of instruments for both transient and durable liquidity management.

The CNX Nifty is currently trading at 10251.30, up by 221.30 points or 2.21% after trading in a range of 10020.35 and 10275.30. There were 42 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indiabulls Housing Finance up by 12.37%, ICICI Bank up by 11.34%, SBI up by 7.82%, Adani Ports &SEZ up by 7.19% and Dr. Reddys Lab up by 5.29%. (Provisional)

On the flip side, Indusind Bank down by 2.48%, Eicher Motors down by 1.77%, HDFC Bank down by 1.69%, Kotak Mahindra Bank down by 1.61% and Bharti Airtel down by 1.44% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 92.13 points or 1.31% to 7,031.69, France’s CAC was up by 13.08 points or 0.26% to 4,980.45 and Germany’s DAX rose 146.99 points or 1.3% to 11,347.61.

Asian markets ended mixed on Monday, with Chinese stocks leading the declines and settled with a cut of over tow percent, amid worries about U.S.-China trade relations and the health of the tech sector on Wall Street. Moreover, Chinese data over the weekend underscored worries of a cooling economy as profit growth at its industrial firms slowed for the fifth consecutive month in September as sales of raw materials and manufactured goods ebbed. Japanese shares too closed lower amid recent heavy falls in both US and Chinese stock markets. On the economic front, Japan’s retail sales dropped for the first time in four months in September, a government report showed. Retail sales fell 0.2 percent month-on-month, in line with expectations but reversed a 0.9 percent rise in August.