Post Session: Quick Review

Indian equity benchmarks reversed all of their gains seen in previous session and ended the Tuesday’s trade in red territory with losses of around half a percent, with Sensex and Nifty settling below their crucial 34,000 and 10,250 levels, respectively. Domestic indices made a cautious start and traded marginally in red amid renewed worries over global trade after a private report stated that the United States is preparing to announce tariffs on all remaining Chinese imports by early December. Traders remained wary with the Reserve Bank of India’s (RBI) data showing that Indian companies’ investment in their overseas ventures fell by 47% to $1.54 billion in September 2018. Indian companies had invested $2.91 billion in their joint ventures (JVs) and wholly-owned subsidiaries (WoS) abroad during September 2017. However, markets soon erased losses and started trading on positive route, as sentiments turned optimistic with a report that India and Japan signed a pact to raise the scope of a bilateral currency swap arrangement to a record $75 billion, aimed at bringing in greater stability in the foreign exchange and capital markets, amid a slide in the rupee in recent months. Some support also came in with Finance Minister Arun Jaitley’s statement that India is close to doubling its tax base in the 2014-19 period. He also said that total tax payers estimated to be 7.5 crore by the end of this financial year 2019, nearly double as compared to about 3.8 crore people were filing income tax in May 2014.

Though, the buying proved short-lived as markets once again entered into red terrain in the second half of the day, as anxiety remained among the investors with a private report also stated that high oil prices are hurting consumers and could also have adverse implications for producers. Major emerging Asian economies such as India and Indonesia have been hit hard this year by rising crude oil prices. Key indices extended their downside, as the Street remained disappointed with credit rating agency, Crisil’s latest report that depreciating rupee puts nearly half of the solar power capacities under implementation worth around Rs 28,000 crore at viability risk. The report also noted that import of solar modules has got costlier due to rupee fall and increased the cost of setting up solar plants.

On the global front, Asian markets ended mostly higher on Tuesday, as hopes for China stimulus helped offset fresh worries over the Sino-US trade frictions. European markets were trading mostly in red, buckling under the weight of disappointing earnings updates as strains rippled through the airline, banking and construction sectors. Back home, education sector were in limelight with Commerce and Industry Minister Suresh Prabhu’s statement that the government will work on promoting the growth of the education sector to help increase the share of overall service sector in the country's economy. Besides, sugar sector stocks too were in focus with report that the Indian Sugar Mills Association said India’s sugar output in the current 2018/19 season is expected to be lower than earlier expectations and could drop further if more sugar gets diverted for ethanol production. The sugar output is now seen at 32 million tonnes for the season that began on October 1, down from its previous forecast of 35-35.5 million tonnes.

The BSE Sensex ended at 33897.36, down by 170.04 points or 0.50% after trading in a range of 33799.79 and 34176.36. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.98%, while Small cap index was up by 0.99%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.78%, TECK up by 1.76%, Capital Goods up by 0.90%, Industrials up by 0.89% and Realty up by 0.80%, while Energy down by 2.72%, Oil & Gas down by 1.79%, Metal down by 1.14%, Bankex down by 0.53% and Power down by 0.24% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 2.71%, Infosys up by 2.58%, SBI up by 2.09%, TCS up by 1.62% and Tata Motors up by 1.34%. (Provisional)

On the flip side, Coal India down by 3.71%, Indusind Bank down by 3.47%, Reliance Industries down by 2.81%, ITC down by 1.73% and Sun Pharma down by 1.69% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India’s (RBI) latest data on outward foreign direct investment (OFDI) showed that investment of Indian companies in their overseas ventures declined by 47.08% to $1.54 billion in September 2018, as compared to $2.91 billion invested in their joint ventures (JVs) and wholly-owned subsidiaries (WoS) abroad during September 2017. Besides, the investment by domestic companies in overseas firms was a mere $992.14 million in August 2018.

According to the data, of the total $1.54 billion investment in September, $950.82 million was in the form of loans, $251.84 million was infused as equity capital and $352.08 million was through the issuance of guarantees. In the September 2017, $1062.66 million was in the form of loans, $384.73 million was infused as equity capital and $1459.94 million was through the issuance of guarantees.

The data also showed that major investors included UPL, which pumped in $408.12 million in its wholly-owned subsidiary in Mauritius, Sanmar Group International infused $77.55 million in WoS in Switzerland and JSW Steel put in $74.87 million in five tranches in its wholly-owned unit and joint ventures located in the US, Italy and Chile. KEC International invested $71.35 million in a JV in Saudi Arabia; ONGC Videsh $59.37 million in its joint-ventures in Russia and Vietnam and Sage Metals put $33.50 million in a wholly-owned unit in the US.

The CNX Nifty ended at 10201.15, down by 49.70 points or 0.48% after trading in a range of 10175.35 and 10285.10. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tech Mahindra up by 3.09%, Hindustan Unilever up by 2.86%, Zee Entertainment up by 2.77%, Grasim Industries up by 2.76% and Infosys up by 2.46%. (Provisional)

On the flip side, HPCL down by 4.84%, BPCL down by 4.42%, Coal India down by 3.93%, Indian Oil Corporation down by 3.89% and Cipla down by 3.87% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC dipped 11.25 points or 0.23% to 4,978.10 and Germany’s DAX was down by 31.23 points or 0.28% to 11,304.25, while UK’s FTSE 100 increased 10.32 points or 0.15% to 7,036.64.

Asian markets ended mostly higher on Tuesday as hopes for China stimulus helped offset fresh worries over the Sino-US trade frictions. US President Donald Trump said he thinks there will be ‘a great deal’ with China on trade, but warned of more tariffs if talks next month fail to ease the trade war. Chinese shares ended higher after the securities regulator said it would enhance market liquidity, and encourage share buybacks and mergers and acquisitions by listed firms. Further, Japanese shares closed higher as the yen extended its drop against the dollar and Chinese equities rebounded on fresh attempts by Beijing to stabilize its stock markets.