Markets stage strong pullback; Sensex logs gains of 580 points

The Indian equities staged strong pullback to end the last trading day of the week with smart gains, aided by positive cues from global markets. After a fabulous start, the markets continued gaining momentum, buoyed by Finance Minister Arun Jaitley’s statement that India can crack into top 50 if it improves on time taken for registering real estate, starting business and enforcement of contracts. Buying got boost also because of a private report that India’s equity market capitalisation would grow at a compound annual rate of 12% to reach $6 trillion by 2028. Domestic sentiments were positive with the Finance Ministry’s statement that Goods and Services Tax (GST) collections in October 2018 crossed the Rs 1 lakh crore mark, after a gap of 5 months, on the back of festive demand, anti-evasion measures. Adding some comfort, Labour Minister Santosh Kumar Gangwar said that as many as 10 million employees were added afresh to avail the benefits of Employees' State Insurance Corporation (ESIC) schemes and more than 10 million people came under the fold of the EPFO.

However, in the last leg of the trade, the key indices pared some of their gains to settle the session off day’s high points.  Trading sentiments got affected as leading stock exchange BSE will delist as many as nine companies from Monday as trading in their shares remained suspended for over 6 months. The market participants also got worried, as the US revoked duty-free concessions on import of at least 50 Indian products, mostly from handloom and agriculture sectors, reflecting the Trump administration's tough stand on trade-related issues with New Delhi. Traders took note of industry body, the Confederation of Indian Industry’s (CII) statement that the country needs to focus on areas like registering property and enforcing contracts to get even better ranking in the World Bank’s ease of doing business index in the coming years. Separately, Department of Industrial Policy & Promotion Secretary Ramesh Abhishek said that India hopes to rise up the World Bank’s Ease of Doing Business index further next year by improving its performance in categories such as paying taxes and insolvency recovery. 

On the global front, European markets were trading in green, as The UK and the European Union have reportedly reached a tentative deal that would grant UK companies continued access to European markets after Brexit. Sentiments got improved, after UK construction sector growth unexpectedly improved in October on a strong rebound in civil engineering, despite slower demand and business optimism at a 6-year low. The survey data from IHS Markit showed that the IHS Markit/CIPS UK construction PMI rose to 53.2 from 52.1 in September. Economists had expected a score of 52.  Separately, UK house prices rose at the slowest pace in nearly five-and-a-half years in October. The figures from the Nationwide Building Society showed that the house price index rose 1.6 percent year-on-year following a 2 percent increase in September. Street had forecast a 1.90 percent gain. Asian markets ended in green, after comments from US President Donald Trump suggested the door is still open for US-China trade talks.

Back home, power stocks ended higher, amid a private report stating that the country's power sector is poised to attract investments worth Rs 11.56 trillion between 2017 and 2022. Investments are expected to flow into thermal, hydro, nuclear and renewables segments. Airlines stocks also flied high, even though rating agency Crisil’s report indicated that domestic airlines are projected to post the steepest losses in a decade in the current fiscal year owing to higher aviation fuel costs and falling rupee. IT stocks remained in focused after the Trump administration introduced a new set of stringent provisions to the H-1B labour application process under which the US employers must disclose the total number of foreigners already employed by them, making it tougher to sponsor fresh foreign workers. Besides, stocks related to agri companies remained in limelight, with Additional Principal Secretary to the prime minister, P K Mishra’s statement that the government is making efforts with an integrated approach and has initiated ‘multiple reforms’ in order to achieve the target of doubling farmers' income by 2022.

Finally, the BSE Sensex surged 579.68 points or 1.68% to 35,011.65, while the CNX Nifty was up by 172.55 points or 1.66% to 10,553.00.

The BSE Sensex touched a high and a low of 35,190.20 and 34,649.80, respectively and there 26 stocks advancing against 5 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.78%, while Small cap index was up by 0.76%.

The top gaining sectoral indices on the BSE were Auto up by 4.05%, Metal up by 3.04%, Basic Materials up by 2.61%, Oil & Gas up by 2.46% and Consumer Disc up by 2.45%, while IT down by 1.32%, TECK down by 0.96% and Healthcare down by 0.48% were the only losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 6.37%, Tata Motors up by 6.29%, Vedanta up by 6.04%, Tata Motors - DVR up by 5.33% and Indusind Bank up by 5.29%. On the flip side, Wipro down by 3.29%, TCS down by 1.28%, Infosys down by 0.65%, SBI down by 0.09% and Sun Pharma down by 0.03% were the top losers.

Meanwhile, with an aim to protect the domestic players and to discourage cheap imports, the government may impose anti-dumping duty on imports of 'Zeolite 4A (Detergent Grade)' chemical, largely used in the detergent industry, imported from China.

After the investigation, the Directorate General of Trade Remedies (DGTR) which ensures a level playing field to the Domestic Industry against the adverse impact of the unfair trade practices, recommended the imposition of the duty on imports of the said chemical originating in or exported from the China, in order to address the injury to the domestic industry.

DGTR suggested imposition of anti-dumping duty for a period of 5 years in the range of $163.9 per tonne to $207.72 per tonne. The final call to impose the duty would be taken by the Finance Ministry. Meanwhile, Gujarat Credo Mineral Industries and Chemicals India had appealed for initiation of anti-dumping investigation.

The CNX Nifty traded in a range of 10,606.95 and 10,457.70. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 6.67%, Maruti Suzuki up by 6.31%, BPCL up by 6.19%, Tata Motors up by 5.82% and Adani Ports and SEZ up by 5.18%. On the flip side, Tech Mahindra down by 3.98%, Wipro down by 3.37%, Dr. Reddy’s Lab down by 1.74%, Cipla down by 1.42% and ZEEL down by 1.31% were the top losers.

European markets were trading in green; UK’s FTSE 100 gained 48.41 points or 0.68% to 7,163.07, France’s CAC surged 63.11 points or 1.23% to 5,148.89 and Germany’s DAX was up by 134.18 points or 1.16% to 11,602.72.

Asian markets ended higher on Friday after reports that US President Donald Trump has asked officials in his administration to start drafting a potential trade deal with Beijing. Investors also looked ahead to the US Labor Department's closely-watched employment report for October due later in the day, with traders expecting employment to climb by 190,000 jobs in the month after an increase of 134,000 jobs in September. The jobless rate is expected to hold at 3.7 percent. It will be the final jobs report before next Tuesday's congressional elections. Chinese shares ended higher on easing trade tensions and after President Xi Jinping promised more support for private firms. Further, Japanese shares logged their biggest single-day gain since March as easing of trade tensions helped lift shares of companies that have large exposure to China.