Post Session: Quick Review

Indian equity benchmarks traded in red for most part of the day on Monday and sharp selloff in last hour of trade largely forced the markets to close near day’s low, as traders remained on sidelines ahead of key economic data for September IIP and October CPI. Markets made a positive start and traded in fine fettle, as traders took some support with RBI data showing that bank credit rose by a healthy 14.41 percent during the fortnight to October 26 despite the overall increase in lending rates, for first time in over five years. Some optimism also came with a private report stating that revaluation of gold reserves and a stronger rupee lifted India’s foreign exchange (forex) reserves by over $1 billion in the week ended November 02. However, markets reversed all of their gains and traded with marginal losses, on the back of weakness in the rupee and rise in global oil prices. Traders turned cautious with former RBI governor Raghuram Rajan’s statement that demonetisation and the Goods and Services Tax (GST) are the two major headwinds that held back India’s economic growth last year, asserting that the current 7% growth rate is not enough to meet the country’s needs.

Key indices extended their downside in the last leg of trade, as the Street remained disappointed with the Reserve Bank cancelling the certificate of registrations of as many as 31 non-banking finance companies (NBFCs) on November 09 for unspecified reasons. Some cautiousness also remained amongst the market-men with a report stating that exports of over half of the 30 sectors closely monitored by the Commerce Ministry were in the negative zone in September. Overall exports in September were contracted by 2.15% to $27.95 billion mainly due to the base impact.  Adding to the pain, a private report stated that corporate earnings have failed to keep pace with the trajectory of nominal gross domestic product (GDP) over the past 10 years. The combined net profit of listed companies has grown at a compound annual growth rate (CAGR) of 4.1 per cent, against 12.9 per cent growth in India’s GDP at nominal prices during the period.

On the global front, Asian markets ended mixed on Monday, ahead of key economic data, such as industrial production figures from China and Japan later in the week. European markets were trading mostly in red. Back home, shipping sector was in focus with the Indian Ports Association (IPA) data showing that India's 12 major ports witnessed a 5.31 percent rise in cargo traffic at 403.39 million tonnes (MT) during April-October of the current fiscal. These top ports had handled 383.05 MT cargo during the corresponding seven-month period of the last fiscal. Besides, auto sector stocks ended lower despite the Society of Indian Automobile Manufacturers’ (SIAM) data showing that domestic passenger vehicle sales rose 1.55% to 2,84,224 units in October as against 2,79,877 units in the same month last year.

The BSE Sensex ended at 34776.63, down by 381.92 points or 1.09% after trading in a range of 34756.80 and 35333.22. There were 4 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.98%, while Small cap index was down by 0.88%. (Provisional)

The few gaining sectoral indices on the BSE were Consumer Durables up by 1.51%, IT up by 0.47% and TECK up by 0.01%, while Auto down by 2.46%, Telecom down by 2.33%, Oil & Gas down by 2.03%, PSU down by 1.92% and Energy down by 1.83% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 1.66%, Kotak Mahindra Bank up by 1.02%, Infosys up by 0.36% and TCS up by 0.35%. (Provisional)

On the flip side, Tata Motors down by 4.68%, Hero MotoCorp down by 4.31%, Tata Motors - DVR down by 3.95%, Maruti Suzuki down by 2.92% and Adani Ports & SEZ down by 2.76% were the top losers. (Provisional)

Meanwhile, after regular and ad-hoc settlement of Integrated GST (IGST) fund, over Rs 11,900 crore has been released to the states by the Centre from GST compensation fund during August-September. Besides, the bi-monthly Goods and Services Tax (GST) compensation paid during the June-July period was Rs 14,930 crore, nearly four-fold jump from Rs 3,899 crore paid in April and May.

The government collected a record Rs 1,00,710 crore from GST in the month of October. The returns filed and taxes collected in October reflect purchase and sale activities of September. The government has settled Rs 15,107 crore to states GST from IGST as regular settlement. Further, Rs 15,000 crore has been settled with the states from the balance IGST available with the Centre on provisional basis at the end of October. Total revenue earned by the state governments after regular and provisional settlement was Rs 52,934 crore in October.

10 states which are facing maximum revenue shortfall during April-August are Puducherry (42%), Punjab and Himachal Pradesh (36% each), Uttarakhand (35%), Jammu and Kashmir (28%), Chhattisgarh (26%), Goa (25%), Odisha (24%), Karnataka and Bihar (20%). The states faced an average 16% shortfall in GST mop-up in the first year of implementation (July 2017-March 2018), which has come down to 13% during April-August of the current fiscal. While only 6 states -- Mizoram, Arunachal, Manipur, Nagaland, Sikkim and Andhra Pradesh -- are facing revenue surplus in the current fiscal, 25 states are staring at a revenue shortfall and have to be compensated by the Centre.

In order to underpin revenues, Finance Secretary Hasmukh Adhia has already held discussions with tax officials in six states -- Punjab, Himachal Pradesh, Puducherry, Jammu & Kashmir, Bihar and Uttarakhand. In 2017-18, the Centre had released Rs 41,147 crore to the states as GST compensation to ensure that the revenue of the states is protected at the level of 14% over the base year tax collection in 2015-16.

The CNX Nifty ended at 10468.30, down by 116.90 points or 1.10% after trading in a range of 10464.05 and 10645.50. There were 9 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were Titan Co up by 5.68%, Tech Mahindra up by 2.08%, Tata Steel up by 1.81%, HCL Tech up by 1.34% and Kotak Mahindra Bank up by 1.29%. (Provisional)

On the flip side, HPCL down by 7.17%, Indian Oil down by 4.80%, Tata Motors down by 4.58%, Hero MotoCorp down by 4.43% and Bajaj Finance down by 4.04% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC decreased 8.91 points or 0.17% to 5,097.84 and Germany’s DAX fell 84.05 points or 0.73% to 11,445.11, while UK’s FTSE 100 was up by 18.31 points or 0.26% to 7,123.65.

Asian markets ended mixed on Monday as global growth worries persisted and investors awaited key economic indicators from China due Wednesday for directional cues. Chinese shares ended higher after the China Securities Regulatory Commission rolled out a series of measures over the weekend to support the private sector. Meanwhile, Japanese shares ended little changed amid lack of fresh catalysts after the US midterm elections.