Post Session: Quick Review

Snapping three days of losing streak, Indian equity benchmarks ended the Monday’s trade near intraday high levels with frontline gauges recapturing their crucial 35,300 (Sensex) and 10,600 (Nifty) levels. Markets started the session on an optimistic note as traders took encouragement with the Organization for Economic Cooperation and Development’s (OECD) statement that India’s economy will grow close to 7.5% in 2019 and 2020. India’s gross domestic product (GDP) grew 6.7% in 2017-18. But, sentiments turned choppy and key gauges entered into red terrain with National Green Tribunal chairman Justice Adarsh Kumar Goel stating that India has earned its pride of place in the world with its economy growing ‘very fast’ but a large number of people still live below the poverty line. The country had no doubt achieved growth but it was not ‘enough’ to meet the aspirations of the freedom fighters who had drafted the Constitution.

But buying which emerged in last leg of trade helped markets to end near intraday high levels as traders took some support with report stating that foreign investors have pumped in Rs 6,310 crore into Indian capital markets this month so far, after pulling out massive funds in October, on easing crude oil prices and a strengthening rupee. Adding to the optimism, SBI Research report stated that following decline in oil prices, the country’s current account deficit (CAD) is expected to touch 2.6% of GDP in the current fiscal against an earlier expectation of 2.8%. Traders reacted positively to the Reserve Bank of India’s (RBI) report that the country’s foreign exchange reserves rose by $568.9 million to $393.580 billion in the week to November 16, mainly due to a spurt in foreign currency assets. Traders took note of a report that the government has increased the outlay by Rs 100 crore to Rs 895 crore for the first phase of the FAME India scheme to promote mass adoption of electric vehicles, having extended the scheme four times.

Firm opening in European counters too aided sentiments after EU leaders backed UK Prime Minister Theresa May's Brexit withdrawal agreement despite last-minute concerns from Spain. Adding some optimism, France's manufacturing confidence has increase in November after easing in the previous two months. Asian markets ended in green, amid bets that US President Donald Trump and his Chinese counterpart Xi Jinping will find a solution to the trade dispute at the Group of 20 summit in Buenos Aires this week.

Back home, aviation industry stocks flied higher with report that the Goods and Services Tax (GST) Council is likely to bring in two petroleum products - natural gas and aviation turbine fuel (ATF) - under the ambit of the new indirect tax system soon. Gems and jewellery sector related stocks edged higher with Commerce and Industry Minister Suresh Prabhu’s statement that he has taken up with the finance ministry the issue concerning credit to the gems and jewellery sector to ensure adequate availability of funds for them. Realty stocks remained in focus with Care Ratings’ latest report stating that India's infrastructural landscape is changing quickly. Over the last four years, the Narendra Modi-led government has focused heavily on infrastructural development, with the total number of projects rising 87%. At present, 1,361 projects are being implemented in the country. Besides, stocks related to coal industry remained in limelight, amid report that the Geological Survey of India (GSI) has found 44 new coal blocks in four states of Eastern India.

The BSE Sensex ended at 35354.08, up by 373.06 points or 1.07% after trading in a range of 34896.07 and 35397.24. There were 21 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index rose 0.06%, while Small cap index was down by 0.15%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 2.20%, Bankex up by 1.27%, Auto up by 1.10%, Telecom up by 0.98% and TECK was up by 0.98%, while Metal down by 1.33%, Healthcare down by 0.87%, Basic Materials down by 0.61%, PSU down by 0.24% and Oil & Gas down by 0.22% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 5.84%, Wipro up by 3.76%, Hindustan Unilever up by 3.73%, Axis Bank up by 2.90% and Asian Paints up by 2.45%. On the flip side, ONGC down by 3.38%, Sun Pharma down by 2.80%, Yes Bank down by 1.94%, Vedanta down by 1.88% and Coal India down by 1.85% were the top losers. (Provisional)

Meanwhile, the Organization for Economic Cooperation and Development (OECD) has stated that it is expecting India’s economy to grow close to 7.5% in 2019 and 2020 as higher oil prices and rupee depreciation put pressure on demand and inflation. India’s GDP at market prices to grow 7.3% in 2019 and 7.4% in 2020 from 7.5% in 2018. It also said that the growth is likely be slow down in 2019 and 2020 mainly on account of tighter financial conditions, higher oil prices, adverse terms of trade, lower growth in partner countries, and rising political uncertainties in India and abroad.

It said that monetary policy will need to be tightened as inflation expectations are trending up and there are several upside risks to inflation. Moreover, it praised the Reserve Bank’s credibility in targeting inflation and said “the projected marginal increases in policy rates will help anchor inflation”.

Besides, on the trade front, it noted that the hike in US tariffs on Chinese imports could benefit India’s exports particularly in the textile sector. Additionally, it has projected global GDP growth to slow from 3.7% in 2018 to 3.5% in 2019-2020.

The CNX Nifty ended at 10628.60, up by 101.85 points or 0.97% after trading in a range of 10489.75 and 10637.80. There were 34 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hero MotoCorp up by 5.42%, Hindustan Unilever up by 4.11%, Wipro up by 3.70%, Axis Bank up by 2.68% and Asian Paints up by 2.67%. On the flip side, Yes Bank down by 3.91%, ONGC down by 3.71%, Sun Pharma down by 2.89%, Coal India down by 2.30% and Dr. Reddys Lab down by 1.92% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 79.71 points or 1.13% to 7,032.57, France’s CAC gained 67.50 points or 1.35% to 5,014.45 and Germany’s DAX was up by 132.42 points or 1.17% to 11,325.11.

Asian markets ended mostly in green on Monday following Friday’s US selloff and another plunge for oil. Investors kept a close watch on the developments on the US-China trade front ahead of the upcoming G20 summit in Buenos Aires, Argentina, at the end of the week. Traders also looked ahead to remarks by Federal Reserve Chairman Jerome Powell and the minutes of the Fed's latest monetary policy meeting later this week for clues on US monetary policy. Japanese shares ended higher as traders returned to their desks after a long holiday weekend. However, Chinese shares ended slightly lower as investors braced for crucial talks between the US and China at the G20 summit in Argentina this week.