Post Session: Quick Review

Extending their previous session’s northward journey, Indian equity benchmarks ended the Tuesday’s session in green terrain with frontline gauges recapturing their crucial 35,500 (Sensex) and 10,650 (Nifty) levels. Markets started the session on pessimistic note as traders remain concerned about a SBI research report stating that the Gross Domestic Product (GDP) growth in the September quarter is expected to decelerate to 7.5-7.6% over the previous three-month period mainly due to a slowdown in rural demand. Traders also reacted negatively to India Ratings and Research’s statement that India is set to miss its fiscal deficit target for the year ending March 2019 due to a shortfall in revenues and lower-than-targeted disinvestment proceeds. The country’s 2019 fiscal deficit target has been pegged at 3.3% of its GDP or Rs 6.24 trillion ($88.45 billion). But the credit rating agency estimated fiscal deficit at Rs 6.67 trillion - or 3.5% of GDP. Sentiments also remained dampened with SEBI’s latest report stating that Indian companies raised funds worth Rs 36,176 crore by issuing securities on public and private placement basis during October, registering a decline of 17% compared to September.

However, investors’ sentiments turned optimistic in second half of trade and markets pared all of their initial losses to end near intraday high levels. Traders took some support with the think-tank’s Vice-Chairman Rajiv Kumar’s statement the Niti Aayog is exploring ways to encourage more domestic companies to be among the top multinational corporations in the world. Some comfort also came with CRISIL Research expecting 2018-19 to be a good one for India’s small and medium enterprise (SME) leather exporters, given a pick-up in demand from the US and expectations of the Donald Trump administration imposing tariffs on Chinese leather footwear - not in the tariff list currently - early next calendar year. The street overlooked the latest data from the World Trade Organization (WTO) showing that global trade growth is likely to further diminish in the ongoing quarter. The index for WTO’s latest World Trade Outlook Indicator (WTOI) for October-December stood at 98.6, the lowest since October 2016. It was 100.3 for July-September.

Firm trade in European markets too supported sentiments despite German business confidence eased for a third consecutive month in November as the economy is cooling down. The results of the survey by the Ifo Institute showed that the Ifo business confidence indicator fell to 102 from 102.9 in October, which was revised from 102.8. Asian markets ended mostly in red after US President Donald Trump said he would likely raise the punitive tariffs on $200 billion of Chinese goods.

Back home, banking sector stocks ended in green with report that the government will infuse Rs 420 billion in the state-owned banks by March-end and the next tranche would be released as early as next month. Auto stocks remained in top gear, aided by industry body CII’s report that the domestic automotive aftermarket, which has grown at a compounded annual growth rate (CAGR) of 14% in the last five years, is expected to touch Rs 75,000 crore by 2020. However, metal stocks remained under pressure amid private report that aluminium companies floundered in domestic sales during the July-September quarter of this fiscal despite robust demand and firm production growth.

The BSE Sensex ended at 35513.14, up by 159.06 points or 0.45% after trading in a range of 35262.97 and 35555.16. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.32%, while Small cap index was up by 0.43%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.67%, TECK up by 1.36%, Energy up by 1.18%, Oil & Gas up by 0.86% and Utilities was up by 0.75%, while Healthcare down by 0.90%, Metal down by 0.80%, Telecom down by 0.67%, Consumer Durables down by 0.20% and FMCG was down by 0.11% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 2.85%, TCS up by 2.33%, Reliance Industries up by 1.48%, Indusind Bank up by 1.33% and Maruti Suzuki up by 1.27%. On the flip side, Sun Pharma down by 3.70%, Hero MotoCorp down by 3.12%, Yes Bank down by 3.03%, Bharti Airtel down by 1.98% and Wipro down by 1.90% were the top losers. (Provisional)

Meanwhile, India Ratings and Research in its latest report has said that India is set to miss its fiscal deficit target for the current financial (FY19) on account of a shortfall in revenues and lower-than-targeted disinvestment proceeds. The rating agency has estimated fiscal deficit at Rs 6.67 trillion or 3.5 percent of GDP for current fiscal. For FY19, the country fiscal deficit target has been pegged at 3.3 percent of its gross domestic product (GDP) or Rs 6.24 trillion ($88.45 billion).

It highlighted that the pressure on government finances is mainly arising from the revenue side, particularly from indirect taxes and non-tax revenue. Moreover, it stated that despite the reforms helping plug leakages in GST collections, aggregate indirect tax collections grew only 4.3 percent in the first half of the year compared with a targeted growth of 22.2 percent for the full year.

India's GST collection for last financial year (FY18) was 98 percent of the budgeted target. Besides, it said that the government is also expected to miss its disinvestment target of Rs 800 billion in 2019, given that it had received only Rs 152.47 billion till the end of October.

The CNX Nifty ended at 10685.60, up by 57.00 points or 0.54% after trading in a range of 10596.35 and 10695.15. There were 25 stocks advancing against 24 stocks declining on the index, while 1 stock remained unchanged. (Provisional)

The top gainers on Nifty were Infosys up by 2.81%, BPCL up by 2.49%, Bajaj Finserv up by 2.48%, TCS up by 2.39% and HCL Tech up by 2.26%. On the flip side, Hero MotoCorp down by 3.83%, Sun Pharma down by 3.31%, Yes Bank down by 2.79%, JSW Steel down by 2.02% and Wipro down by 2.01% were the top losers. (Provisional)

European markets were trading mostly in green; CAC 40 rose 4.43 points or 0.09% to 4,999.41 and DAX was up by 5.25 points or 0.05% to 11,359.97, while FTSE 100 was down by 10.94 points or 0.16% to 7,025.06.

Asian markets closed mostly lower on Tuesday. Investors took trade tensions in stride after US President Donald Trump said in an interview with the Wall Street Journal that it was ‘highly unlikely’ he would delay an increase in tariffs on Chinese goods to 25 percent from 10 percent. Trump also suggested that the US could slap 10 percent tariffs on Apple's iPhones and laptops imported from China. Though, Japanese shares rose notably as a strong start to the holiday season spurred optimism about the US economy.