Post Session: Quick Review

Wednesday turned out to be a fabulous day of trade for Indian equity benchmarks with frontline gauges ending above their crucial 35,700 (Sensex) and 10,700 (Nifty) levels. Markets started the session on an optimistic note with a report that the Reserve Bank of India (RBI) Governor Urjit Patel told law makers that the note ban’s impact was transient and the economy is robust. He said the economy would get a boost from oil prices cooling off from four-year highs and asserted that the fundamentals were robust. Some support came with Finance Minister Arun Jaitley stating that as many as 3 lakh poor people have benefited from Ayushman Bharat health scheme in the last one-and-a-half months. Meanwhile, Union Shipping Minister Nitin Gadkari, highlighting India’s strategic advantages in the Indian Ocean Region, has said the blue economy is crucial for the country’s economic development. Besides, Prime Minister Narendra Modi, who is travelling to Buenos Aires to attend the 13th G20 summit, has said that he would be discussing ways to meet the new and upcoming challenges of the coming decade with world leaders there.

Markets extended gains to end with a gain of around half a percent with traders taking some encouragement from Commerce and Industry Minister Suresh Prabhu’s statement that he has taken up the issue of declining credit to exporters with the finance ministry to ensure adequate availability of funds to them. Meanwhile, the Reserve Bank of India (RBI) has decided to inject a higher amount of Rs 40,000 crore through purchase of government securities under open market operations (OMOs) in December 2018. Domestic sentiments were optimistic, as banks credit flow to commercial sector has gone up by 15.6% on year-on-year basis, registering highest growth since demonetisation. According to the fortnightly data released by the Reserve Bank of India (RBI), the adjusted non-food bank credit stood at Rs 97.32 lakh crore as on November 9, 2018 as compared to Rs 84.22 lakh crore reported in the year-ago fortnight. Some comfort also came with a private report stating that Indian analytics, data science and big data industry is estimated to be $2.71 billion in revenues and growing at a healthy rate of 33.5% CAGR.

Firm opening in European markets too aided sentiments as UK retail sales growth in November was greater than expected, though retailers are gloomy about activity in the next three months. Asian markets ended mostly in green on hopes for a positive outcome from Donald Trump's high-stakes trade talks with Xi Jinping, while dovish comments from the Federal Reserve's number-two suggested the bank could slow its pace of interest rate hikes.

Back home, banking stocks edged higher as a private report stated that banks' total credit to industry, retail and services doubled to 15.6% on year as of first week of November amid acceleration in consumption and revival of investments’ sentiments. However, telecom sector stocks remained under pressure despite report that regulator Trai will meet top officials of telecom companies on November 28 to discuss the major issues that should be taken up for deliberation during 2019. Power sector stocks edged lower with report that stressing on tough steps to reform power sector, Niti Aayog CEO Amitabh Kant pitched for ban on use of fossil fuel based gensets saying that the government needs to do it before a court order six months down the line.

The BSE Sensex ended at 35716.95, up by 203.81 points or 0.57% after trading in a range of 35605.34 and 35822.16. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.50%, while Small cap index down by 0.48%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 3.58%, TECK up by 2.88%, Consumer Durables up by 0.52% and Energy was up by 0.32%, while Telecom down by 2.87%, PSU down by 2.04%, Realty down by 1.91%, Oil & Gas down by 1.57% and Capital Goods was down by 1.26% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 4.85%, Infosys up by 4.24%, Indusind Bank up by 1.96%, Reliance Industries up by 1.87% and HDFC up by 1.23%. On the flip side, Yes Bank down by 11.66%, Bharti Airtel down by 3.81%, Tata Motors down by 2.69%, ONGC down by 2.67% and Larsen & Toubro down by 2.20% were the top losers. (Provisional)

Meanwhile, Reserve Bank of India (RBI) Governor Urjit Patel, who appeared before the Parliamentary Standing Committee on Finance, has stated that the central bank needed to keep a capital cushion in view of global financial uncertainty.

The RBI governor further said that the economy would get a boost from oil prices cooling off from four-year highs, and said fundamentals were robust. Moreover, he said that credit growth was 15 percent, inflation came down to 4 percent and cash to GDP ratio improved. Talking about the government's demonetisation decision, he said that the impact of November 2016 demonetisation had a transient on the economy.

Besides, talking about the implementation of the Basel III capital adequacy norms for banks, ha said adherence to the global norms was India’s commitment to G-20 nations. Additionally, at present, India's banking system, particularly state-owned banks, is grappling with huge bad loans. Recently, there has been a liquidity crisis for the important NBFC sector following re-payment default by IL&FS.

The CNX Nifty ended at 10728.85, up by 43.25 points or 0.40% after trading in a range of 10699.85 and 10757.80. There were 17 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were TCS up by 4.95%, Infosys up by 4.30%, Zee Entertainment up by 3.95%, Reliance Industries up by 2.17% and HCL Tech up by 1.95%. On the flip side, Yes Bank down by 11.25%, BPCL down by 4.58%, Bharti Airtel down by 4.28%, Indian Oil Corporation down by 3.18% and Tata Motors down by 3.11% were the top losers. (Provisional)

European markets were trading mostly in green; CAC 40 rose 13.62 points or 0.27% to 4,996.77 and DAX was up by 8.18 points or 0.07% to 11,317.29, while FTSE 100 was down by 1.36 points or 0.02% to 7,015.49.

Asian markets closed mostly higher on Wednesday after comments from White House economic advisor Larry Kudlow gave rise to new hopes for a de-escalation of the US-China trade dispute. President Donald Trump remains open to a deal with China and the upcoming G20 summit offers ‘an opportunity to break through what have been disappointing discussions’ in recent months, Kudlow told on Tuesday. Traders also looked ahead to a speech by Fed Chairman Jerome Powell later in the day and the minutes from the Fed's November 7-8 meeting due on Thursday for additional clues on the interest rate outlook. On Tuesday, Federal Reserve Vice Chair Richard Clarida reaffirmed the need for further rate hikes, but cautioned the tightening path would be data dependant. Chinese shares ended up as investors held out hopes for a de-escalation of Sino-US trade tensions. Further, Japanese shares rose sharply to extend gains for a fourth consecutive session, as investors tracking an advance in Wall Street overnight and a cheaper yen.