Markets manage to settle volatile session on positive note

Indian equity benchmarks managed to settle a volatile session on positive note on Wednesday. The start of the day was optimistic, supported with the Reserve Bank of India’s (RBI) data report showing that India’s services exports rose by 10.4% to $18.24 billion in August in the current financial year. The services exports or receipts were $16.53 billion in the same month of 2018. It was at $19.08 billion in July this year. Market participants got relief with the World Bank’s statement that India has halved its poverty rate since the 1990s and achieved a seven plus growth rate over the last 15 years. It also said that India is both critical to the success of global development efforts, including eliminating extreme poverty, and as an influential leader for global goods.

But, volatility emerged over the markets during the session, as the International Monetary Fund (IMF) cut India’s GDP growth projection for the year 2019 to 6.1%, which is 1.2% down from its April projections and noted that the Indian economy is expected to pick up the next year at 7.0 % in 2020. The street also got cautious as tax officers expressed concerns over the faceless income tax assessment system initiated by the Central Board of Direct Taxes, saying it will create procedural difficulties and may hit revenue collections. However, indices managed to end in green terrain, after Chief Economic Advisor K V Subramanian called upon the industry to start making investments, stressing that the fundamentals of the economy are very strong.

On the global front, European markets were trading in red, after German investors' confidence decreased less than expected in October, while their assessment of the current economic situation worsened to the lowest since 2010. The survey data from the ZEW - Leibniz Centre for European Economic Research in Mannheim showed that the ZEW Indicator of Economic Sentiment for Germany dropped slightly to -22.8 from -22.5 in September. Asian markets ended in green, after South Korea's central bank lowered its key interest rate as economic growth is set to fall below projection owing to the continued US-China trade disputes and escalating geopolitical risks. The Monetary Policy Board of the Bank of Korea decided to cut the base rate by 25 basis points to 1.25 percent.

Back home, the shipping sector stocks remained in focus, with Union Minister of State for Shipping Mansukh Mandaviya’s statement that the government will come up with a comprehensive 'Port Grid and Port Development' plan in six months for 204 minor ports in the country to boost coastal shipping and inland waterways, and bring a Bill in Parliament to provide a fillip to major ports. Further, stocks related to the aviation industry also remained in watch, as credit rating agency, ICRA in its latest note has said that Indian airlines international air passenger traffic degrew 8.2% in August as against a 3.9% growth in the domestic volume in the same month, with market share declining to 34.2% in the month on account of under-performance.

Finally, the BSE Sensex gained 92.90 points or 0.24% to 38,598.99, while the CNX Nifty was up by 35.70 points or 0.31% to 11,464.00.

The BSE Sensex touched a high and a low of 38,666.38 and 38,416.67, respectively and there were 16 stocks advancing against 15 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index fell 0.14%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.20%, Realty up by 1.09%, Energy up by 0.94%, TECK up by 0.72% and IT up by 0.69%, while Power down by 1.06%, Utilities down by 0.88%, Metal down by 0.42%, Consumer Disc down by 0.27% and Capital Goods down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 3.57%, ONGC up by 2.05%, HDFC up by 1.88%, HCL Tech. up by 1.55% and Yes Bank up by 1.35%. On the flip side, Hero MotoCorp down by 2.73%, Vedanta down by 2.44%, Asian Paints down by 2.04%, NTPC down by 1.59% and ITC down by 1.54% were the top losers.

Meanwhile, highlighting developments achieved by India, the World Bank has said that the country has halved its poverty rate since the 1990s and achieved a seven-plus growth rate over the last 15 years. It also noted that India is both critical to the success of global development efforts, including eliminating extreme poverty, and as an influential leader for global goods such as addressing climate change.

World Bank is expecting India's growth to continue and elimination of extreme poverty in the decade is within reach and added that the country's development trajectory nonetheless faces considerable challenges. It further said that India will need to achieve greater resource efficiency as it sustains growth, given its resource endowments and large population.

As per the World Bank, India's rapidly growing economy needs investment in infrastructure, an estimated 8.8 percent of GDP or $343 billion a year until 2030. Besides, sustained growth will also need to accelerate inclusion, especially to create more and better jobs.

The CNX Nifty traded in a range of 11,481.05 and 11,411.10. There were 30 stocks advancing against 19 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were BPCL up by 4.31%, Bajaj Finance up by 3.75%, Zee Entertainment up by 3.71%, Grasim Industries up by 3.47% and ONGC up by 3.14%. On the flip side, Hero MotoCorp down by 2.83%, Vedanta down by 2.48%, Hindalco down by 2.36%, Asian Paints down by 1.97% and NTPC down by 1.63% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 13.35 points or 0.19% to 7,198.29, France’s CAC fell 17.69 points or 0.31% to 5,684.36 and Germany’s DAX was down by 6.32 points or 0.05% to 12,623.47.

Asian markets ended mostly higher on Wednesday on expectations that Britain still has a chance of avoiding a messy exit from the European Union. Upbeat earnings results from major US companies too buoyed market sentiment. Hong Kong shares ended higher despite signs of fresh Sino-US tensions over Hong Kong after its Chief Executive, Carrie Lam said the city has slipped into a technical recession since a series of protests began in June. Japanese shares closed higher after weaker yen lifted bluechip exporters, while chipmaking-related stocks advanced following their US peers higher. Japanese shares improved further, according to assessments from regions across Japan, Bank of Japan said that all nine regions across Japan had been either expanding or recovering. Moreover, South Korean shares ended up as the country's central bank lowered its key interest rate, as expected, and left the door open for further easing owing to the continued Sino-US trade disputes and escalating geopolitical risks. However, Chinese shares ended lower on worries that the phase one trade deal could be unravelling.