Last hour recovery helps markets to close with marginal gains

Last hour recovery helped Indian equity markets to close with marginal gains on Wednesday. The start of the day was on cautious note, amid a report stating that corporate India's merger and acquisition activity in the July-September quarter witnessed a downtrend with total deal value falling by more than half over the last year, largely owing to a slump in economic activity and lack of big ticket deals. Key indices traded near their neutral lines during the day, as India Ratings & Research (Ind-Ra) believes that aggregate states’ fiscal deficit slippage to 2.9% of GDP in FY19 revised estimate (RE), from 2.6% in FY19 budget estimate (BE) (Ind-Ra forecast: 2.8%) is mainly due to an expansionary fiscal policy followed by the state governments. 

Despite flat trade, bourses managed to keep their heads above water for the most part of the session, supported by a report that the Department for Promotion of Industry and Internal Trade (DPIIT) is planning to set up a single window system to support foreign investors, who want to invest in India. The single-window system may have representatives from both the Centre & state governments. The system will help in getting all relevant approvals and clearances required by foreign investors. Some relief also came, after the International Monetary Fund sees Indian economic growth rebounding to around 7 per cent in the next financial year, supported by measures like monetary policy stimulus & corporate income tax cuts.

On the global front, European markets were trading mixed, as France manufacturing confidence weakened to the lowest level in more than four years in October. The survey results from the statistical office Insee showed that the manufacturing sentiment index fell to 99 in October from 102 in September. This was the lowest reading since March 2015. Asian markets ended mostly in red territory, after the International Monetary Fund downgraded Asia's growth outlook citing prolonged global policy uncertainty and slowing growth in China and India. According to the latest economic assessment for Asia and the Pacific, the region will grow only 5 percent this year instead of 5.4 percent due to weak trade and investment.

Back home, select banking sector stocks ended lower as global rating agency, Fitch Ratings in its latest study showed that amid systemic crisis in the non-banking financial company (NBFC) sector, banks may face a capital shortfall of about $50 billion (about Rs 3.5 trillion). Further, metal stocks remained in watch, amid reports that domestic hot-rolled coil (HRC) prices fell to a 34-month low of Rs 34,250 a tonne during the second week of October, owing to subdued demand. HRC prices ruled at Rs 42,250 a tonne in January 2019. The rates kept on hovering around Rs 40,000-41,000 per tonne from March-end till July-end and from July-end kept on falling to reach a level of Rs 34,250 a tonne during the second week of October.

Finally, the BSE Sensex gained 94.99 points or 0.24% to 39,058.83, while the CNX Nifty was up by 15.75 points or 0.14% to 11,604.10.

The BSE Sensex touched a high and a low of 39,196.67 and 38,866.08, respectively and there were 20 stocks advancing against 11 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index fell 0.08%, while Small cap index was up by 0.25%.

The top gaining sectoral indices on the BSE were Auto up by 1.18%, IT up by 1.15%, Consumer Durables up by 0.80%, Power up by 0.75% and Consumer Disc up by 0.53%, while Telecom down by 3.04%, Oil & Gas down by 1.45%, Energy down by 1.43%, Realty down by 1.08% and Industrials down by 0.45% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 2.93%, Maruti Suzuki up by 2.55%, SBI up by 1.87%, Tata Motors - DVR up by 1.53% and HDFC up by 1.35%. On the flip side, Bharti Airtel down by 3.59%, Vedanta down by 1.95%, ONGC down by 1.53%, Reliance Industries down by 1.51% and Kotak Mahindra Bank down by 1.31% were the top losers.

Meanwhile, Telecom Regulatory Authority of India (TRAI) has suggested exempting certain categories like data/internet based and captive contact centres from detailed registration, retaining it for voice-based outsourced other service providers (OSPs). It said only voice based, outsourced OSP need to have registration at par with existing process. Data/internet based OSP would need to furnish intimation only. Notably, though, it has recommended that Contact Centre Service Provider (CCSP)/ Hosted Contact Centre Service Provider (HCCSP) involved in reselling of telecom resources, say bandwidth, would require a Virtual Network Operator or VNO license.

TRAI also said that the CCSPs/HCCSPs who provide only the platform as service including a combination of the components of EPABX, IVR, call handling/administration, call recording, contact centre data analytics, customer relationship management for contact centres, should be required to get registered with Department of Telecommunications (DoT). It said these players should be Indian company, having their data centres in India for providing the contact centre platform to OSPs.

The regulator has also recommended additional clarity in definition of OSP players. It said it expects implementation of its recommendations to create better environment for growth of the sector making India as preferred BPO/ITeS destination. In a major breather to the players, it recommended that the requirement of bank guarantee for availing Work-from-Home (WFH) facility, should be done away with. Elaborating on the terms and conditions for CCSPs/HCCSPs, it said that a complete log and record of the logical partitioning including the call detail records should be maintained by them. These records should be maintained at least for a period of one year. The CCSP/HCCSP should provide these records to DoT or security agencies designated by DoT, as and when required.

The CNX Nifty traded in a range of 11,651.60 and 11,554.40. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 3.53%, Eicher Motors up by 2.51%, Infosys up by 2.33%, Maruti Suzuki up by 2.19% and JSW Steel up by 2.12%. On the flip side, Adani Ports & SEZ down by 6.10%, Bharti Airtel down by 3.66%, Zee Entertainment down by 3.37%, Vedanta down by 2.18% and Grasim Industries down by 1.99% were the top losers.

European markets were trading mixed; UK’s FTSE 100 increased 31.50 points or 0.44% to 7,243.99 and Germany’s DAX increased 10.87 points or 0.09% to 12,765.56, while France’s CAC was down by 22.94 points or 0.41% to 5,634.75.

Asian markets ended mostly lower on Wednesday amid renewed Brexit uncertainty after UK lawmakers rejected Prime Minister Boris Johnson's plan to fast-track his Brexit accord through parliament. Chinese shares ended lower as investors kept an eye on developments surrounding Brexit and Sino-US trade talks. Moreover, Hong Kong shares ended down after a report saying China is drawing up a plan to remove Hong Kong's leader Carrie Lam after months of sometimes violent pro-democracy protests. Meanwhile, Hong Kong's consumer price index rose 3.2 percent year-on-year in September, slower than 3.5 percent increase in August, a government report showed. The latest inflation rate was the lowest since May, when it was 2.8 percent. Though, Japanese shares ended up as the yen held stable, while investors awaited the start of the corporate earnings season.