Post Session: Quick Review

Indian equity benchmarks ended lackluster day of trade marginally in red on Thursday, despite strong trend seen in other Asian markets. Key indices made optimistic start, as investors took some encouragement after India jumped 14 places to the 63rd position on the World Bank’s ease of doing business ranking, riding high on the government’s flagship Make in India scheme and other reforms attracting foreign investment. The country also figured among the top 10 performers on the list for the third time in a row. Some support also came with the Chairman of the Economic Advisory Council to the Prime Minister Bibek Debroy’s statement that India’s Gross Domestic Product (GDP) which is hovering around 5 percent is expected to inch up to 7 percent in the next financial year.

But markets quickly erased all gains and slipped into the red, as traders turned cautious with the Economist Intelligence Unit’s (EIU) statement that India is not likely to benefit from the US-China trade tensions largely owing to existing policy barriers to large-scale production, strict labour laws and difficult land-acquisition process. The sentiments remained in lackadaisical mood as Fitch Ratings slashed India's GDP growth forecast in the current fiscal to 5.5 per cent saying a large credit squeeze emanating from shadow banks has pushed economic growth to a six year low. Although, losses remained limited as traders found some solace with the commerce and industry ministry’s statement that India has recorded continuous improvement in its ease of doing business ranking issued by the World Bank on account of steps taken by the government in this regard.

On the global front, Asian markets ended mostly in green on Thursday, tracking Wall Street even as South Korea’s economy continued to slow as per the latest figures. European markets were trading in green, as traders remain in limbo over an expected delay to the U.K.’s departure from the European Union, while corporate earnings season gathers pace. Back home, IT stocks were in focus with former NASSCOM President R Chandrashekhar’s statement that a hard Brexit would benefit India's information technology (IT) services companies to strengthen partnerships in the UK with anticipated easing of flow of high-skilled manpower.

The BSE Sensex ended at 39009.64, down by 49.19 points or 0.13% after trading in a range of 38840.76 and 39327.15. There were 13 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.36%, while Small cap index was down by 0.16%. (Provisional)

The top gaining sectoral indices on the BSE were Energy up by 1.35%, Realty up by 1.13%, Consumer Durables up by 0.52%, Healthcare up by 0.23% and Consumer Discretionary Goods & Services up by 0.12%, while PSU down by 2.24%, Power down by 1.18%, Bankex down by 1.17%, Telecom down by 0.94% and Utilities down by 0.87% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 3.74%, Reliance Industries up by 2.88%, HCL Tech. up by 2.01%, Asian Paints up by 1.43% and Tata Steel up by 1.10%. (Provisional)

On the flip side, Yes Bank down by 5.66%, SBI down by 4.46%, Indusind Bank down by 3.70%, Infosys down by 2.38% and Mahindra & Mahindra down by 1.71% were the top losers. (Provisional)

Meanwhile, improving its ranking for the third straight year, India has jumped 14 places to the 63rd position in the World Bank's (WB) ‘ease of doing business’ report on the government’s flagship ‘Make in India’ scheme and other reforms attracting foreign investment. It added that one of the main reasons for improvement in India’s ranking this year goes to the successful implementation of the Insolvency and Bankruptcy Code. Besides, New Zealand, Singapore and Hong Kong topped the list this year. The country also figured among the top 10 performers on the list for the third time in a row. India was ranked 142nd among 190 nations in 2014. Four years of reform pushed up India’s rank to 100th in World Bank’s ‘Doing Business’ 2018 report. It was 130th in 2017, while last year, the country jumped 23 places to the 77th position on the back of reforms related to insolvency, taxation and other areas.

The World Bank in its report also commended the reform efforts undertaken by the country ‘given the size of India’s economy’. Apart from India, the other countries on this year’s ‘top 10 performers’ list are Saudi Arabia (62), Jordan (75), Togo (97), Bahrain (43), Tajikistan (106), Pakistan (108), Kuwait (83), China (31) and Nigeria (131). The World Bank said Prime Minister Modi’s ‘Make in India’ campaign focused on attracting foreign investment, boosting the private sector - manufacturing in particular - and enhancing the country’s overall competitiveness. The government turned to the Doing Business indicators to show investors India’s commitment to reform and to demonstrate tangible progress. In 2015, the government’s goal was to join the 50 top economies on the ease of doing business ranking by 2020.

As per the report, while the competition to move up the ladder would increase and become much tougher, India is on track to be within top 50 of the Ease of Doing business in the next year or two. And to come under 25 or below 50, the Modi government needs to announce and start implementing next set of ambitious reforms now, as these reforms takes a few years to be realized on the ground. The report said the administration’s reform efforts targeted all of the areas measured by Doing Business, with a focus on paying taxes, trading across borders, and resolving insolvency. The country has made a substantial leap upward, raising its ease of doing business ranking from 130 in Doing Business 2016 to 63 in Doing Business 2020. It said in addition to resolving insolvency, significant improvements were registered in starting business, dealing with construction permits and trading across borders.

The CNX Nifty ended at 11579.15, down by 24.95 points or 0.22% after trading in a range of 11534.65 and 11679.60. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 3.23%, Reliance Industries up by 2.84%, Eicher Motors up by 2.82%, HCL Tech. up by 2.13% and Titan Co up by 2.09%. (Provisional)

On the flip side, Bharti Infratel down by 8.62%, Grasim Industries down by 5.73%, Yes Bank down by 5.47%, SBI down by 4.36% and GAIL India down by 3.73% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 60.97 points or 0.84% to 7,321.71, France’s CAC rose 28.26 points or 0.5% to 5,681.70 and Germany’s DAX was up by 65.31 points or 0.51% to 12,863.50.

Asian markets ended mostly higher on Thursday as a raft of upbeat corporate results helped market sentiment. Investors shrugged off concerns surrounding Brexit and the Sino-US trade war. Japanese shares ended higher as weaker yen boosts exporters, while investors lapped up technology stocks on hopes for improved earnings following Microsoft Corp's higher than expected sales forecasts for its cloud computing services. Further, Seoul shares ended higher as the world’s second-largest memory chipmaker, SK Hynix’s third-quarter profit beat expectations fueled hopes of a recovery in the chip making industry, and investors shrugged off preliminary data from the Bank of Korea showing that South Korea's economy expanded at a slower pace in the third quarter amid heightened global uncertainties. Meanwhile, Chinese stocks closed on a flat note as caution crept in ahead of a crucial meeting of the ruling Communist Party next week.