Post Session: Quick Review

Indian equity benchmarks ended the choppy day of trade on a flat note on Friday, as traders remained on sidelines ahead of Muhurat Trading. Markets started off with marginal gains, as traders took some comfort with Finance Minister Nirmala Sitharaman’s statement that efforts will be made to further simplify Goods and Services Tax, and expressed hope that it will help in further improving India’s ranking in the World Bank’s ease of doing business index. Some support also came with report that notwithstanding global and domestic economic uncertainties, private equity funds recorded an all-time-high investment of $9.4 billion in the third quarter this year, driven by big-ticket transactions.  However, traders soon turned cautious with report that the government might be impelled to steeply cut its direct tax collection target, with growth in this regard slumping to 3.5 per cent up to mid-October from the same period in the earlier financial year, as against the Budget target of 17.3 per cent.

 Markets witnessed some buying in late afternoon deals, as traders found some solace with NITI Aayog CEO Amitabh Kant’s statement that India's improved ease of doing biz ranking is a huge achievement but there is a scope of improvement on some parameters. But, barometers were unable to hold on to gains as some anxiety remained among the investors with Fitch Ratings stating that the ongoing NBFC crisis and the consequential credit squeeze may severely affect the economic growth, which is likely to be print at a six-year low of 5.5 percent in FY20. 

On the global front, Asian markets ended mixed on Friday, while European markets were trading in red, amid cautious trading due to continued uncertainty over Brexit as well as lingering Sino-US trade tensions. Back home, construction sector were in focus as India Ratings and Research (Ind-Ra) maintained a stable outlook for the sector for the rest of FY20 mainly on account of the current order book position. Sugar stocks too were in focus with reports that the country's sugar production is expected to decline by 12.38 per cent to 28-29 million tonnes in the 2019-20 marketing season starting this month, due to sharp fall in the output in Maharashtra.

The BSE Sensex ended at 39051.45, up by 31.06 points or 0.08% after trading in a range of 38718.27 and 39241.61. 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 0.09%, while Small cap index was down by 0.40%. (Provisional)

The top gaining sectoral indices on the BSE were PSU up by 1.57%, Bankex up by 1.17%, IT up by 1.01%, TECK up by 0.60% and Realty up by 0.37%, while Telecom down by 2.17%, Consumer Durables down by 1.88%, Industrials down by 1.03%, Power down by 0.91% and Basic Materials down by 0.86% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 10.25%, SBI up by 7.42%, ICICI Bank up by 3.02%, Sun Pharma up by 2.48% and TCS up by 2.21%. (Provisional)

On the flip side, Tata Motors down by 5.17%, Tata Motors - DVR down by 3.51%, Vedanta down by 2.09%, HDFC down by 2.08% and Kotak Mahindra Bank down by 1.75% were the top losers. (Provisional)

Meanwhile, expressing optimism over improvement in India’s business ranking, Finance Minister Nirmala Sitharaman has said efforts will be made to further simplify Goods and Services Tax (GST). She added that it will help in further improving India’s ranking in the World Bank’s (WB) ease of doing business index. India has jumped 14 places to rank 63rd out of 190 countries in the WB’s Doing Business 2020 report on account of significant improvement in resolving insolvency and obtaining construction permits. The other parameters where the country has done well include trading across borders, registering property, paying taxes, getting electricity connections and starting a business. However, the improvement in the remaining three parameters - getting credit, protecting minority investors, enforcing contracts - are not impressive.

The Minister said that the effort will be now to achieve the target to reaching within top 50 rank. She added that as there is just one rank improvement in the parameter of starting a business, enough effort will be made to improve on this scale, as it is a ‘very critical’ in a cycle of an industry. She said ‘in GST, it is an ongoing process to understand where the difficulties are…We are also looking at what were the glitches in using online filing of returns. So, GST is an ongoing process in improving. Even now for the next meeting, as and when it happens, we want to make sure that several steps are taken to simplify compliance.’ On income tax front, she said ‘At this stage, there may not be much to say’.

Sitharaman further said from next year two more cities - Kolkata and Bengaluru - will be included in the preparation of the ranking index. Currently, the report covers Delhi and Mumbai. She said ‘till now two cities in India were covered all these years. For a large country and regional diversity being so distinct, we were impressing upon the World Bank that having just two cities may not be adequately representative. So, from the coming year Kolkata and Bengaluru will be added to the list of cities.’  With this, the World Bank will take views of industry from these two cities while formulating the ranking index. She said that ‘there is a significant jump in the parameter of resolving insolvency, but that does not make me complacent’.

The CNX Nifty ended at 11580.40, down by 2.20 points or 0.02% after trading in a range of 11490.75 and 11646.90. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 10.97%, SBI up by 7.43%, ICICI Bank up by 3.13%, Cipla up by 2.56% and Sun Pharma up by 2.46%. (Provisional)

On the flip side, Bharti Infratel down by 8.55%, Tata Motors down by 4.94%, Titan Co down by 2.95%, JSW Steel down by 2.74% and Ultratech Cement down by 2.72% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 33.66 points or 0.46% to 7,294.59, France’s CAC fell 4.96 points or 0.09% to 5,679.37 and Germany’s DAX was down by 29.08 points or 0.23% to 12,843.02.

Asian markets ended mixed on Friday amid cautious trading due to continued uncertainty over Brexit as well as lingering Sino-US trade tensions. Chinese shares ended higher ahead of high-level trade talks later in the day. Reports showed top US and Chinese trade officials will discuss plans for China to buy more American farm products, but in return, Beijing will request cancellation of some planned and existing US tariffs on Chinese imports. Meanwhile, Japanese shares ended higher as semiconductor-related stocks surged after the release of some positive earnings from overseas tech companies, but underlying sentiment remained somewhat cautious after Japan's Trade Minister Isshu Sugawara resigned following allegations of election law violations.