Indian equities end Samvat 2075 on muted note

Indian equity markets ended Samvat 2075 on muted note on Friday, with Sensex & Nifty closing with marginal gains. After a cautious start, key indices remained positive for a brief period, aided by 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. Soon markets turned volatile, amid a 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.

Indices altered between green & red terrain, after Director of Development Economics at the World Bank, Simeon Djankov said India needs a fresh set of bold reforms in the next three to four years if it wants to be among the top 50 countries with ease of doing business. But, indices somehow ended slightly in green terrain, taking support from Aayog CEO Amitabh Kant’s statement India's improved ease of doing biz ranking is a huge achievement but there is a scope of improvement on some parameters. Some support also came with report that notwithstanding global & 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.

On the global front, European markets were trading in red, as German consumer confidence is set to weaken to a three-year low in November. The survey data from the market research group GfK showed that the forward-looking consumer sentiment index fell to 9.6 in November from revised 9.8 in October. The expected score was 9.8. Asian markets ended mixed, even though Singapore's industrial production increased unexpectedly in September driven by higher biomedical output. Industrial production grew 0.1 percent on a yearly basis in September, confounding expectations for a decline of 5.1 percent.

Back home, the sugar industry stocks remained in watch, amid 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. Further, realty sector stocks also remained in focus, as India Ratings and Research (Ind-Ra) maintained a stable outlook for the construction sector in India for the rest of FY20 mainly on account of the current order book position. The agency has maintained stable outlook despite a slowdown in awarding projects in the transport and irrigation sectors.

Finally, the BSE Sensex gained 37.67 points or 0.10% to 39,058.06, while the CNX Nifty was up by 1.30 points or 0.01% to 11,583.90.

The BSE Sensex touched a high and a low of 39,241.61 and 38,718.27, respectively and there were 13 stocks advancing against 18 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index rose 0.02%, while Small cap index was down by 0.39%.

The top gaining sectoral indices on the BSE were PSU up by 1.61%, Bankex up by 1.07%, IT up by 0.99%, TECK up by 0.66% and Realty up by 0.43%, while Consumer Durables down by 1.78%, Telecom down by 1.67%, Industrials down by 1.00%, Power down by 0.86%, Basic Materials down by 0.77% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 7.97%, SBI up by 7.19%, ICICI Bank up by 3.18%, Sun Pharma up by 2.72% and TCS up by 2.06%. On the flip side, Tata Motors down by 4.87%, Tata Motors - DVR down by 3.77%, Vedanta down by 2.47%, HDFC down by 2.01% and Kotak Mahindra Bank down by 1.57% were the top losers.

Meanwhile, Fitch Ratings has slashed India's Gross Domestic Product (GDP) growth forecast for the current financial year (FY20) to 5.5% as compared to 6.6% forecasted in June for FY20. It said that the Indian economy is being held back by a large squeeze in credit availability emanating from non-bank financial companies (NBFCs).

He also added weakness has been fairly broad-based, with both domestic spending and external demand losing momentum. It mentioned that the recent government measures to boost economy including a cut in corporate tax rates will gradually nudge growth. The projection is lower than 6.1% that the Reserve Bank of India (RBI) had forecast in early October.

Further, it is expecting that GDP expansion will pick up to 6.2% in the next financial year (FY21) and to 6.7% in the year after. The Indian economy decelerated for the fifth consecutive quarter in April-June, with GDP expanding by a meagre 5%, down from 8% recorded a year earlier. This is the lowest growth outturn since 2013.

The CNX Nifty traded in a range of 11,646.90 and 11,490.75. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 11.18%, SBI up by 7.56%, ICICI Bank up by 3.18%, Cipla up by 2.85% and Sun Pharma up by 2.56%. On the flip side, Bharti Infratel down by 8.57%, Tata Motors down by 5.43%, Titan down by 2.92%, JSW Steel down by 2.71% and Ultratech Cement down by 2.61% were the top losers.

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.