Post Session: Quick Review

Indian equity indices showcased an enthusiastic performance on Tuesday by strongly rallying close to one and half percentage point in the session, on the back of widespread buying by participants tracking positive leads from Asian markets. Hectic buying activity helped markets to end the session at intraday high levels, with Nifty settling above crucial 11,750 mark. The markets made a positive opening, as some optimism came with the Reserve Bank’s statement that continuing its northward surge, India’s forex kitty has swelled by $1.039 billion to a new life-time high of $440.751 billion for the week ended October 18. Sentiment on the street further improved on World Bank group President David Malpass’ statement that India must undertake financial reforms in three key areas like sound regulations for non-banking financial companies (NBFCs), allow private sector banks in a big way in the banking sector and deepen capital market to aide growth. Besides, Union Steel Minister Dharmendra Pradhan said that India will spend about $1.4 trillion on its infrastructure development in the next five years.

Domestic indices extended their gains in the afternoon deals and were trading at intraday high points, as local sentiments also got buttressed with a report that Prime Minister Narendra Modi embarked on a two-day visit to Saudi Arabia to help draw investments and bolster bilateral ties, with a dozen agreements expected to be signed in sectors, including energy, Defence procurement and civil aviation. Investors took note of report that the commerce ministry is working on a proposal to allow domestic companies to make payments in the rupee currency for services obtained from special economic zone units. The proposal is aimed at promoting the growth of IT units in special economic zones (SEZs). However, traders ignored a private report that declining for the fourth consecutive month, consumer confidence in the month of October nosedived by 3.5% tracking pessimism around jobs, economy, finances, and investment.

On the global front, Asian markets ended mostly higher, while European markets were trading lower; after the British parliament rejected a plan by Prime Minister Boris Johnson to organize a snap election, adding an additional layer of uncertainty surrounding the economic outlook. Back home, automobile industry stocks ended higher as India Ratings and Research (Ind-Ra) reported that that retail sales of automobile are likely to pick up with an improvement in consumer sentiment during the ongoing festive season due to recent liquidity easing measures announced by the government and on back of favourable monsoons.

The BSE Sensex ended at 39819.10, up by 568.90 points or 1.45% after trading in a range of 39254.12 and 39917.01. There were 27 stocks advancing against 4 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 1.13%, while Small cap index was up by 0.57%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 4.28%, Metal up by 4.12%, Energy up by 2.00%, Industrials up by 1.98% and Consumer Disc was up by 1.76%, while Telecom down by 4.42% was the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors - DVR up by 18.60%, Tata Motors up by 16.46%, Tata Steel up by 7.31%, Yes Bank up by 6.30% and Axis Bank was up by 4.27%. (Provisional)

On the flip side, Bharti Airtel down by 3.39%, Kotak Mahindra Bank down by 1.15%, Power Grid down by 0.82% and SBI was down by 0.41% were the top losers. (Provisional)

Meanwhile, underlining substantial rise in the demand for steel in the country, Minister of Petroleum and Natural Gas & Steel Dharmendra Pradhan has said that it is expected to increase further in the future as India embarks on becoming a $5 trillion economy by 2024. He emphasized that the demand of steel has seen substantial increase, on the back of rapid economic & infrastructural development in India.

Pradhan further noted that India is committed to spend about $1.4 trillion on its infrastructure development in the next five years, adding that all this augurs well for the steel demand in the country. He also mentioned about the government’s determination to raise the per capita consumption of steel from its current low of 72 kg per capita to 160 kg per capita by 2030.

On the issue of the steel excess capacity, the minister said that steel sector in India is deregulated and is driven by market forces. Besides, he said that as it is well known, India does not contribute or suffer from excess capacity and added that ‘We are mindful and conscious of the problems, which originate from excess capacity, and thus respect the principles laid down by Global Forum on Steel Excess Capacity.’

The CNX Nifty ended at 11785.90, up by 158.75 points or 1.37% after trading in a range of 11627.35 and 11809.40. There were 39 stocks advancing against 11 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 16.69%, Tata Steel up by 6.95%, JSW Steel up by 6.86%, Yes Bank up by 6.39% and Axis Bank was up by 4.41%. (Provisional)

On the flip side, Bharti Infratel down by 8.93%, Bharti Airtel down by 3.44%, Ultratech Cement down by 1.46%, Kotak Mahindra Bank down by 1.01% and Nestle was down by 0.88% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 38.54 points or 0.53% to 7,292.74, France’s CAC decreased 13.91 points or 0.24% to 5,716.66 and Germany’s DAX decreased 33.23 points or 0.26% to 12,908.48.

Asian markets ended mostly higher on Tuesday as investors waiting for developments in US-China trade deal. Moreover, hopes of another interest rate cut by the US Federal Reserve in the monetary policy meeting to be held on Wednesday also boosted investor sentiment. Chinese shares ended lower despite Donald Trump's statement regarding prospects for a trade deal with China being agreed ahead of expectations. Meanwhile, Japanese shares ended higher following Trump’s statement that he hopes to sign a trade deal with China's President at a summit in Chile in the upcoming month.