Post Session: Quick Review

Indian equity benchmarks fell from intra-day high but managed to close the session in green terrain on Thursday, on the back of firm trend seen in other Asian markets.  The markets made a gap-up opening and traded jubilantly, as traders took encouragement with the Economist Intelligence Unit’s report stating that India and China are projected to see accelerated economic growth in the fourth quarter of this year, bucking trends in the US and the European Union. It added that the real GDP growth of India in the December-ending quarter is expected to be the highest among G7 and BRICS nations. In the third quarter, India's real GDP growth is estimated to be 1% on a quarter-on-quarter basis and is projected to rise to 2.20% in the fourth quarter. Traders also found some support with Commerce and Industry Minister Piyush Goyal’s statement that India would enter into any free-trade agreement (FTA) or comprehensive partnership agreement on its terms and would do what would be best for the people and national interest.

However, key indices gave up most of their initial gains in last leg of trade to come off their intraday high points, as market-men got anxious after India Ratings and Research’s (Ind-Ra) analysis of data of Annual Survey of Industries (ASI) indicated slowdown in labour productivity growth in the Indian organized manufacturing sector, which grew at an average annual rate of 3.7% during FY16-FY18 (FY11-FY15: 7.4%, FY06-FY10: 10.3%, FY01-FY05: 9.6%), however, it fell to 2.6% and 2.9% in FY17 and FY18, respectively. Traders also took a note of Commerce and Industry Minister Piyush Goyal's statement that the issues of high capital cost and high taxation levels need to be addressed to boost India’s trade. He added that the country needs to accelerate the export growth to reach the goal of $1 trillion in exports. But, indices managed to close the session in green, taking support from reports that India and China are projected to see accelerated economic growth in the fourth quarter of this year, bucking trends in the US and the European Union.

On the global front, Asian markets ended mostly higher on Thursday, after the US Federal Reserve cut interest rates as expected to keep economic expansion on track. European markets were trading in red, after report says Chinese officials have cast doubt of trade deal. Back home, sugar stocks were in focus with report that the government's Rs 15,000-crore soft loan programme for sugar mills to set up ethanol units is moving at a very slow pace as banks have so far disbursed only about Rs 800 crore.

The BSE Sensex ended at 40100.90, up by 49.03 points or 0.12% after trading in a range of 40054.89 and 40392.22. There were 17 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 1.08%, while Small cap index was up by 0.93%. (Provisional)

The top gaining sectoral indices on the BSE were PSU up by 2.02%, TECK up by 2.00%, Telecom up by 1.95%, IT up by 1.77% and Realty up by 1.24%, while Metal down by 0.61%, Energy down by 0.44% and Capital Goods down by 0.31% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Yes Bank up by 23.77%, SBI up by 8.10%, Infosys up by 3.65%, Tata Motors up by 3.52% and Tata Motors - DVR up by 2.19%. (Provisional)

On the flip side, Tata Steel down by 2.14%, Tech Mahindra down by 2.12%, ICICI Bank down by 1.92%, Axis Bank down by 1.83% and Mahindra & Mahindra down by 1.74% were the top losers. (Provisional)

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that India would enter into any free-trade agreement (FTA) or comprehensive partnership agreement on its terms and would do what would be best for the people and national interest. He added that the country would not sign any FTA in a rush but will engage with the world without compromising the interest of domestic industry. He said ‘In terms of RCEP (Regional Comprehensive Partnership Agreement), lot of wrong information have been spread all over. Let me assure each one of you that India will no more sign any FTA in a rush. India is not in a weak leadership which had worked only on deadlines to execute FTAs. India will enter into an FTA or comprehensive partnerships on India's terms.’

The minister said the government is careful when it is negotiating trade agreements. Trade is a complex process, therefore he said ‘any engagement which we will do will result in the best for the people and our industry.’ He also said ‘We cannot remain in an isolated world also. We have to engage with the rest of the world. The world is moving towards more and more global integration. So, India will have to finally balance our imperatives to protect domestic interest, yet also engage with the rest of the world.’ He said ‘And that is the fine balance that the government is working on to ensure that we are part of international trading blocs and engagements but not in any way that compromises national interest.’

The RCEP is a mega free-trade agreement being negotiated by 16 countries. The members include ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam), Australia, China, India, Japan, South Korea and New Zealand. The negotiations for the RCEP deal have reached at a fundamental phase as the member countries are targeting to conclude the talks by November. As per the target of the member countries, conclusion of the negotiations could be announced in the summit. Several domestic players from industries such as metals, dairy, electronics, and chemicals have raised serious concerns over this agreement due to the presence of China in the grouping, with which India has a huge trade deficit of over $50 billion.

The CNX Nifty ended at 11881.20, up by 37.10 points or 0.31% after trading in a range of 11855.10 and 11945.00. There were 31 stocks advancing against 19 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 23.68%, Zee Entertainment up by 10.84%, SBI up by 8.00%, Grasim Industries up by 4.77% and Infosys up by 4.00%. (Provisional)

On the flip side, JSW Steel down by 2.86%, Tata Steel down by 2.09%, Axis Bank down by 2.05%, Tech Mahindra down by 2.04% and Indian Oil Corporation down by 1.97% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 70.40 points or 0.96% to 7,260.38, France’s CAC fell 34.57 points or 0.6% to 5,731.30 and Germany’s DAX was down by 83.41 points or 0.65% to 12,826.82.

Asian markets ended mostly higher on Thursday after the US Federal Reserve cut interest rates by 25 basis points as widely expected to keep economic expansion on track, but indicated it is ready to hold off on further rate cuts for now. Meanwhile, the market showed scant reaction to the Bank of Japan's decision to modify its forward policy guidance by offering a stronger signal it may cut interest rates in future. Investors also digested news that Chile has cancelled the Asia-Pacific Economic Cooperation summit where US President Donald Trump and Chinese president Xi Jinping were set to sign an interim agreement to end the 15-month trade war.

Japanese shares ended up after data showed Industrial production in Japan was up a seasonally adjusted 1.4 percent month-on-month in September. That beat forecasts for an increase of 0.4 percent following the 1.2 percent decline in August. On a yearly basis, industrial output was up 1.1 percent - again beating expectations for a decline of 0.1 percent following the 4.7 percent drop in the previous month. Though, Chinese shares ended lower after data showed China's factory activity slipped to an eight month-low in October. The manufacturing PMI fell to 49.3 from 49.8 a month ago. China's service sector also logged weaker growth in October, with the corresponding index coming in at 52.8, down from 53.7 in September.