Indian markets settle higher; Sensex at record closing high

Indian equity markets settled higher on Monday, with the Sensex and the Nifty gaining over 130 and 50 points, respectively. The start of the day was optimistic, aided with Prime Minister Narendra Modi’s statement that the country is among the top 10 destinations for foreign direct investment (FDI) in the world and had received $286 billion of FDI in the last five years. Adding some comfort, the Reserve Bank of India’s (RBI) data report showed that India's forex reserves increased by $1.832 billion to a new lifetime high of $442.583 billion in the week ended October 25, helped by a jump in core currency assets and value of gold.

Volatility hit over street during noon deals which brought the markets off day’s high points, amid Centre for Monitoring Indian Economy’s report highlighting that India’s unemployment rate rose to 8.5% in October 2019, the highest level since August 2016. Separately, Goods and Services Tax collection declined by 5.29 per cent to Rs 95,380 crore in the month of October 2019, as against Rs 1,00,710 crore in the same month a year ago. But, indices remained in green for whole day to end higher, amid reports that India is likely to make a strong pitch for exports of its Pharma, IT and agricultural products among others at China's second International Import Expo to be opened at Shanghai on November 5.

On the global front, European markets were trading in green, even though Italy's manufacturing sector contracted at the fastest pace in seven months in October. The data from IHS Markit showed that the manufacturing Purchasing Managers' Index came in at 47.7 in October versus 47.8 in September. The index has remained below 50 threshold for the thirteenth consecutive month. Asian markets ended in green, despite Malaysia's exports fell unexpectedly in September, while imports growth exceeded expectations. The data from the Department of Statistics revealed that exports declined 6.8 percent year-on-year to MYR 77.7 billion in September.

Back home, the sugar industry stocks remained in focus, as industry body Indian Sugar Mills Association (ISMA) said that sugar production in Maharashtra and Karnataka in the new marketing year 2019-20 is likely to be delayed by more than a month as mills have not commenced their operation because of rains and shortage of sugarcane. Further, stocks related to the coal sector remained in watch, after industry data showed that India's coal imports increased by 9.3 percent to 126.91 million tonnes (MT) in the first six months of the ongoing fiscal. The country had imported 116.04 MT of coal in the April-September period of FY 2018-19.

Finally, the BSE Sensex gained 136.93 points or 0.34% to 40,301.96, while the CNX Nifty was up by 50.70 points or 0.43% to 11,941.30.

The BSE Sensex touched a high and a low 40,483.21 and 40,186.29, respectively and there were 15 stocks advancing against 16 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index surged 0.01%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Metal up by 3.20%, Telecom up by 2.11%, Basic Materials up by 1.42%, IT up by 1.02% and TECK up by 0.97%, while Auto down by 1.29%, Consumer Disc down by 0.79%, Realty down by 0.60%, FMCG down by 0.56% and Consumer Durables down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.05%, Vedanta up by 2.88%, HDFC up by 2.48%, Tata Steel up by 2.33% and ONGC up by 2.22%. On the flip side, Maruti Suzuki down by 2.54%, Hero MotoCorp down by 2.34%, Indusind Bank down by 2.01%, Tata Motors down by 1.57% and Power Grid down by 1.32% were the top losers.

Meanwhile, the outstanding dues owed by distribution utilities to power producers rose around 37 percent to Rs 69,558 crore in September 2019 as compared to the same month last year, reflecting stress in the sector. According to web portal and app namely PRAAPTI (Payment Ratification and Analysis in Power procurement for Bringing Transparency in Invoicing of generators), distribution companies (discoms) owed a total of Rs 50,583 crore to power generation companies in September 2018.

In September this year, total overdue amount, which was not cleared even after 60 days of grace period offered by generators, stood at Rs 52,408 crore as against Rs 34,658 crore in the same month in 2018. Power producers give 60 days' time to discoms for paying bills for the supply of electricity. After that, outstanding dues become overdue and generators charge penal interest on that in most cases. In order to give a relief to power generation companies, the government has enforced a payment security mechanism from August 1. Under this mechanism, discoms are required to open letters of credit for getting power supply.

Data on the portal indicates that outstanding as well as overdue amount have decreased over the preceding month. In August 2019, total outstanding on discoms was Rs 80,087 crore, while the total overdue amount was Rs 60,935 crore. The August 2019 figures of dues and overdues have been revised upwards from Rs 78,020 crore and Rs 59,532 crore provisional numbers released last month on the portal.

The CNX Nifty traded in a range of 11,989.15 and 11,905.35. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 6.20%, JSW Steel up by 5.01%, Bajaj Finserv up by 4.30%, Coal India up by 3.79% and Infosys up by 3.23%. On the flip side, Zee Entertainment down by 4.75%, Indian Oil Corporation down by 2.87%, Maruti Suzuki down by 2.48%, Hero MotoCorp down by 2.44% and Indusind Bank down by 2.03% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 54.39 points or 0.74% to 7,356.81, France’s CAC rose 47.00 points or 0.82% to 5,808.89 and Germany’s DAX added 124.60 points or 0.96% to 13,085.65.

Asian markets ended mostly higher on Monday as growing optimism over US-China trade talks and strong US job data boosted global investor sentiment. The United States and China both said on Friday that they had made progress in talks aimed at defusing their protracted trade war, and US officials said a deal could be signed this month. While, the Chinese Commerce Ministry said the world's two largest economies had reached ‘consensus on principles’ during a ‘serious and constructive’ telephone call between their main trade negotiators. Chinese shares ended higher, encouraged by Beijing's increasing efforts to open up its financial markets, investors awaited China President Xi Jinping's planned keynote speech at the Shanghai international import exhibition for further direction. Meanwhile, the Japanese markets were closed for the Culture Day holiday.