Post Session: Quick Review

Indian equity benchmarks traded between green and red terrain throughout the session and ended Thursday’s trade on optimistic note, with Sensex and Nifty closing above their crucial 40,250 and 11,850 levels, respectively. After making slightly positive start, markets soon turned cautious as weak domestic macroeconomic data and negative cues from global markets kept investors on edge. Retail price based consumer inflation spiked to 16-month high of 4.62 per cent in October on costlier food items, reducing the headroom for a rate cut by the RBI in its monetary policy due next month. However, some buying crept in as traders found some solace with SBI report showing that credit growth picked up rapid pace beginning September - jumping by Rs 1.08 lakh crore - mainly helped by housing, NBFC and lately MSME. The report further said the week up to Diwali has shown an increase in currency in circulation of Rs 30,871 crore from the previous week, thereby showing that people have been demanding cash in the festive season. 

But, markets once again slipped into negative territory in afternoon trade, as traders got wary with a private report which highlighted that even as the retail inflation crossed the RBI’s comfort level for the first time in over a year, it may continue to remain higher in the remaining fiscal year. This may further complicate the policy decisions in the wake of the ongoing slowdown. Though, markets bounced back from their losses in dying hour of trade, on the back of easing wholesale price index (WPI) inflation data. Wholesale prices based inflation eased further to 0.16 percent in October, as against 0.33 percent in September due to subdued prices of non-food articles and fall in prices of manufactured items. Traders overlooked Moody's Investors Service report stating that it cut India's economic growth forecast for current year to 5.6 per cent from 5.8 per cent estimated earlier, saying GDP slowdown is lasting longer than previously expected. It expected economic activity to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent, respectively, but the pace to remain lower than in the recent past.

On the global front, Asian markets ended mostly lower, while European markets were trading in red, after soft economic data in China and Japan showed the trade war between Beijing and Washington was hitting growth in some of the world’s biggest economies. Back home, sugar stocks were in focus with report that as the Rs 15,000 crore soft loan scheme for sugar mills is moving at a snail's pace, the government has extended the moratorium period for repayments by six more months. Now, the moratorium period is one-and-a-half years. Telecom stocks too were in focus after the Department of Telecom (DoT) said companies will have to pay their Adjusted Gross Revenue (AGR) dues of roughly Rs 92,000 crore in three months as ordered by the Supreme Court.

The BSE Sensex ended at 40276.58, up by 160.52 points or 0.40% after trading in a range of 40026.99 and 40348.61. There were 15 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index rose 0.17%, while Small cap index was down by 0.02%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.06%, Consumer Durables up by 0.96%, Bankex up by 0.71%, TECK up by 0.59% and Auto up by 0.47%, while Telecom down by 2.39%, Metal down by 1.90%, Basic Materials down by 0.83%, Capital Goods down by 0.79% and Energy down by 0.69% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 2.56%, Infosys up by 2.03%, Bajaj Finance up by 1.72%, Maruti Suzuki up by 1.34% and HDFC Bank up by 1.32%. (Provisional)

On the flip side, Indusind Bank down by 2.92%, Vedanta down by 2.83%, Tata Motors - DVR down by 2.23%, Tata Motors down by 2.02% and Bharti Airtel down by 1.55% were the top losers. (Provisional)

Meanwhile, State Bank of India’s (SBI) Economic Research Department in its Ecowrap report has said that credit growth picked up rapid pace beginning September 2019 - jumping by Rs 1.08 lakh crore - mainly helped by housing, NBFC and lately MSME. The report further said the week up to Diwali has shown an increase in currency in circulation of Rs 30,871 crore from the previous week, thereby showing that people have been demanding cash in the festive season.

It mentioned that the sectoral data for the month of September 2019, indicates that for the first time in current fiscal credit to industry turned positive and jumped by Rs 9,700 crore, of which Rs 8,200 crore is attributable to MSME sector. The report highlighted, in September, the jump in retail credit at Rs 51,900 crore was nearly double that of August, of which housing loans jumped by 2.6 times.

Bank lending to NBFC sector has remained robust and the YTD growth of such is highest across all segments at 11.3 per cent. Besides, it said ‘we are less hopeful of a growth pick up in second quarter 2019-20. Out of 26 indicators, only 5 indicators were showing acceleration in September. This indicates the extend of demand slowdown in the economy is still significant and would take longer time to recover.’

The CNX Nifty ended at 11870.60, up by 30.15 points or 0.25% after trading in a range of 11802.65 and 11895.65. There were 21 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were ICICI Bank up by 2.52%, Infosys up by 1.97%, Bajaj Finance up by 1.68%, HDFC Bank up by 1.38% and Maruti Suzuki up by 1.32%. (Provisional)

On the flip side, Bharti Infratel down by 3.25%, Vedanta down by 3.00%, Indusind Bank down by 2.91%, Zee Entertainment down by 2.86% and Ultratech Cement down by 2.64% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 declined 37.92 points or 0.52% to 7,313.29, France’s CAC lost 4.48 points or 0.08% to 5,902.61 and Germany’s DAX decreased 36.14 points or 0.27% to 13,193.93.

Asian markets ended mostly lower on Thursday on doubts about progress in Sino-US trade negotiations and weak data from China and Japan stoked worries that a global slowdown is deepening. Hong Kong shares ended lower amid reports the Hong Kong government will announce a curfew for the weekend, while weaker than expected Chinese data fueled concerns over the health of Chinese economy. Chinese Industrial output rose 4.7 percent year-on-year in October, data from the National Bureau of Statistics released on Thursday showed, significantly slower than expected on weakness in global and domestic demand and as a drawn-out trade war with the United States weighed on activity. Indicators showed other sectors also slowed significantly and missed forecasts with retail sales growth back near a 16-year trough and fixed asset investment growth the weakest on record. Further, Japanese shares closed down as the yen strengthened and data showed Japan's economy grew at the slowest pace in a year in the third quarter. Gross domestic product grew an annualized 0.2 percent quarterly following a revised 1.8 percent expansion in the second quarter, figures from the Cabinet Office showed. Though, Chinese shares ended higher on expectations that policymakers will ramp up stimulus measures to boost a fragile economic recovery after weak Chinese industrial data.