Post Session: Quick Review

Indian equity benchmarks traded on a weak note throughout the day on Friday and ended the session on a pessimistic note, led by decline in IT stocks. Key bourses made cautious start and traded lackluster, as traders remained concerned with rating agency ICRA’s report that it expects further deterioration in the growth of India's GDP to 4.7% in Q2 of FY20, due to weakening momentum in industry. ICRA also forecast the country's gross value added (GVA) at basic prices in year-on-year (YoY) basis to 4.5% in the quarter ending September of FY20. Some pessimism also came in with a report that the Centre delaying transfer of states’ share of GST collection that has been consistently falling this fiscal and poor non-tax mop-up, a majority of the states are going slow on their budgeted spending, which in the first half rose only 8.7%. Meanwhile, Merger and Acquisition (M&A) deals in the month of October dropped by 45 percent in value terms and 40 percent in volume terms compared to the corresponding period last year.

Markets continued their free fall during the final hour of trade, as traders were on the back-foot with report that claiming that India will need another 22 years of sustained growth to become a developed country, former Reserve Bank of India (RBI) governor C Rangarajan said that at the current growth rate, India becoming a $5 trillion economy by 2025 is simply out of question. Traders also took note of government’s report that that public sector banks (PSBs) disbursed loans worth Rs 2.53 lakh crore in October, the month in which they carried out two phases of customer outreach programme under the government prodding in 374 districts of the country.

On the global front, Asian markets ended mostly higher, as a sense of optimism returned to trading floors after a report said China's point man on the US tariffs talks had offered to host a meeting to help push through their crucial mini pact. European markets were trading in green, after official data showed the German economy avoided a technical recession in the third quarter, as initially estimated.

The BSE Sensex ended at 40369.13, down by 206.04 points or 0.51% after trading in a range of 40276.83 and 40653.17. There were 12 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index slipped 0.11%, while Small cap index was up by 0.02%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.18%, Basic Materials up by 0.64%, Power up by 0.62%, Realty up by 0.62% and Utilities was up by 0.53%, while IT down by 2.14%, Telecom down by 2.06%, TECK down by 2.02%, Capital Goods down by 1.04% and BANKEX was down by 0.73% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 4.22%, ONGC up by 2.21%, NTPC up by 2.17%, Vedanta up by 2.12% and HDFC was up by 1.30%. (Provisional)

On the flip side, Infosys down by 2.70%, Asian Paints down by 2.24%, TCS down by 2.22%, Kotak Mahindra Bank down by 1.86% and HCL Tech was down by 1.85% were the top losers. (Provisional)

Meanwhile, former Reserve Bank of India (RBI) governor C Rangarajan has said reaching the $5-trillion Gross Domestic Product (GDP) target by 2025 is simply out of question at the current growth rate. He mentioned ‘today our economy is about $2.7 trillion and we are talking about doubling this over the next five years at $5 trillion. The required rate of growth to achieve that level is in excess of 9% per annum.’

He added ‘you have lost two years. This year it is going to be six percent growth and next year also it will be probably about seven percent. Thereafter the economy may pick up.’ The interesting thing is, even if you reach $5 trillion, the per capita income in India will grow from the current level of $1800 to $3600. Even then, India will be called low-middle income country.

The definition of a developed country is one whose per capita income is $12000. It will take 22 years for India to grow at 9 percent per annum to reach there. Besides, the economy has been on a steady decline, with growth rate slowing from 8.2% in FY16 to 6.8% in FY19. While the first quarter of current financial year growth slipped to a six-year low of 5%, the best forecast for the second quarter is 4.3%.

The CNX Nifty ended at 11915.60, down by 52.80 points or 0.44% after trading in a range of 11883.50 and 11968.10. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Eicher Motors up by 4.38%, Tata Steel up by 4.23%, Zee Entertainment up by 3.67%, JSW Steel up by 2.73% and Vedanta was up by 2.16%. (Provisional)

On the flip side, Bharti Infratel down by 4.09%, Infosys down by 2.64%, Asian Paints down by 2.28%, TCS down by 2.24% and UPL was down by 1.99% were the top losers. (Provisional)

European markets were trading in green, UK’s FTSE 100 increased 82.02 points or 1.13% to 7,320.57, France’s CAC increased 13.45 points or 0.23% to 5,894.66 and Germany’s DAX increased 23.51 points or 0.18% to 13,161.21.

Asian markets ended mostly higher on Friday on fresh hopes that the world's top two economies may delay their plans to roll out new tariffs, originally slated for December 15, in the latest efforts to resolve the prolonged dispute. Japanese shares ended higher on bargain hunting following three straight days of losses and the yen weakened against the dollar. Though, Chinese shares ended lower as China revised its nominal gross domestic product estimate for 2018 by 2.1 percent, reflecting more complete measures of the services sector and assets. Worries that a ‘phase one’ trade deal between the United States and China might not occur until next year, also weighed on investor sentiment.