Post Session: Quick Review

Extending slide for the second consecutive day, Indian equity benchmarks ended Friday’s trade with losses of around a percent, on the back of a broad-based selloff, despite strong trend seen in other Asian markets. Markets made positive start and traded marginally higher, as traders took encouragement with Reserve Bank of India (RBI) Governor Shaktikanta Das indicating that the government may come up with some countercyclical policy measures on the fiscal side to revive growth. Some support also came with Commerce and Industry Minister Piyush Goyal’s statement the target of Rs 5 lakh crore business through government’s e-marketplace GeM is achievable in less than five years given the huge amount of procurement done via the platform.

However, markets erased early gains and entered into negative territory, as traders turned cautious with Reserve Bank of India’s consumer confidence survey (CCS) which highlighted that a further drop in consumer confidence in November as households remained pessimistic about jobs and the general economic situation. Markets continued a downward trajectory in the last leg of trade, as Federation of Indian Chambers of Commerce and Industry (FICCI) expressed disappointment at the Reserve Bank of India’s (RBI) decision to keep interest rates unchanged and said there is a need for continued action on the policy rate front to boost growth.

On the global front, Asian markets ended in green on Friday, while European markets were trading in green, as investors took heart from U.S. President Donald Trump saying trade talks with China were 'moving right along', and U.S. oil prices sat near 2-1/2-month highs after OPEC and other producers agreed to cut output. Back home, stocks related to Auto component industry were in focus with industry body ACMA stating the auto component industry's turnover witnessed its worst ever decline in the first half of the current fiscal leading to a job loss of around 1 lakh temporary workers till July this year. Besides, banking stocks were also in action with Fitch Ratings stating that Indian banks are likely to take significantly more loan write-offs to reduce bad loans against a backdrop of rising provisions and weak recovery prospects.

The BSE Sensex ended at 40429.29, down by 350.30 points or 0.86% after trading in a range of 40337.53 and 40952.13. There were 6 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 1.30%, while Small cap index was down by 0.91%. (Provisional)

The lone gaining sectoral index on the BSE was Telecom up by 0.13%, while PSU down by 2.52%, Auto down by 1.82%, Utilities down by 1.32%, Power down by 1.24% and Realty down by 1.22% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.55%, Tata Steel up by 0.71%, Reliance Industries up by 0.27%, Asian Paints up by 0.06% and HDFC Bank up by 0.03%. (Provisional)

On the flip side, Yes Bank down by 10.79%, SBI down by 5.23%, Indusind Bank down by 3.21%, Mahindra & Mahindra down by 2.84% and Tata Motors down by 2.74% were the top losers. (Provisional)

Meanwhile, Federation of Indian Chambers of Commerce and Industry (FICCI) has expressed disappointment at the Reserve Bank of India’s (RBI’s) decision to keep interest rates unchanged and said there is a need for continued action on the policy rate front to boost growth. FICCI President Sandip Somany said ‘the RBI has left the repo rate unchanged. This is contrary to what FICCI was expecting given the weakening growth scenario in the economy. We note with concern that the transmission of the earlier policy rate cuts has not happened adequately, and are disappointed with the decision to not cut the repo rate as there is need for continued action on the policy rate front.’

He said a reversal in the declining economic growth trajectory is clearly the need of the hour and all steps should be taken to bring about this change. He added that a cut in the policy rate was also important for boosting the sentiment in the market and amongst investors, and FICCI was hoping for a bolder action on this front.

He also said ‘in fact, we feel that a further cut of 75 to 100 basis points in the repo rate is required in a short period of time to strengthen growth in the economy.’

The CNX Nifty ended at 11914.15, down by 104.25 points or 0.87% after trading in a range of 11888.85 and 12057.05. There were 9 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 5.26%, Kotak Mahindra Bank up by 1.63%, JSW Steel up by 0.74%, Tata Steel up by 0.54% and Dr. Reddys Lab up by 0.33%. (Provisional)

On the flip side, Yes Bank down by 10.55%, SBI down by 5.32%, Zee Entertainment down by 4.55%, GAIL India down by 3.38% and Indusind Bank down by 3.38% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 55.74 points or 0.78% to 7,193.59, France’s CAC rose 31.15 points or 0.54% to 5,832.70 and Germany’s DAX was up by 33.19 points or 0.25% to 13,087.99.

Asian markets ended higher on Friday, supported by continued hopes for a Sino-US ‘phase 1’ agreement before a closely watched date of December 15, when additional tariffs on Chinese exports to the US go into effect. Investors awaited the release of the US government’s monthly nonfarm payrolls report in the day ahead. Chinese shares closed up, with signs of economic recovery and hopes of a trade deal with the United States helping underpin investor sentiment. Japanese shares ended higher despite the yen benefiting from reviving safe-haven demand on the back of uncertainty over a potential phase 1 Sino-US trade deal. However, data released on Friday showed October household expenditure in Japan dropping 5.1% year-on-year in real terms, following a sales tax hike that took place in that month.