Post Session: Quick Review

Indian equity benchmarks traded on volatile note throughout the day but witnessed buying by participants in last hour of trade which pushed the markets above neutral line and ended the session with splendid gains. Initially markets made a slight positive start, as traders took support from government’s report that demonetisation followed by digitalisation has succeeded in reducing incremental growth in currency in circulation by over Rs 3 lakh crore. The notes in circulation (NIC) as on November 4, 2016 were worth Rs 17,74,187 crore which have increased to Rs 22,35,648 crore as on December 2, 2019. Sentiments were also buoyed with Union Surface Transport Minister Nitin Gadkari’s statement that the government would spend a whopping Rs 5 trillion over the next two years in infrastructure projects to spur the economy and create thousands of jobs. However, traders pared some of their initial gains later in the trade as market participants turned anxious with Asian Development Bank’s (ADB) report as it lowered its forecast for India to 5.1% for 2019 from its September estimates of 6.5% as the foundering of a major nonbanking financial company in 2018 led to a rise in risk aversion in the financial sector and a credit crunch.

Though, buying got intensified during final hours of trade, as sentiments were buoyed with European Union’s statement that it was hopeful of forward movement in negotiations with India on the long-pending free trade agreement, and favoured opening separate talks for an investment protection treaty. EU-India partnership is going through momentous transformation and that there has been a clear commitment by both sides to expand ties in key areas. Sentiments got boost with Commerce Minister Piyush Goyal’s statement that the government has carried out a number of reforms in various sectors and it is a continuous process for improvement in the economy. He said some of the reforms were by way of amendments in various acts such as the Finance (Amendment) Bills, the Special Economic Zones (Amendment) Bill, amendments in the Goods and Services Tax Act and the Insolvency and Bankruptcy Code. Meanwhile, direct tax collections, net of refunds, for the April-November period grew just 1.6% against the required rate of 17.4% to achieve the budget estimate of Rs 13.35 lakh crore for the current fiscal.

On the global turf, European markets were trading mostly lower, after a poll showed British Prime Minister Boris Johnson is now likely to win only a modest majority in Thursday's vote, raising fresh uncertainty around the outcome of BREXIT. Asian markets ended mostly higher, with investors mood cautiously lifted by a report that US President Donald Trump might delay a weekend tariff hike on $160 billion in Chinese goods.

The BSE Sensex ended at 40451.71, up by 211.83 points or 0.53% after trading in a range of 40135.37 and 40466.13. There were 22 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.56%, while Small cap index was up by 0.01%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 1.66%, Realty up by 1.50%, Power up by 1.28%, Oil & Gas up by 1.11% and IT was up by 0.93%, while Telecom down by 1.01%, Capital Goods down by 0.56%, Basic Materials down by 0.22%, Consumer Durables down by 0.05% and Metal was down by 0.02% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 2.86%, ONGC up by 2.12%, Tata Motors up by 1.94%, Kotak Mahindra Bank up by 1.87% and Tech Mahindra was up by 1.82%.  (Provisional)

On the flip side, Yes Bank down by 14.34%, Hero MotoCorp down by 1.57%, Vedanta down by 1.35%, Bharti Airtel down by 1.30% and Larsen & Toubro was down by 0.79% were the top losers. (Provisional)

Meanwhile, global rating agency, Fitch Ratings in its latest report has said that India's non-banking financial companies (NBFCs) will go for offshore financing in 2020 as funding conditions within the local market will continue relatively tight for NBFCs overall, though some improvement since the failure of Infrastructure Leasing & Financial Services (IL&FS) in late 2018. However, it expects offshore access to be restricted to larger entities with stronger credit fundamentals.

According to the report, India's weaker macroeconomic backdrop is likely to add to the existing funding, growth and asset-quality strains weighing on the Indian NBFCs industry as a whole. It said the offshore route will allow better-placed NBFCs to further diversify funding sources after fairly volatile domestic liquidity conditions over the past year, enabling them to capture relative funding-cost benefits and exploit growth opportunities.

The ratings agency further said that pressure for consolidation is highly likely against this background. It noted that coupled with tighter industry regulation, this should be positive for market stability in the longer run, and is likely to benefit companies with more resilient fundamentals or those with strong strategic linkages with financially sound corporates. It added that such institutions should retain better access to financing in the domestic market despite broader sector pressures.

The CNX Nifty ended at 11913.20, up by 56.40 points or 0.48% after trading in a range of 11832.30 and 11923.20. There were 32 stocks advancing against 18 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 5.36%, Zee Entertainment up by 4.85%, NTPC up by 2.86%, Indian Oil Corp. up by 2.73% and ONGC was up by 2.24%. (Provisional)

On the flip side, Yes Bank down by 13.85%, Hero MotoCorp down by 1.85%, Vedanta down by 1.28%, Hindalco down by 1.26% and Bharti Airtel was down by 1.26% were the top losers. (Provisional)

European markets were trading mostly lower, UK’s FTSE 100 decreased 0.95 points or 0.01% to 7,212.81 and France’s CAC was down by 8.26 points or 0.14% to 5,839.77, while Germany’s DAX was up by 20.16 points or 0.15% to 13,090.88.

Asian markets ended mostly higher on Wednesday as investors kept an eye on key events this week, including the Federal Reserve meeting, the UK general election and the weekend's Sino-US trade tariff deadline. Market sentiment has improved further on rising speculation that the America would delay implementing new tariffs at the 15 December deadline this week. Chinese shares ended higher as new loan growth data for November topped forecasts. China's bank lending increased more than expected in November, data from the People's Bank of China showed. Banks extended CNY 1.39 trillion new loans in November versus CNY 661 billion in October. Lending was forecast to rise to CNY 1.2 trillion. Further, Seoul shares ended higher after the release of labor market data. South Korea's jobless rate rose to a seasonally adjusted 3.6 percent in November from 3.5 percent in October, a government report showed. The rate was forecast to remain unchanged at 3.5 percent. In the same period last year, the rate was 3.8 percent.