Post Session: Quick Review

Indian equity benchmarks ended on a higher note on Wednesday. Indices made a cautious start, amid reports that workers in India are facing increased burnout due to lack of separation between work and personal life as well as concerns of contracting COVID-19. Close to one-third of workers in India cited increased rates of burnout over the past six months with the lack of separation between work duties and personal obligations as negatively impacting their well-being. Traders took note of report that the Reserve Bank of India (RBI) is widely expected to keep rates steady when its two-day monetary policy committee (MPC) meeting concludes on October 09. The RBI said it will hold the MPC meeting from October 7 to October 9, having delayed it by a week in order to give the government time to appoint three new external members to the panel.

But soon, equity benchmarks gained traction and remained higher for the almost whole trading day, taking support with report that companies garnered more than Rs 1 lakh crore from the capital markets in August, a surge of 64 percent from the preceding month, with private placement of debt instruments emerging as the most preferred route for financing business needs. The funds have been mopped-up mainly for business expansion plans, loan repayments and working capital requirements. Some support also came as Fitch Ratings’ report stated that IT services sector is likely to resume high single-digit revenue growth in 2021-2022 on the back of higher demand for digital transformation after a flattish 2020.

On the global front, European markets were trading mostly in red after mixed economic data. Asian markets ended mostly higher on Wednesday, after Fitch Ratings maintained sovereign ratings of South Korea citing strong external finances, steady macroeconomic performance and sufficient fiscal headroom going into the coronavirus pandemic. The sovereign ratings were maintained at 'AA-', with a stable 'outlook'. Although the pandemic has weighed on economic growth and public finances, domestic control of the virus accompanied by a robust policy response have limited the severity of the deterioration.

The BSE Sensex ended at 39878.95, up by 304.38 points or 0.77% after trading in a range of 39450.82 and 39968.04. There were 16 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.61%, while Small cap index was down by 0.40%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.74%, Energy up by 1.57%, Auto up by 1.37%, Consumer Disc up by 0.66% and IT up by 0.64%, while Metal down by 2.97%, Realty down by 1.60%, Power down by 1.41%, Utilities down by 1.27% and PSU down by 1.08% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Titan Co up by 4.44%, Bajaj Auto up by 3.55%, Maruti Suzuki up by 2.28%, Reliance Industries up by 2.13% and Ultratech Cement up by 1.79%. On the flip side, Bajaj Finance down by 4.12%, Power Grid down by 2.24%, Sun Pharma down by 1.76%, Tata Steel down by 1.74% and NTPC down by 1.60% were the top losers. (Provisional)

Meanwhile, in its 42nd meeting, the Goods and Services Tax (GST) Council has extended the levy of compensation cess beyond the transition period of five years for such period as may be required to meet the revenue gap. The Centre also decided to increase the shortfall amount to Rs 1.10 lakh crores from Rs 97,000 crores under the borrowing option.

Finance Minister Nirmala Sitharaman noted that 21 states have chosen borrowing option 1 for compensation of revenue shortfall due to GST implementation, adding that the Centre is not denying compensation to any state but those states which have not chosen to any borrowing option have to borrow from the market.

Besides, the present GSTR-1/3B return filing system will be extended till March 31, 2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system.

The CNX Nifty ended at 11738.85, up by 76.45 points or 0.66% after trading in a range of 11629.35 and 11763.05. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Titan Co up by 4.50%, Bajaj Auto up by 3.54%, Hero MotoCorp up by 3.10%, Maruti Suzuki up by 2.24% and Reliance Industries up by 2.13%. On the flip side, Bajaj Finance down by 4.12%, BPCL down by 2.78%, Tata Motors down by 2.59%, Hindalco down by 2.29% and Power Grid down by 2.21% were the top losers. (Provisional)

European markets were trading mostly in red, UK’s FTSE 100 decreased 8.83 points or 0.15% to 5,941.11, Germany’s DAX decreased 6.81 points or 0.05% to 12,899.21. On the flip side, France’s CAC was up by 1.31 points or 0.03% to 4,896.77.

Asian markets ended mostly higher on Wednesday, despite US President Donald Trump ending negotiations with Democrats over another Covid-19 stimulus package until the November 3 presidential election. Meanwhile, investors are waiting minutes from the US Federal Reserve’s September meeting for guidance as to how the central bank plans to push inflation higher and how long it might let it run above 2 percent before tightening its ultra-loose monetary policy. Though, Hong Kong’s private sector economy contracted at a slower pace in September than in August, the latest survey from IHS Markit showed on Wednesday with a PMI score of 47.7. Meanwhile, Chinese markets are closed for holidays until October 9.