Post Session: Quick Review

Indian equity benchmarks failed to continue a gaining rally on Thursday’s trading session, with both Sensex and Nifty ending in red terrain. Key indices made a negative start of the day, with the RBI’s statement that the GDP is likely to contract by 8.6 percent for the July-September period, which means India will enter into a recession for the first time in history in the first half of this fiscal with two successive quarters of negative growth due to the COVID-19 pandemic. The street paid no heed towards the report that the Union Cabinet has approved a Production-Linked Incentive (PLI) scheme for ten key sectors, including telecom, automobiles and pharmaceuticals, taking the total outlay for such incentives to nearly Rs 2 lakh crore over a five-year period.

Weak trade continued over the Dalal Street during the whole day, amid rating agency ICRA’s report that the aggregate debt of 12 major states is estimated to worsen significantly, and their capital spending might decline sharply because of lower-than-expected goods and services tax (GST) revenue and shortfall in Centre’s devolution. It added that this could lead to a 1-2 per cent contraction in Q4FY21. Sentiments were negative, even after the government said it has set up a 22-member inter-ministerial committee for strengthening India's capital goods sector through interventions that help it in contributing more actively towards achieving the target of a $5 trillion economy and a $1 trillion manufacturing sector. The committee will look into issues pertaining to the capital goods (CG) sector, including technology development, mother technology development, global value chains, testing, skill training, global standards, reciprocity issues and custom duties to make the sector globally competitive and to become the manufacturing hub for the world.

On the global front, European markets were trading lower. Asian markets ended mostly lower on Thursday, after Japan core machinery orders declined more than expected in September weighing on the prospects of a sustained recovery in business investment. Core machinery orders declined 4.4 percent on a monthly basis, in contrast to a 0.2 percent rise in August. This was the first fall in three months and worse than forecast of 0.7 percent drop. Year-on-year, core machinery orders were down 11.5 percent versus an expected fall of 11.6 percent.

The BSE Sensex ended at 43357.19, down by 236.48 points or 0.54% after trading in a range of 43127.55 and 43543.96. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.50%, while Small cap index was up by 1.20%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 1.39%, Capital Goods up by 1.33%, Industrials up by 1.11%, Realty up by 0.83% and Basic Materials up by 0.82%, while Bankex down by 2.05%, PSU down by 1.01%, Utilities down by 0.74%, Energy down by 0.73% and Oil & Gas down by 0.30% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 2.89%, ITC up by 1.43%, Larsen & Toubro up by 1.31%, Bajaj Finserv up by 1.06% and Tech Mahindra up by 0.81%. On the flip side, SBI down by 3.16%, Kotak Mahindra Bank down by 2.91%, Indusind Bank down by 2.41%, NTPC down by 2.31% and ICICI Bank down by 2.10% were the top losers. (Provisional)

Meanwhile, with an aim to make the capital goods sector globally competitive and to become the manufacturing hub for the world, the government has set up a 22-member inter-ministerial committee in strengthening the Capital Goods (CG) Sector through interventions that help the CG Sector in contributing more actively in the national goal of achieving a $5 trillion economy and a $1 trillion manufacturing sector.

The Committee will look into on all such issues pertaining to the Capital Goods Sector including technology development, mother technology development, global value chains, testing, skill training, global standards, reciprocity issues, custom duties to make this sector globally competitive and to become the manufacturing hub for the world. Any other relevant issue pertaining to the Capital Goods sector may also be brought before the Committee with the prior approval of the Chairman.

The Inter-Ministerial Committee (IMC) under the chairmanship of Secretary, DHI with representation at sufficiently senior level officers from the concerned Ministries/Departments is proposed to meet quarterly. Any other Department or expert as required may be invited by the chair.

The CNX Nifty ended at 12690.80, down by 58.35 points or 0.46% after trading in a range of 12624.85 and 12741.15. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Grasim Industries up by 2.97%, Hindustan Unilever up by 2.86%, Shree Cement up by 2.51%, Hindalco up by 2.23% and ITC up by 1.46%. On the flip side, SBI down by 3.16%, Coal India down by 2.98%, Kotak Mahindra Bank down by 2.94%, Indusind Bank down by 2.38% and NTPC down by 2.26% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 47.41 points or 0.74% to 6,334.69, France’s CAC decreased 39.07 points or 0.72% to 5,406.14 and Germany’s DAX was down by 99.05 points or 0.75% to 13,117.13.

Asian markets ended mostly lower on Thursday as continued surge in corona virus infections in the US and Europe fueled doubts about a quick recovery in the global economy. Chinese shares ended lower after the country’s new bank loans fell more than expected on tightened loan quotas. Data from the People’s Bank of China showed Lenders issued 689.8 billion yuan in new yuan loans last month down from 1.9 trillion yuan in September and well short of expectations for 800 billion yuan. Meanwhile, the United States slammed China for the recent disqualification of four Hong Kong opposition lawmakers and said that sanctions will continue to be imposed on those responsible for extinguishing Hong Kong’s freedom. Japanese share ended higher as investors switched back to technology stocks, while positive sentiments were capped by data showing Japan's core machinery orders fell for the first time in three months in September and at a faster-than-expected pace.