Post Session: Quick Review

The Indian equity markets remained relatively calm on the usually choppy F&O series expiry day, after some initial hiccups, the major indices settled into a narrow range with no major movements taking place till the final hours’ of the day. However, amid the dull day of trade, the only bright point was the strength in the rupee, which at one point of time looked strengthening below 62 mark against dollar on the Reserve Bank of India’s (RBI) assurance that it would provide liquidity to the market and can also undertake open market operations if required. RBI relaxed the minimum maturity tenure for banks' foreign currency borrowings' to one year from three years, in order to use the central bank's swap facility which was set up to support the ailing rupee.

The global cues also weighed on the sentiments of the domestic market, as the US markets ended lower overnight, while the Asian markets too remained in somber mood with lingering concerns in US about the possibility of a government shutdown at the end of the month. Though, the markets were unable to get any respite with the positive start of the European markets, as they too remained in cautious mood with investors awaiting a report that may show US jobless claims rose last week. While, the US futures were indicating another cautious start of the US markets.

Back home, the trade gained pace in the final hours, as indicated by the rollover till previous session, the mood seemed bullish and the traders extending their bets to next series. Though, the final moment trade depicted the typical expiry moves and trade turned choppy with the benchmarks, which once looked to close firmly in green, suffered profit taking at higher levels, ended flat with a positive bias on the final day of the series. The mood were also dampened by the reversal of early gains in the European markets, while on the domestic front there was not much to support the markets. Meanwhile, the Raghuram Rajan panel report has made a case for ending the ‘special category’ criteria for providing additional assistance to poorer states  and has instead suggested a new methodology for devolving funds on states based on a ‘Multi Dimensional Index (MDI)’. Sectorwise, power witnessed good upmove followed by healthcare, capital goods and FMCG. While the consumer durables was the major laggard of the day after RBI banned zero percent interest rate scheme offered by the banks for purchase of consumer goods. On the same time the oil and gas sector too remained in somber mood led by Reliance Inds despite Oil Minister M Veerappa Moily saying his ministry has not moved the Cabinet for appointing a consultant to study the reasons for falling gas output at the KG-D6 block operated by Reliance.  On the F&O front, the September series was another good series for the markets, with major benchmarks gaining well over 8%. CNX Midcap and Smallcap too gained over 6% and 7% respectively, while sectorally Banks, FMCG, Metal and Auto gained near to 9-13% followed by pharma, media and energy, which gained anywhere between 5-6% for the series. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1186: 1129, while 145 scrips remained unchanged. (Provisional)

The BSE Sensex gained 31.53 points or 0.16% to settle at 19887.77.The index touched a high and a low of 19997.28 and 19826.99 respectively. Among the 30-share Sensex, 15 stocks gained, while 15 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.12% and 0.60% respectively. (Provisional)

On the BSE Sectoral front, Power up by 1.04%, Health Care up by 0.93%, Capital Goods up by 0.72%, FMCG up by 0.69% and Metal up by 0.61%, were the top gainers, while Consumer Durables down by 0.94%, Oil & Gas down by 0.93%, Realty down by 0.88%, IT down by 0.29% and Teck down by 0.28% were the top losers in the space. (Provisional)

The top gainers on the Sensex were BHEL up by 7.60%, Tata Steel up by 3.11%, Coal India up by 2.86%, Sun Pharma up by 2.44% and Tata Power up by 1.54%, while, Jindal Steel down by 3.29%, Gail India down by 1.70%, Hero MotoCorp down by 1.49%, Sesa Goa down by 1.27% and ONGC down by 0.88% were the only losers in the index. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) banned zero percent interest rate scheme offered by the banks for purchase of consumer goods, citing that such schemes is non-existent and only serve the purpose of alluring and exploiting the vulnerable customers. Under zero percent interest EMI schemes offered on credit card, the interest element is often camouflaged and passed on to the customer in the form of processing fee. As per the central bank regulations, banks should not resort to any practice that would distort the interest rate structure of a product as this violate the transparency in pricing mechanism which is very important for the customer to take informed decision.

The RBI notified that zero percent interest is non-existent and such schemes only misguided the vulnerable customers. Fair practice demands that the processing charge and interest charged should be kept uniform product or segment wise, irrespective of the sourcing channel, it added.

On the financial assistance to customers, the RBI said that the loan amount sanctioned for the purchase should be after taking into account the discount, rather than giving effect to the benefit by reducing the interest. The central bank’s notification also said that risk rating of the customers is the only factor that can justify differential rate of interest for the same product, which may not be applicable in case of retail products where the interest is generally kept flat and is indifferent to the customer risk profile.

India VIX, a gauge for markets short term expectation of volatility lost 6.54% at 24.00 from its previous close of 25.68 on Wednesday. (Provisional)

The CNX Nifty gained 5.75 points or 0.10% to settle at 5,879.60. The index touched high and low of 5,917.65 and 5,864.10 respectively. Out of the 50 stocks on the Nifty, 22 ended in the green, while 27 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were BHEL up 5.59%, Tata Steel up by 3.50%, JP Associate up by 3.35%, Coal India up by 2.85% and Sun Pharmaceuticals up by 2.28%. The key losers were Jindal Steel down by 3.27%, Ambuja Cements down by 2.59%, PNB down by 2.22%, Gail down by 1.94% and Reliance Infrastructure down by 1.62%. (Provisional)

The European markets were trading in red, France’s CAC 40 was down by 0.51%, Germany’s DAX down by 0.37% and the United Kingdom’s FTSE 100 down by 0.16%.

Most of the Asian markets concluded Thursday’s trade in red, as investors kept eye on controversial budget negotiations going in Washington. China’s Shanghai Composite fell as investors reduced exposure ahead of the long Golden Week holiday starting Tuesday. China’s recent economic data reinforce the International Monetary Fund’s forecast that the world’s second-largest economy will avoid a second-half slowdown and grow 7.75% this year. The IMF expected China’s economy to sustain its pace of growth despite a difficult international environment. The current level of consumer confidence in South Korea fell unexpectedly last month. The Bank of Korea stated that South Korean Consumer Confidence fell to 102, from 105 in the preceding month.

Industrial production in Taiwan rose unexpectedly last month. The Ministry of Economic Affairs Taiwan stated that Taiwanese Industrial Production rose to a seasonally adjusted annual rate of 2.07%, from -0.40% in the preceding month whose figure was revised down from 2.07% while industrial production in Singapore rose less-than-expected last month. The Statistics Singapore stated that Singaporean Industrial Production rose to an annual rate of 3.5%, from 3.0% in the preceding month whose figure was revised up from 2.7%.