Post Session: Quick Review

Some buying interest towards the end of the trade led to a positive close of benchmarks equity indices for second consecutive session on Thursday. However, the benchmarks which remained in state of limbo for most part of the session, awaiting the crucial Infosys’ September quarter earnings tomorrow, which will also mark the official start of Q2 result season. Meanwhile, investors’ also walked on tight rope ahead of August IIP figures, which is expected to expand by 2%, largely driven by a pick-up in manufacturing and electricity. Chiefly, optimistic global set-up helped benchmarks stay afloat in absence of positive triggers at home front. The buying interest that was witnessed during the dying hours of the trade also turned out to be saving grace for Indian equity markets, which saw Sensex and Nifty, ending above the crucial 20,200 and 6,000 psychological levels respectively. Meanwhile, broader indices outperforming their larger peers, ended up with smart gains of over half a percent.

On the global front, Asian pacific shares, recovering their losses, ended mostly positive, while European shares were trading sanguine on signs of progress in Washington on ending the US fiscal stalemate and averting a possible debt default. Reports suggest of US Republicans considering a short-term hike in the government's borrowing authority to buy time for talks on broader policy issues.

Closer home, benchmarks after getting a weak start traded lackluster till the afternoon deals, where a reversal of trend took place with the positive start of European markets. Although, some profit-booking was witnessed but the recovery soon took over the bourses, which ended in green, signaling some kind of investors’ confidence in local equity markets ahead of the crucial day.  Meanwhile, recovery of Indian currency from day’s low point rescued benchmarks from a negative close. On the BSE sectoral front, Auto, Metal and Information Technology (IT) were the flavors of the session, witnessing maximum buying interest, while Banking, Oil & Gas and Fast Moving Consumer Goods were the major pockets of weakness. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1423: 1021, while 146 scrips remained unchanged. (Provisional)

The BSE Sensex gained 54.83 points or 0.27% to settle at 20304.09.The index touched a high and a low of 20323.77 and 20135.91 respectively. Among the 30-share Sensex, 14 stocks gained, while 16 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.57% and 0.70% respectively. (Provisional)

On the BSE Sectoral front, Auto up by 1.96%, IT up by 0.75%, Teck up by 0.52%, Health Care up by 0.41% and Metal up by 0.39% were the top gainers, while Consumer Durables down by 0.17%, Oil & Gas down by 0.09% and Bankex down by 0.06% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Tata Motors up by 5.54%, Mahindra & Mahindra up by 1.93%, NTPC up by 1.55%, SBI up by 1.47% and SSLT up by 1.46%, while, Hindalco Industries down by 2.38%, Tata Power down by 2.27%, Bajaj Auto down by 1.46%, Hindustan Unilever down by 1.45% and Coal India down by 0.99% were the only losers in the index. (Provisional)

Meanwhile, giving respite to Non-banking finance companies (NBFCs) waiting for banking licences, the Resserve Bank of India (RBI) Deputy Governor K C Chakrabarty said that NBFCs have advantage over other applicants for banking licences as they already have good customer base. Meanwhile, Chakrabarty added that a separate committee has been appointed to award licences and is considering various factors to choose appropriate applications for new banking licences.

The central bank has received 26 applications for new banking licence including NBFCs and various large corporates such as Tata Group, Reliance Capital and L&T Finance among others. Earlier, in February, the RBI issued final guidelines that would govern the new set of proposed banks. As per the guidelines, banks should have a minimum equity capital of around Rs 5 billion and not have foreign ownership of more than 49% for the first five years of operation. The rules also require that one out of every four branches opened by the new banks should be located in rural areas.

The government has planned to enhance the penetration level of Indian banking industry as it plays an important role in the economic development of the country and is the most dominant segment of the financial sector. Banks help channel savings to investments and encourage economic growth by allocating savings to investments that have potential to yield higher returns. The Indian banking industry’s contribution to GDP moves along with growth in the Indian economy.

India VIX, a gauge for markets short term expectation of marginally gained 0.03% at 25.88 from its previous close of 25.87 on Wednesday. (Provisional)

The CNX Nifty gained 21.60 points or 0.36% to settle at 6,029.05. The index touched high and low of 6,033.95 and 5,979.80 respectively. Out of the 50 stocks on the Nifty, 29 ended in the green, while 20 ended in the red and one stock remains unchanged.

The major gainers of the Nifty were Tata Motors up 5.55%, Ranbaxy up by 3.32%, NMDC up by 3.30%, Lupin up by 2.68% and Grasim up by 2.07%. The key losers were Tata Power down by 2.74%, Hindalco down by 2.38%, Kotak Bank down by 1.63%, Hindustan Unilever down by 1.48% and Bajaj Auto down by 1.47%. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 1.49%, Germany’s DAX up by 1.34% and the United Kingdom’s FTSE 100 up by 0.99%.

Most of the Asian markets concluded Thursday’s trade in green as investors remained hopeful that Washington will conclude the political wrangling and break the US fiscal impasse that has sapped market confidence. Taiwan Weighted remained closed on account of National Day. Bank Indonesia will regulate currency hedging by individuals and companies, including state-owned firms, to help stabilize Asia’s most-volatile currency. Consumer confidence in Shanghai strengthened more than expected in the third quarter of this year after the city rolled out big plans like the free trade zone project. The Consumer Sentiment Index jumped 6.5 points from a year earlier to 107.1 in the July-September period. The latest reading rose further from 103.2 in the second quarter, indicating growing optimism among local residents.

Household confidence in Japan rose more-than-expected last month. The Cabinet Office stated that Japanese Household Confidence rose to a seasonally adjusted annual rate of 45.4, from 43.0 in the preceding month. Japan’s Core Machinery Orders rose to 5.4%, from 0.0% in the preceding month. Japan’s tertiary industry activity index rose more-than-expected last month. METI reported that Japanese tertiary industry activity index rose to a seasonally adjusted 0.7%, from -0.4% in the preceding month. Industrial production in the Philippines rose unexpectedly last month.The National Statistics Office stated that Philippines Industrial Production rose to a seasonally adjusted annual rate of 18.3%, from 14.9% in the preceding month whose figure was revised up from 12.1%. Malaysian Industrial Production fell to a seasonally adjusted annual rate of 2.3%, from 7.6% in the preceding month.