Benchmarks end marginally in red on Friday

Indian equity benchmarks ended the volatile day of trade marginally in red on Friday, as traders remained on sidelines ahead of the Index of Industrial Production (IIP) and Consumer Price Index (CPI) to be released next week. Markets started the session on pessimistic note, as traders remained concerned about Moody’s Investors Service’s statement that Indian economy will expand 7.4% in 2018, but the growth will slow down to 7.3% in the next year as domestic demand tapers on higher borrowing cost due to rising interest rates. It said the greatest downside risk to India's growth prospects stem from concerns about its financial sector. Market participants also remained cautious with a private report stating that unemployment rate in the country rose to 6.9% in October - the highest in two years. The estimated number of people employed during October 2018 was 397 million. This was 2.4% lower than the rate in October 2017. Meanwhile, the finance ministry said that GST refund of Rs 82,775 crore to exporters has been cleared as on October 31, which is 93.8% of the total such claims with the tax authorities. The ministry said Rs 5,400 crore worth GST refund is still pending with the government and that is being expeditiously processed.

However, markets pared all of their losses and turned green in noon deals, as traders took some support from Finance Minister Arun Jaitley’s statement that demonetisation helped in tackling black money and expanding the tax base. Sentiments also remained optimistic with a report stating that demonetisation was a fundamental corrective without which the Indian economy would have collapsed by now just like subprime crisis in the US. But, markets once again turned pessimistic and entered into red terrain to end marginally in red, as market participants turned cautious with a private report stating that slowdown in Non-Banking Financial Companies (NBFC) disbursements could have a negative impact on growth. It also said if this situation persists there will be a negative impact on growth because credit availability is going to be that much reduced for the aggregate economy.

Weak opening in European counters too dampened sentiments as they continued to chase global market sentiments. Besides, worries about a slowdown in China and concerns over Italy's budget deficit weighted on market sentiments. Asian markets ended in red terrain after the Federal Reserve left rates unchanged but signaled further gradual increases in rates despite signs of a slowdown in the pace of growth in business investment.

Back home, traders failed to take any sense of relief with another private report stating that Indian retail inflation likely slowed to its slowest pace in 12-months in October after food and fuel costs fell, keeping the official consumer prices gauge below the central bank's medium-term target for a third consecutive month. On sectoral front, infrastructure related stocks edged lower despite report that the Reserve Bank has liberalised the norms governing foreign borrowings for infrastructure creation in consultation with the Government. As per the notification, the minimum average maturity requirement for ECBs (external commercial borrowings) in the infrastructure space raised by eligible borrowers has been reduced to three years from earlier five years.

Finally, the BSE Sensex lost 79.13 points or 0.22% to 35,158.55, while the CNX Nifty was down by 13.20 points or 0.12% to 10,585.20.

The BSE Sensex touched a high and a low of 35,287.29 and 35,011.23, respectively and there were 17 stocks advancing against 14 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.66%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.08%, Consumer Durables up by 0.85%, Consumer Discretionary Goods & Services up by 0.85%, Auto up by 0.55% and Oil & Gas was up by 0.47%, while IT down by 1.19%, TECK down by 1.06%, Metal down by 1.00%, Telecom down by 0.58% and Energy down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 5.49%, Asian Paints up by 3.79%, Adani Ports & SEZ up by 3.49%, Sun Pharma up by 2.32% and Hero MotoCorp up by 2.04%. On the flip side, Bharti Airtel down by 2.45%, Infosys down by 2.15%, TCS down by 1.70%, Reliance Industries down by 1.55% and SBI down by 1.27% were the top losers.

Meanwhile, the Finance Ministry stated that total Goods and Services Tax (GST) refunds to the tune of Rs 82,775 crore to exporters has been cleared by the Central Board of Indirect Taxes and Customs (CBIC) and the state authorities out of the total refund claims of Rs 88,175 crore received so far. It noted that the disposal rate of GST refunds is 93.8 percent as on October-end this year. It also indicated that the pending GST refund claims amounting to Rs 5,400 crore are being expeditiously processed so as to give relief to eligible exporters.

Giving the refunds' break-up, the Ministry said that Rs 42,935 crore of IGST refunds have been disposed of as on October 31, which is 93.27 percent of the total such claims. It also indicated that as much as Rs 3,096 crore worth of IGST refund claims are held up on account of various deficiencies which have been communicated to exporters for remedial action. In the case of input tax credit claims, it noted that the total claims of Rs 42,145 crore, the pendency as on October 31 stood at Rs 2,305 crore.

It further said that there are concerns being raised about growing pendency of GST refunds and sought to assure the exporters that there is no let up in the sanction of GST refunds. It also said that refund claims without any deficiency are being cleared expeditiously. It also informed that efforts are being made continuously to clear all the pending refund claims, where ever requisite information is provided and found eligible.

The CNX Nifty traded in a range of 10,619.55 and 10,544.85. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 5.37%, HPCL up by 5.05%, Indiabulls Housing Finance up by 3.70%, Adani Ports & SEZ up by 3.68% and Asian Paints up by 3.52%. On the flip side, Bharti Airtel down by 2.89%, Infosys down by 2.49%, Hindalco down by 2.32%, Dr. Reddy’s Lab down by 2.16% and GAIL India down by 1.92% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 38.60 points or 0.54% to 7,102.08, France’s CAC shed 39.46 points or 0.77% to 5,091.99 and Germany’s DAX dipped 72.96 points or 0.64% to 11,454.36.

Asian markets ended lower on Friday after the Federal Reserve reiterated its hawkish stance and the populist government in Rome flatly dismissed the EU's more pessimistic outlook for the Italian economy, deepening a rift with the European Union. Chinese shares ended lower as policymakers struggle to dispel stock market gloom with promises of tax cuts and more bank lending. Consumer prices in China rose 2.5 percent year-on-year in October, the National Bureau of Statistics said in a report. That was in line with expectations and unchanged from the September reading. The bureau also said that producer prices climbed an annual 3.3 percent - matching forecasts and slowing from 3.6 percent in the previous month. Japanese shares ended lower as dismal inflation data from China as well as lingering concerns of slowing growth pulled down shares of companies that have large exposure to China.

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