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EQUITY
Post Session: Quick Review
Dec-17-2018

Bringing up fifth-day of gains, Indian equity benchmarks finished Monday’s session on a firm footing, fuelled by strong buying across metal and oil and gas stocks, tracking positive cues from Asian peers. Key indices started the week with healthy gains as traders took comfort with commerce ministry’s latest data which showed that India’s exports grew by a meager 0.80% to $26.5 billion in November, even as the trade deficit widened to $16.67 billion. Exporters attributed the marginal export growth in November to high base effect, as the foreign shipments in the comparable month of the previous fiscal were quite high at $26.29 billion. Besides, imports rose by 4.31% to $43.17 billion during the month. Traders also took some encouragement with Finance Minister Arun Jaitley’s statement that the government will stick to the 3.3% fiscal deficit target in the current financial year. He also said India will clock a growth rate of 7-8% despite global uncertainties and will retain the tag of the world’s fastest-growing major economy. Also, markets received some support from strengthening of rupee against the dollar.

In the final hour of trading, key bourses added more gains and traded near intraday high levels, as sentiments on the street improved further with Care Ratings in its latest report stating that the investment climate in India has improved amid factors like improved gross fixed capital formation and higher government expenditure. It also highlighted rising government’s spending in the sectors like infrastructure, housing and defence. Domestic sentiments were also buoyed with deputy governor Viral Acharya’s statement that the Reserve Bank prefers fundamental changes to smoothen loan flow to micro-businesses through a public credit registry, rather than doling out forbearances. Traders took note of the Electronics and IT Minister Ravi Shankar Prasad’s statement that the Indian government will focus on manufacturing of medical electronics, defence electronics and scaling up the manufacturing capacity of automobile electronics, as part of its plan to grow Indian digital economy to $1trillion.

On the global front, Asian markets ended mostly in green on Monday, on hopes that the Federal Reserve would re-evaluate its hawkish stance at a meeting later this week, following signs of slower global growth. European markets were trading in red, amid escalating concerns of a sharp slowdown in global growth. Back home, the BSE Sensex ended at 36285.20, up by 322.27 points or 0.90% after trading in a range of 36123.62 and 36312.31. There were 22 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.39%, while Small cap index was up by 0.20%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 2.14%, Energy up by 1.66%, Oil & Gas up by 1.42%, Utilities up by 1.41% and Power up by 1.33%, while Realty down by 0.55%, IT down by 0.30%, Telecom down by 0.25%, Capital Goods down by 0.22% and TECK down by 0.19% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors - DVR up by 4.26%, Tata Motors up by 3.89%, Power Grid up by 3.85%, HDFC up by 2.99% and Coal India up by 2.21%. (Provisional)

On the flip side, Kotak Mahindra Bank down by 2.33%, Bharti Airtel down by 1.82%, Infosys down by 1.74%, Hero MotoCorp down by 0.88% and Asian Paints down by 0.40% were the top losers. (Provisional)

Meanwhile, expressing optimism over India’s fiscal position, Finance Minister Arun Jaitley has said that the government will stick to its fiscal deficit target in the current financial year (FY19) because when current account deficits are impacted by oil prices and strengthening dollar, the last thing that India can afford is to run itself into a twin deficit situation because a fallout of that is very serious. The government has budgeted to contain fiscal deficit at 3.3% of the Gross Domestic Product (GDP) in the current fiscal, lower than 3.5% in 2017-18. As per latest data, fiscal deficit in April-October period stood at 103.9% of budget estimates.

On the growth front, he said even though there are global uncertainties, India will clock a growth rate of 7-8% and will retain the tag of the world’s fastest growing major economy. He added ‘in course of the next few years, we intend to overtake the UK in terms of GDP and come close to Japan in terms of GDP not per capita income’. Since India is a major importer, Jaitley said oil prices have a direct impact on the country. He also said India has a particular resistance capacity to deal with rising crude oil prices and when it breaches the limit, it can impact inflation, currency and the current account deficit (CAD). The CAD, which is the difference between the inflow and outflow of foreign exchange, widened to 2.9% of GDP in the July-September quarter from 2.4% of GDP in April-June.

Noting down the challenges to the economy, the Finance Minister said there is a need to get out of the ‘syndrome of difficulties in credit’ and improve the liquidity situation in the market. The second challenge is ‘even when the election year debate goes on, many like you (industry) will have to flag to different players in the political system the importance of sound policy and how much they can be blended with good politics’. He said India cannot afford to have fragile coalitions for stable policy decisions and continue on the path of reforms. He said a coalition government would lead to a situation where the country probably will have a helpless Centre dependent on these kind of players.

The CNX Nifty ended at 10889.20, up by 83.75 points or 0.78% after trading in a range of 10844.85 and 10900.35. There were 36 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Power Grid up by 4.17%, Tata Motors up by 4.16%, HDFC up by 3.07%, Hindalco up by 2.45% and JSW Steel up by 2.42%. (Provisional)

On the flip side, Kotak Mahindra Bank down by 2.59%, Infosys down by 1.78%, Bharti Airtel down by 1.69%, Bajaj Finserv down by 1.54% and Indiabulls Housing Finance down by 1.37% were the top losers. (Provisional)

All European markets were trading in red; UK’s FTSE 100 decreased 28.14 points or 0.41% to 6,817.03, France’s CAC shed 26.14 points or 0.54% to 4,827.56 and Germany’s DAX was down by 20.08 points or 0.18% to 10,845.69.

Asian markets ended mostly in green on Monday, as investors picked up beaten-down shares after two weeks of losses, driven by concerns over trade and growth outlook. However, gains remained capped as traders remained on sidelines ahead of the US Federal Reserve's key policy meeting which is scheduled for December 18 and 19, with many expecting an increase in the benchmark interest rate by 25 bps to between 2.25 percent and 2.5 percent. Chinese shares ended slightly higher, as investors awaited cues from the closely watched annual Central Economic Work Conference later this week. Japanese shares ended notably higher despite lingering concerns over global growth.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

2,597.97
4.23
0.16

Hang Seng

26,087.98
-6.81
-0.03

Jakarta Composite

6,089.30
-80.54
-1.31

KLSE Composite

1,641.62

-20.34

-1.22

Nikkei 225

21,506.88
132.05
0.62

Straits Times

3,114.25
37.16
1.21

KOSPI Composite

2,071.09
1.71
0.08

Taiwan Weighted

9,787.53
13.37
0.14



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