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EQUITY
Post Session: Quick Review
Sep-20-2019

Indian equity benchmarks showcased an enthusiastic performance on Friday, by registering their biggest intraday gains in more than a decade, as Finance Minister Nirmala Sitharaman proposed to slash corporate tax for domestic companies & new domestic manufacturing companies. The current corporate tax rate is 30%, which has been brought down to 22%. For new manufacturing companies the existing tax rate is 25% which has been brought down to 15%. Markets started off with marginal gains, as traders took some support with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that there is room for rate cut as the growth has slowed down. The policy objective of the monetary policy is to maintain price stability, keeping in mind the objective of growth. Separately, Das expressed the hope that the ongoing crisis in Saudi Arabia that has spiked crude prices to multi-year highs will have limited impact on inflation and fiscal numbers.

After that, key indices witnessed sudden spike as investors cheered with Commerce minister Piyush Goyal’s statement that he hopes the tax relief measures announced by the government for the corporates will give the necessary fillip to growth that has been sputtering for long. Local sentiments also got buttressed with Reserve Bank governor Shaktikanta Das exuding confidence that second-quarter GDP numbers will be better than the previous one as the government has started spending again. Adding to the optimism, Union Home Minister Amit Shah said that the Modi government is committed in making India a big manufacturing hub and the slashing of corporate tax rates would make the country's markets much more exciting for potential investors.

On the global front, Asian equity ended mostly higher on Friday, while European markets were trading mostly in green amid optimism that the stimulus packages by central banks around the world will help bolster slowing economic growth. Back home, Auto stocks settled higher amid hopes the GST Council may consider reducing tariffs on automobile to revive sagging growth. 

The BSE Sensex ended at 37982.24, up by 1888.77 points or 5.23% after trading in a range of 36085.74 and 38378.02. There were 26 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 6.50%, while Small cap index was up by 3.96%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 9.86%, Bankex up by 8.07%, Capital Goods up by 7.98%, Consumer Discretionary Goods & Services up by 7.59% and Consumer Durables up by 7.32%, while IT down by 1.10% and TECK down by 0.49% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 12.28%, Maruti Suzuki up by 10.78%, Indusind Bank up by 10.68%, SBI up by 10.20% and Mahindra & Mahindra up by 9.81%. (Provisional)

On the flip side, Power Grid down by 2.63%, Infosys down by 1.91%, TCS down by 1.82%, NTPC down by 1.31% and Tech Mahindra down by 0.42% were the top losers. (Provisional)

Meanwhile, expressing concern over India’s economic growth, the Organisation for Economic Co-operation and Development (OECD) in its latest economic outlook, analysis, and forecasts has slashed the country’s gross domestic product (GDP) growth forecast by 1.3 percentage points to 5.9 per cent for 2019-20 from 7.2 per cent projected earlier. For the next year, the OECD has projected the Indian economy to grow 6.3 per cent, bringing down its earlier forecast by 1.1 percentage points.

The OECD cut India's growth for FY20 following the latest data, which showed that the country's economy expanded by just 5 per cent in the first quarter of 2019-20, the lowest in over six years. It said GDP growth in India has proved surprisingly weak in the recent quarters with consumer spending having slowed and tight financial conditions restraining investments. It added that lower interest rates and stronger benefits from reform efforts should all help private sector demand to strengthen.

India is among seven countries whose economic growth projections are cut by the OECD by more than 0.6 percentage points. The other countries are Argentina, Brazil, Saudi Arabia, South Africa and Australia. On the global front, the policy forum said the trade war between the US and China has sent global growth momentum tumbling toward lows last seen during the financial crisis. The OECD predicted that the global economy will see its weakest growth since the 2008-2009 financial crisis, slowing from 3.6 per cent last year to 2.9 per cent this year; it predicted 3 per cent growth for the next year.

The CNX Nifty ended at 11268.85, up by 564.05 points or 5.27% after trading in a range of 10691.00 and 11381.90. There were 42 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were Eicher Motors up by 13.79%, Hero MotoCorp up by 12.09%, Indusind Bank up by 10.92%, Ultratech Cement up by 10.47% and Maruti Suzuki up by 10.44%. (Provisional)

On the flip side, Zee Entertainment down by 3.04%, Power Grid down by 2.73%, Infosys down by 1.90%, TCS down by 1.90% and NTPC down by 1.15% were the top losers. (Provisional)

European markets were trading mostly in green; France’s CAC increased 13.99 points or 0.25% to 5,673.07 and Germany’s DAX rose 0.55 points or 0% to 12,458.25, while UK’s FTSE 100 decreased 0.15 points or 0% to 7,356.27.

Asian markets ended mostly higher on Friday amid optimism that the stimulus packages by central banks around the world will help bolster slowing economic growth. Meanwhile, the market’s focus shifted to the US-China trade war as investors digested news that the US and Chinese deputy trade negotiators resumed face-to-face talks for the first time in almost two months on Thursday. Japanese shares ended higher as investors digested data that showed Japan's core consumer inflation slowed to a new two-year low in August, rising 0.5% in August from a year earlier, and slowing from a 0.6% gain in July. The data raised expectations that the Bank of Japan will roll out additional easing measures to boost economic growth.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

3,006.45
7.17
0.24

Hang Seng

26,435.67
-33.28
-0.13

Jakarta Composite

6,231.47
-13.00
-0.21

KLSE Composite

1,597.41

1.13

0.07

Nikkei 225

22,079.09
34.64
0.16

Straits Times

3,159.68
0.88
0.03

KOSPI Composite

2,091.52
11.17
0.54

Taiwan Weighted

10,929.69
34.99
0.32

 

 
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